Different taxes for different cars
Electric cars used to be exempt from road user charges paid by drivers of diesel vehicles, but the government has announced it will soon require owners of plug-in electric vehicles to pay a tax on every kilometre.
Owners of petrol vehicles pay tax in a different way, on every litre of fuel they use, and this category includes petrol-electric hybrids that do not plug in (which are classed as very efficient petrol cars).
The goal is getting EV owners to help pay for maintenance of the roads they use.
But the way the change was done has some car owners fuming.
Last month, climate consultant Christina Hood ran the numbers on two similar new vehicles – one fully plug-in electric, and one petrol (an efficient, plugless petrol hybrid). She found the owner of the electric version would pay twice as much in taxes to drive the same distance as the petrol car.
Owners of some older hybrids have their own issue: they do plug in, but have very little battery range, meaning they may use a lot of petrol.
Plug-in hybrids pay both Road User Charges, and fuel tax on their petrol.
Although their road user charges are lower than the rate for pure EVs, if they use a lot of petrol, it could be costly overall.
Some of these owners want to try to modify their vehicles.
Kevin Parker believes his 2013 plug-in hybrid Mitsubishi Outlander has halved in value since the road user charges announcement. He lives rurally.
“A lot of my journeys are fairly long so, for every kilometre past the end of my road, pretty much I’m going to be paying for road tax twice.”
He had planned to drive his car until it died, but said the vehicle now made “no economic sense”.
He decided to remove the plug, which he thought might cost around $1000, and get the car re-certified as a plugless hybrid petrol vehicle.
After looking up the process, he went to a vehicle certifier, but was told he could not do it.
He is not the only one to try.
Ken McAdam of the Low Volume Vehicle Technical Association, which represents vehicle certifiers, said as soon as the road user change was announced, his organisation started getting enquiries about converting plug-in vehicles to non plug-in.
The enquiries came from both vehicle certifiers and car owners, he said.
That kind of job would normally fall outside the association’s role, and McAdam said he was awaiting clarification from Waka Kotahi on how to deal with it.
Waka Kotahi told RNZ (via the Ministry of Transport) it likely would not be in a position to advise on its position regarding recertification until an amendment to the Road User Charges Act was passed, sometime before 1 April, which will officially define a plug-in hybrid for the purpose of road user charges. Currently Waka Kotahi’s website says that the requirement to pay road user charges from 1 April “includes plug-in hybrid vehicles (PHEVs). It does not include hybrid vehicles that can’t plug in to recharge.”
Kathryn Trounson of EV lobby group Better NZ Trust said the fact people like Parker were trying to remove the plugs was an indictment of the way the government brought in the changes.
“I think the number the government has put on it feels more like a finger in the wind than anything that’s been worked out sensibly, and for 15km of range you can understand the gentleman in his Mitsubishi.”
Trounson does not dispute the need for change: she said with 100,000 EVs in the country, it was always expected they would have to start paying road user charges.
But in the current design she fears it will turn people to petrol, with the change landing soon after scrapping Clean Car Discounts for EVs.
“We are trying very hard to clean up our atmosphere… all those things are not going to work if people look at RUCs and no clean car discount and think, well I may as well buy an efficient petrol car. Those cars may be in the fleet for 15 years.”
The disparity could disappear if petrol cars were switched from fuel tax to road user charges.
Transport Minister Simeon Brown has said he will do this, but not when.