Death of Clean Car Discount ‘a shame’
Volkswagen NZ confirms a significant drop in EV imports for 2024 amid government changes, Matthew Hansen reports.
Volkswagen New Zealand general manager Chanelle McDonald says it is “a shame” that the Clean Car Discount scheme was axed at the end of 2023, adding that the change has already prompted the German brand to heavily revise the number of EVs it imported.
One of the National Government’s first moves on taking office late last year was to drop the discount feebate scheme, which paid out subsidies on plug-in vehicles whiles penalising high-emitting vehicles, like utes.
The decision to drop the scheme triggered a wave of electric vehicle sales before the scheme’s disappearance on January 1, 2024, with various carmakers drafting significant discounts on electric models in order to deal with elevated stock levels. As expected, EV sales plummeted in January across the board.
Having only launched its new fully electric ID.4 and ID.5 SUVs to the market months before the decision, Volkswagen rolled out a comprehensive discount programme in order to sell inventory that it had hoped would continue to be rebateeligible in the new year.
“It’s a shame,’’ McDonald says. “We had a really clear mission where we as manufacturers wanted to go hard with electrification here in New Zealand, and it definitely feels that has stalled a wee bit with this recent decision to remove the rebate. I think it’s a shame for New Zealand to not be pushing that clean, green [messaging].”
Speaking to media at the launch of the updated Volkswagen Touareg (now available with a plug-in hybrid powertrain), McDonald confirmed that the brand stopped ordering new ID.4s and ID.5s for New Zealand when National won the election, in preparation for the party’s pre-election pledge to bench the discount.
The decorated German marque did sell a handsome number of electric vehicles in the final months of 2023, thanks in part to its ‘Electric Trade In’ initiative – granting customers an additional $7000 discount on any rebate-eligible ID.4 or ID.5 with the trade-in of any old electrical appliance. Those with a faulty toaster, old mobile phone or similar could effectively double their rebate.
The discount resulted in a brief fourfold sales lift, but that momentum ended quickly. McDonald now concedes that the brand has slashed its expectations for EV sales for this year. Having forecast that 30% of its sales in New Zealand in 2023 would be EVs, that figure has been dropped to a mere 10% for 2024.
The Volkswagen GM expects that the current electric vehicle sales funk, created by the surge of customers in December, will likely last until the end of the first quarter. By April, she predicts that EV registrations will have started to land on a more representative figure.
Like some other brands, Volkswagen’s losses on EV sales because of the lack of a rebate are likely to be balanced out by growth in sales of models previously pinged by the discount’s ‘feebate’ system.
“I feel that with the CCD [...] that it falsified the market in a way, from both angles,” said McDonald. “You had stronger uptake on electric but you also had an impact on ICE [internal combustion engine] vehicles.
“With it being removed we will probably see a lot more normalised and stable market, and uptake on electric vehicles at a rate that is a standard kind of rate.”
McDonald noted that Volkswagen sold more of its 7-seater Tiguan AllSpace SUV in January alone than in the previous six months combined, with customers lured by the lack of a fee. Sales of the Amarok ute also lifted significantly last month.
Following on from the Touareg R PHEV, Volkswagen’s next plug-in model destined for New Zealand launch is the ID.3 hatchback, which is slated to arrive in Q4, alongside the updated Tiguan SUV and Golf hatchback. Having previously stated that the flagship ID.4 GTX and ID.5 GTX would arrive in 2024, Volkswagen confirmed it will land in 2025 instead.