Clean Car Discount to keep driving down emissions

  • The Clean Car programme will reduce 50 percent more emissions than originally estimated by 2035, and 230 percent more by 2025
  • Forecast to save New Zealand from importing 1.4 billion litres of petrol. At current prices the economy will save an average of $325 million a year on fuel
  • Adjustments to scheme to maintain momentum, including:
    • Narrowing focus to more fuel efficient vehicles earlier than planned
    • Reductions in rebates and increases in fees paid by higher emitting vehicles
    • Rebates for zero emission used import vehicles will increase from $3,450 to $3,507
    • Adjustment in eligible vehicles to promote EV uptake
    • Special rebate for new and used low emission disability vehicles introduced
  • Crown to increase the Clean Car Discount’s repayable Crown grant by $100 million in Budget 2023.

The Government is making targeted changes to ensure its highly successful Clean Car Discount policy will keep driving down emissions, says Transport Minister Michael Wood.

“With over 100,000 rebates granted since the scheme came into effect in 2021, we currently have one of the fastest uptakes of EVs in the world.

“The scheme is successfully exceeding industry and government projections, with 20 percent of all new passenger car sales being electric in 2022. A substantial increase from eight percent in 2021.

“The scheme is facilitating an increase in the number of EVs entering the fleet we did not expect until 2027. As planned we are further targeting the scheme to maintain its success, and ensure it will be self-funding until its next review.

“We are targeting rebates for new and used imports emitting less than 100 grams of CO2 per kilometre compared to 146 grams under the original scheme. This will include battery electric vehicles, and plug-in hybrids.

“The rebate for used EV imports will also increase, meaning New Zealanders will save up to $3,507 per vehicle, helping many low and middle income New Zealanders get into lower emitting vehicles they otherwise couldn’t afford.

“The scheme is forecast to save New Zealand from importing 1.4 billion litres of petrol. At current prices the economy will save an average of $325 million a year less on fuel, out to 2035.   

“Our transition away from fossil fuels to New Zealand generated renewable energy is crucial to tackling the cost-of-living crisis long-term. Switching to an EV is like buying petrol for 40c/litre, which can make a big difference to household budgets.

“To fund the changes to make it easier for New Zealanders to purchase cleaner imports, we’re adjusting charges on high emissions vehicles. This includes vehicles like utes which are amongst the highest emitting vehicles within our fleet.

“The threshold vehicles will be subject to charges will reduce from 192 grams of CO2 per kilometre to 150 grams, and charges will increase. New and used imports that meet or exceed the threshold will attract charges.

“The scheme is also now forecast to reduce emissions by 3.4 million tonnes by 2035.  That’s an additional 50 percent out to 2035 over and above what was forecast when it started. It will deliver twice the emissions reduction forecast between the start of the scheme and 2025.

“The Clean Car Discount is doing what we set out to achieve, which is reduce transport emissions and provide transport options to New Zealanders that will lower household costs is the long term,” Michael Wood said.


More information about changes to the Clean Car Discount, including an updated rebate/charge pricing calculator, is available on the Ministry of Transport website.

Emissions from our light vehicle fleet are the single largest source of transport emissions in New Zealand, thanks in part to us having some of the most fuel inefficient and emissions intensive vehicles in the OECD.

The average CO2 emissions ratings of imported light vehicles in 2022, both new and used, have decreased by 14.4 percent when compared to the 12-month period before the Clean Car Discount was implemented – seven times faster than the 1.9 percent average annual decrease of the five years prior to the Clean Car Discount.