New and used vehicles could become more affordable for Kiwis through changes that will lower importing fees and help keep additional costs from being passed on to consumers, Transport Minister Chris Bishop announced today.
"Kiwis from all walks of life buy cars for all sorts of reasons - whether buying an affordable first car, upgrading to a bigger car for their growing family, or investing in a vehicle for their small business.
"At a time when Kiwis are still feeling the pinch, the last thing they need is the cost of cars going up by hundreds, or even thousands, of dollars - but unless the Government acts urgently to fix the Clean Car Standard, that's exactly what could happen," Mr Bishop says.
"The Clean Vehicle Standard was introduced in early 2023, with the aim of encouraging New Zealanders to buy more efficient cars and reduce emissions. It sets annual CO₂ targets for vehicle importers, who must balance higher-emitting models with enough low-emission vehicles to meet their overall target. If they fall short, they face charges; if they exceed it, they earn credits.
"The Standard has helped lift fuel efficiency, but market conditions have changed. There is a supply shortage of cleaner used vehicles, and demand for new EVs has dropped.
"Most importers are now unable to meet the passenger-vehicle targets. In fact, right now, 86 per cent of importers are facing a net charge rather than net savings from credits. The scheme is so out-of-whack with reality that even some hybrid vehicles will attract charges rather than credits.
"Without relief, the local automobile industry face significant charges that are likely to be passed on to consumers through higher car prices and reduced choice.
"To prevent hardworking Kiwis facing steep price increases, the Government is making critical changes to ease pressure on importers and keep cars affordable for New Zealand families and businesses."
The Government is:
- Temporarily slashing charges by nearly 80 per cent - from a top rate of $67.50 to $15 per gram of CO₂ for new vehicles, and from a top rate of $33.75 to $7.50 for used vehicles, for 2026 and 2027.
- Protecting credits - ensuring none expire before 31 December 2028.
- Launching a full review - with recommendations to Cabinet by June 2026.
"These changes will mean that the charges some of our most popular imports face will be significantly reduced. Depending on how much of the charge the importer can offset and how they price their vehicles, Kiwis could avoid thousands on the price of their vehicle."
"In total, it is estimated that the changes will avoid $264 million in net charges that could have been passed onto consumers through higher vehicle prices.
"Clearly, the Clean Vehicle Standard isn't working in its current form. These practical steps will keep pressure off car buyers while the wider Standard is reviewed. They make it more affordable for importers to meet emissions targets in the meantime - and, most importantly, they ensure Kiwis aren't hit with higher prices when they head to the dealership."
The amendment to the Clean Vehicle Standard will be made via an amendment paper to the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) which has just been reported back from Select Committee. The change is expected to pass this week and come into effect 1 January 2026.
