{"id":453465,"date":"2026-05-31T02:13:08","date_gmt":"2026-05-31T02:13:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/453465\/"},"modified":"2026-05-31T02:13:08","modified_gmt":"2026-05-31T02:13:08","slug":"the-tiny-tax-change-that-could-drive-major-electric-vehicle-uptake","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/453465\/","title":{"rendered":"The tiny tax change that could drive major electric vehicle uptake"},"content":{"rendered":"

Tax changes in this year’s Budget<\/a> will lead to more affordable second-hand electric vehicles for ordinary buyers, an electric vehicle advocacy group says.<\/p>\n

By Kate Newton of RNZ<\/a><\/p>\n

The government has changed the fringe-benefit tax rates for motor vehicles, with EVs and hybrids to attract lower rates than petrol and diesel engines from next April.<\/p>\n

Drive Electric says that will encourage businesses to purchase EVs over other vehicles, meaning more second-hand EVs will flow into the market, as fleets are turned over.<\/p>\n

Instead of the existing rate of 20% across all types of vehicles, petrol and diesel cars will attract fringe benefit tax of 22.8%, while electric vehicles will now pay a lower rate of 17%. Hybrids will pay 19.6%.<\/p>\n

Drive Electric chair Kirsten Corson said her organisation was “super excited” by the change.<\/p>\n

“It’s an important and significant demand-side policy.”<\/p>\n

A $60,000 EV attracting full fringe-benefit tax would now pay $1800 less a year than it previously had, while an equivalent petrol or diesel car would pay $1680 more.<\/p>\n

“That’s significant, when you look at it from a total cost-of-business perspective, which is how fleet [managers] look at it,” Corson said.<\/p>\n

Businesses purchased 60-70% of new cars in New Zealand every year, so it would have an immediate effect on the number of electric vehicles in New Zealand, she said.<\/p>\n

More than that, though, the 3-5-year turnover of most business vehicles would improve the availability and affordability of EVs for private buyers.<\/p>\n

“The thing that oftens gets [heard] is average Kiwis saying, ‘We’d love to get an EV, but we can’t afford one’,” Corson said.<\/p>\n

“We do expect to see a lot more EVs flowing into the business fleets, which is what we need to create that second and third-hand market to make EVs affordable for everyone.”<\/p>\n

A perceived loophole in fringe-benefit tax rules – which led many to believe utes were automatically exempt – had already been clarified by Inland Revenue last year, she said.<\/p>\n

Together with a simplified system for working out what proportion of a vehicle’s cost was subject to the tax, that had removed any incentive for petrol and diesel vehicles over electric and hybrid, she said.<\/p>\n

Transport contributes about 18% of New Zealand’s total greenhouse gas emissions.<\/p>\n

Drive Electric was now pushing political parties to adopt a scheme similar to one in Australia, where employees could use their pre-tax income to lease an EV through a salary sacrifice, which would also be exempt from fringe-benefit tax.<\/p>\n

“That would make a really big difference for middle and lower-income New Zealanders to get the opportunity to drive EVs.”<\/p>\n","protected":false},"excerpt":{"rendered":"Tax changes in this year’s Budget will lead to more affordable second-hand electric vehicles for ordinary buyers, an…\n","protected":false},"author":2,"featured_media":453466,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[44640,138,390,111,139,69,112],"class_list":["post-453465","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-budget-2026","tag-business","tag-climate-change","tag-new-zealand","tag-newzealand","tag-nz","tag-transport"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/453465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=453465"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/453465\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/453466"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=453465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=453465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=453465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}