New car sales recover strongly, thanks to the subsidy

Business / analysis

2021 ends with more than 30% of all new passenger cars sold being either battery-powered or hybrids. The subsidy drives the extra demand, but hasn't yet affected the volume of new ICE vehicles being sold

6th Jan 22, 10:18am by David Chaston

By just about any measure, 2021 was a record year for new car sales. These records are a key factor in the country's growing current account deficit.

The 2021 records include 112,140 new passenger vehicles, of which 82,809 were SUVs. There were also 121,883 used imports registered although this is not a record. (There were 166,000 used imports sold in 2017.) But new commercials - primarily but not only double-cab utes - registered another 54,389 vehicles and also a record.

New vehicles sold with some form of electrification grew strongly in 2021 with 6,899 battery-only electrics (BEVs), 2,461 plug-in hybrids (PHEVs) and 13,794 hybrid vehicles registered for the year and totaling 23,154 or just over 20%, compared to 1,554 BEVs, 756 PHEVs and 8,667 hybrids in 2020, or 13.5%.

In December alone, there were 1,133 light vehicle and 10 heavy vehicle full battery electric vehicles registered. The top selling models were the Tesla Model 3 (619 units) followed by the Hyundai Kona (138 units) and the Hyundai Ioniq 5 (70 units).

Hybrids continued their consistent strength with 1,235 vehicles registered in the month of December. Between both the EVs and hybrids, 31% of December passenger cars sold new were electrified.

Many of these are SUVs too.

Despite all this push of electrification, sales of cars with standard internal combustion engines (ICE) in 2021 totaled 99,963 new passenger cars, up from just 69,883 ICE cars in 2020, and almost exactly the same (99,581) as in 2019 for ICE cars.

The added 2021 new car sales momentum came from the NZ Government subsidy, a gift to the car selling industry.

New vehicles sold

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Source: NZTA

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70 Comments

by Squishy | 6th Jan 22, 10:33am 1641418399

Is it a subsidy? I thought it was structured to be tax neutral.

by realterms | 6th Jan 22, 10:50am 1641419427

I think the penalty side is still to be phased in? So I guess a subsidy during the transition and tax neutral eventually.

by tothepoint | 7th Jan 22, 7:08am 1641492485

With electrified cars selling at their current rate, the case for a government subsidy is weak.

But there's a strong case for government support for low income families - especially to address child poverty.

TTP

by HW2 | 7th Jan 22, 9:23am 1641500597

Keep with the car sales theme old chap... muchos gracias/whakawhetai koe

by iwantit2 | 6th Jan 22, 10:44am 1641419057

Government Subsidy? I thought the car manufacturers overseas heard about this and jacked up the cost of the cars at their end so consumers are actually not getting it any cheaper than before?

by realterms | 6th Jan 22, 10:49am 1641419396

Not car manufacturers. Maybe some second hand dealers/importers.

by Rex Pat | 6th Jan 22, 1:06pm 1641427619

Tesla didn’t increase its price. 4,400 Model 3s (California Corolla) registered in NZ since August 2019, of which half have been registered since the rebate came in force, in July this year.

by Officebound | 7th Jan 22, 7:47am 1641494841

Nope,

Tesla dropped their price a fair chunk, Toyota's up $1k in the last year, well less than inflation.

by Zack Brando | 6th Jan 22, 2:51pm 1641433885

lol - lots of properties have shared driveways and no off-street-parking..

Good luck running an extension cord to the street? The thousands required to replace batteries? Though if they're giving them away..

by Uninterested | 6th Jan 22, 2:24pm 1641432292

Or from what is common around where I live, shared driveways and a really small parking space. (Even smaller garage but that is being used for storage etc). So a really tiny EV would fit but anything larger like a model 3, nope.

However not all is lost. In all these places you can still own an electric bike, scooter, mobility scooter etc and charge them indoors.

by mfd | 6th Jan 22, 2:32pm 1641432726

If we really want to use subsidies to reduce transport emissions, rather than just lowering the carbon budget in the cap and trade scheme and letting it happen naturally, surely we'd get much better bang for our buck subsidising electric bikes? An electric car may be an improvement over an ICE, but moving from a 2 car household to 1 car + 1 e-bike, or from a 1 car household to 1 e-bike is an enormous win.

by Pragmatist | 6th Jan 22, 9:25pm 1641457520

Leaving home in the dark and returning in the dark in the middle of winter on an ebike isn't going to fly for most. Sure, if you live within 10mins of work it might be okay, but an hour each way in the rain and dark. In summer it might be fun, but in winter a heater, a roof and a stereo are going to win.

by Brock Landers | 6th Jan 22, 9:35pm 1641458134

I used to ride my bike in London in the dark and cold just fine.

Bike lights and appropriate clothing are all you need.

by Pragmatist | 6th Jan 22, 11:45pm 1641465938

And look how you turned out. No thanks

by tomjones_04 | 7th Jan 22, 8:34am 1641497673

How old are you? 5 ??

by HW2 | 7th Jan 22, 9:27am 1641500853

That is narcissistic ad hominem by you Tom thumb. What has happened to your good banter?

by tomjones_04 | 7th Jan 22, 9:46am 1641501965

Imagine what the EV revolution is going to do to the value of second hand petrol cars (eventually). Wether it be a stonking V12 or a creamy straight 6, there is no stronger emotive driver than nostalgia. The WRX STI… I remember driving my mates one with the biggest smile on my face. we attach so many memories to cars.. I just can’t get excited about a Tesla

by Pragmatist | 7th Jan 22, 9:38am 1641501500

Nah, just sick of BL and his whinging.

But back to the point, if he and mfd think the average punter are going to cycle to work in the middle of winter they are just plain delusional.

by mfd | 7th Jan 22, 12:56pm 1641513406

Perhaps, but this is the kind of thing we have to do to actually make a dent in our emissions. Things will have to change, and that might mean we have to be outside in the dark sometimes without a protective metal box around us.

I do appreciate it's not for everyone - some will live too far away, have to carry tools or other equipment for their work, or be physically unable to bike even with electric support. However, here in Christchurch I expect the majority of car trips could be replaced by bike/e-bike trips. There may be a little discomfort involved, but huge money savings, regular exercise, less hassle with parking and vehicle maintenance, and in Chch in many cases a bike is the faster option. For me, driving to work and walking from the nearest available parking would take twice as long as my bike commute.

by Pragmatist | 7th Jan 22, 1:34pm 1641515676

Could, but won't. Public transport will be far more popular than e-bikes if implemented properly.

by mfd | 7th Jan 22, 1:47pm 1641516451

I can live with that as a next best option. Money would be better allocated to subsidising public transport than subsidising new electric cars.

by Pragmatist | 7th Jan 22, 2:44pm 1641519887

If you can get somebody in charge of implementing public transport that has vision, ambition and the ability to actually deliver you'd be right. Meanwhile, how's that Auckland light rail going...

by Carlos67 | 7th Jan 22, 4:30pm 1641526221

Cycling to work is just a romantic dream in peoples heads, I tried it some 20 years ago now and it was borderline suicide on an almost daily basis. Not only would you need dedicated cycle lanes you would need them to be totally separate from the road by a concrete barrier to stop the idiots. I think something like this already exists down the northwestern motorway in Auckland but it would have to be taken to a whole other level to get people on bikes, possibly even totally covered and forced airflow to assist, now that would be wicked doing 50Km/hr into work.

by mfd | 7th Jan 22, 4:39pm 1641526777

Probably very location dependent - 2/3 of my department in Christchurch cycles to work regularly and incidents are very rare. I can think of two minor scrapes with a vehicle between the dozen of us in the last decade - we have far more injuries from indoor sport teams. Of course you have to be very aware of your surroundings, but I have seen research suggesting cycling to work is a net positive in terms of life expectancy as the exercise outweighs the tiny risk. It's a big news story when a cyclist dies, because it is extremely rare.

by grum | 9th Jan 22, 11:16am 1641680193

Yep. The only thing more dangerous to your health than biking to work is ... not biking to work.

I found when I committed to bike commuting 35k round trip *every* day, initially I had quite a few "interactions" but as my awareness increased and my attitude improved they gradually died away and it became more like a dance with the other commuters, give and take, pick your moments, etc. Also sometimes it was other cyclists who were the biggest idiots.

by Sendatsu | 9th Jan 22, 11:30am 1641681033

100% agree with you. I got myself an electric scooter October 2020, by about march 2021 I'd done 2,500km on it to and from work. About 12km each way.

To be fair, it took around about the same length of time to scooter as it did to drive. But that all went out the door pretty quickly in winter, they just aren't practical in the wet and cold.

Now if public transport was actually a viable solution in Christchurch, yeah I'd consider it again. Scooter/bike on the good days and bus on the bad ones... But unfortunately our public transport has been going downhill for years. Also just try taking a scooter on the bus... I've had drivers try and turn me away because the batteries are fire hazard and other such nonsense.

by mfd | 6th Jan 22, 9:53pm 1641459190

My bike seems to work fine in the dark, and even in the rain. Spent a few hundred dollars on decent waterproof gear a few years ago - there's no need to be cold or wet on your bike.

by GV 27 | 6th Jan 22, 2:56pm 1641434167

Do you have a petrol station in your house? And let me know when an LFP Model 3 needs a battery replaced due to ordinary wear and tear. I won't be waiting up, just fyi.

by Cur8or | 6th Jan 22, 3:06pm 1641434798

Elon has hinted that it should last a million miles. 1.6 million kilometers. About 30 years?

by GV 27 | 6th Jan 22, 4:08pm 1641438535

Elon's batteries might last, but I doubt those early production paint jobs are going to play nice with salted American winter roads for 30 years without problems. They should be fine here though, provided people don't do stupid shit like driving along Tamaki Drive or the Maraetai Waterfront when it's in flood.

by Carlos67 | 7th Jan 22, 4:22pm 1641525723

Yeah sure, just like that brick wasn't going to go through that window of the Cyber truck that Elton chucked it at.

by Carlos67 | 6th Jan 22, 4:21pm 1641439286

Yeah I'm going to take a pass on electric for my next car. Going to get what will be probably be the last Subaru STi ever made with a 6 speed manual. Electric is a yawn fest, I want some noise and something that requires drivers input.

by GraemeRansom4234 | 6th Jan 22, 4:41pm 1641440479

Have you driven a significant distance in an EV? I have an EV and a V12 Toyota. I enjoy both.

by realterms | 6th Jan 22, 6:01pm 1641445271

Manual does seem to be dying slowly, sadly. (I've spent a lot of time searching them out.) But if you think electric is a "yawn fest", I know you've never driven a good one.

by frazz | 6th Jan 22, 4:52pm 1641441148

Only ever owned 1 Subuaru..thirsty machine. But if you need the feel cool factor or money pit be my guest.

by Uninterested | 6th Jan 22, 8:00pm 1641452404

Or the safety. Ever driven when its pouring down at night? Or in the snow? A Subaru is a very safe stable car to be driving. But everyone has their own opinions. I'm firmly on the Subaru WRX side of the equation myself.

by General Comment | 7th Jan 22, 7:50am 1641495057

Audi's Quattro and Nissan's various ATTESA versions have worked fine for me over the years too. Multi-motor EVs can take this to the next level though, with near-infinite individual control of each wheel depending on grip levels. The future for AWD/4WD is quite exciting.

by tothepoint | 7th Jan 22, 7:10am 1641492653

Well spoken, Carlos!

I'm sticking with my Hillman Hunter.

TTP

by GV 27 | 7th Jan 22, 7:18am 1641493123

If you're going for 'driving engagement' then you're about 20 years too late on the STI Impreza my guy.

by Carlos67 | 7th Jan 22, 10:43am 1641505380

Yeah nah, just sold my 30 year old sports car, sure there is nothing like raw power with no traction control and zero safety features except ABS brakes but things have moved on. My current 2004 Subaru will get traded on the new STi if it makes the grade power wise. EV's are just a car from getting from A to B and are for people who have zero passion for actually driving. Sure that may change in the future but the problem is the demand for SUV's is so high thats not going to change anytime soon. Performance electric sports cars is just not happening and the few that are get priced out of the picture.

by GV 27 | 7th Jan 22, 11:13am 1641507207

Yea nah enjoy your new STI, I think if you're driving a 30 year old Sportscar (that's like....GT4, R32 territory, Christ I'm old) then you're in for a shock at how pig-heavy the modern STI has gotten and how far removed they are from the cult hero cars of the 1990s.

However, if you have somewhere secure at home and can afford a decent tracker, the Bug Eye Imprezas can now be legally imported (2001 first-reg dates in Japan and earlier). I'd have one of those in a heartbeat, with modern tuning you could get Group N speed out of it with little hassle. My goal is to get a cheap EV and use the savings I get from commuting to pay for toys in the future. I couldn't give a shit about 'passion' when it comes to driving to and from work, I bought a Mini Cooper S because I thought it would be a fun daily driver. Look at where that got me.

A cheap Leaf and a Group A/N hero car sounds like the perfect garage to me.

by Carlos67 | 7th Jan 22, 11:29am 1641508179

Yeah you do have to factor in the "getting older" unfortunately. Things change so what I no longer want is the constant maintenance because I do everything on the car myself. You get to the point where you now have money to spend and are sick of getting covered in oil under cars. With old cars you need TWO cars in case the other craps out. I'm now at the point of ONE new car and just do the fun jobs like oil and filter changes and brake pads now and again. Huge amount of fun modifying my car but the new one will have enough power so it will remain 100% stock.

by GV 27 | 7th Jan 22, 11:34am 1641508442

Fair enough. Hell, you might as well enjoy the manuals while you can, I guess.

by Sibrit | 11th Jan 22, 4:07pm 1641870460

Do we include hybrids in the EV stable? I'm waiting for the new Alfa Romeo Tonale, which they say will go into production this year, probably for sale in 2023. They also have a compact SUV in the making. I'm thinking those will be a lot of fun, and maybe not as pricey as their full-sized ICE sibling, the Stelvio.

https://alfaromeo.co.nz/news-detail/the-new-alfa-romeo-tonale-concept-c…

by linklater01 | 7th Jan 22, 10:16am 1641503796

Carlos67,

You have clearly never driven an EV. "Electric is a yawn fest," Why? Should I wish to, my Leaf can out accelerate most ICE cars from a standing start. No, it doesn't make a vroom vroom noise, but i outgrew that when I grew up and it requires just as much 'driver input' whatever that means.

You sound like yet another Kiwi driver who thinks speed limits are an insult to their masculinity.

by Carlos67 | 7th Jan 22, 10:49am 1641505748

Driver input is a 6 speed manual. If you like driving an auto because you cannot be bothered shifting then electric is for you. What's speed got to do with anything, pretty sure the acceleration of electric and top speeds are well over the posted limits. Don't worry yourself the move to electric and GPS will soon see the cars limited to the maximum posted limits. Acceleration may become more important when the fastest the car will ever go is 100km/hr so you will just have to settle for the buzz of 0-100 in under 3 seconds.

by Pragmatist | 7th Jan 22, 2:48pm 1641520131

I've got ~1200kms in a Tesla model 3 booked, I'll let you know if it's going to be enough to convince me to get an EV as my next car.

Mate with a model 3 performance reckons he's never going back to ICE, his previous was an rs6 wagon.

by Carlos67 | 7th Jan 22, 4:19pm 1641525576

Audi make some kicker wagons but they are all Autos and they are unreliable and horrifically expensive to buy and maintain. Simply not an option for me.

by Pragmatist | 7th Jan 22, 6:02pm 1641531776

I'd take a good flappy paddle gearbox over rowing the box any day, and my current car has the best 6spd I've ever hustled along a windy road. Certainly makes an E153 feel agricultural by comparison. Agree on the cost of running an Audi, or anything high performance by VAG.

Don't worry, someone will soon make a bolt on dash with a fake tacho, a speaker for engine noises and a fake gearshift so you can pretend you are Aryton.

by realterms | 7th Jan 22, 9:05pm 1641542758

I'll make a prediction: yes it will.

I hate automatics so much, if you're really trying to drive and not just crawling in traffic. They're stupid and always in the wrong gear. With an EV there's no need: instant torque, always available, as if you've just nailed the change perfectly.

by Pragmatist | 8th Jan 22, 11:01am 1641592895

Yep, nothing worse than a modern 8 speed auto that's programmed (as they all are) to save fuel and aggressively change up so the motor is barely spinning, then you want to accelerate and it has to change down 4 gears before it can accelerate.

by Greatestfool | 10th Jan 22, 9:12am 1641759121

You're right of course. There are no words to describe slamming into third gear, planting your foot down, listening to the ear shattering engine roar, the car vibrating as it wears itself out, the wasted heat shimmering off the hood, the clouds of poisonous exhaust being blasted out the back and then being effortlessly and silently overtaken by an EV. Or maybe there is a word: regret.

by Pragmatist | 10th Jan 22, 10:11pm 1641805877

Lol, ear shattering engine roar? Slamming into third.. Either you don't know how to drive a manual or you must've driven some real s#&theaps.

by Squishy | 7th Jan 22, 1:08am 1641470916

It'll be interesting to see if generation and transmission infrastructure can cope. We're adding demand rapidly but already face capacity crunch events at peak demand.

by realterms | 7th Jan 22, 2:32pm 1641519146

Scheduled charging means the contribution to peak demand shouldn't be great. But yes overall demand will need to be factored in.

by Cur8or | 6th Jan 22, 3:01pm 1641434466

Just think of how much heat all of those car loans took away from mortgages. Maybe a couple of billion?

by JimboJones | 6th Jan 22, 7:43pm 1641451424

So it turns out price can drive better environmental outcomes, who would have thought? The “subsidy” is one of labours best policies, they need more of those, they will never please everyone and need to stop trying to.

by waymad | 7th Jan 22, 5:41am 1641487311

"But new commercials - primarily but not only double-cab utes - registered another 54,389 vehicles and also a record."

Perhaps a bit of front-running of the Ute Tax here? If so, 2021 might mark a high point. Until the electric utes arrive, any day now....soon ish.......

by solardb | 7th Jan 22, 11:30am 1641508231

LDV already have a BEV "transit" style van on the market . At around 50k , its going to be a game changer for around town couriers etc.

by Uninterested | 9th Jan 22, 6:51am 1641664265

I would be very wary buying a Chinese thing like that. Reliability? Rust proofing?

by solardb | 9th Jan 22, 9:03am 1641672224

The couriers love the ice version. 1/2 the price, 5 year warranty, many calculated you could write it off after 5 years, and still be ahead. Next minute some of them are clocking up 500k without problem, whilst transit owner s looking at thousands for a fuel pump or whatever. Same with ssyangong, used to be poor man's Mercedes , now people saying they are more reliable than a Merc.

by Officebound | 7th Jan 22, 7:49am 1641494991

Remember the subsidy for non plug in hybrids kicks in 1st April 2022, which will further increase the ratio of NEV's being sold. Those are often priced much closer to petrol-only models, so expect them to be marketed hard and a lot sold.

Also it was early 2021 when NEV's had 10% market share, great to see the subsidies being effective.

by Rumpole | 7th Jan 22, 10:37am 1641505049

The figures for Hybrids show that Joe public better understands the reality of BEV at present. My 2.4 Ltr Toyota Crown Hybrid averages 5 Ltrs of 95 per100 Kms and will give most cars a run for their money if I select 2nd and add Electric, but no point just let the impatient pass, on their way to the Casketeers.

by solardb | 7th Jan 22, 11:34am 1641508447

Used to love taking off form the lights in my old Prius . A few surprised stares from the petrol heads.

Went 15 years on a 10 year life battery too , albeit with a few tweaks from me.

Plan to restore it, one of the originals that were not supposed to leave Japan.

by Uninterested | 9th Jan 22, 6:54am 1641664474

Sure, but its a one trick pony. There is NO fun to be had from the CVT or suspension in a Prius on a windy road..

by solardb | 9th Jan 22, 9:09am 1641672579

If I want fun I go to 2 wheels.but the Prius had great traction control, went to a few remote building sites in it, the boys sitting around saying how well Thier utes did to make it in, and I turn up in a Prius. That was fun.

by Pragmatist | 7th Jan 22, 2:50pm 1641520246

Non plugin hybrids aren't NEVs, they still derive 100% of their energy from burning dinosaur juice. They are just more efficient at it.

by Gen X-ploited | 7th Jan 22, 6:42pm 1641534133

Does NZ provide more subsidies to the well off than any other country?

by nktokyo | 8th Jan 22, 8:27am 1641583649

Good stuff.

by Smudge02 | 9th Jan 22, 8:20am 1641669604

Yep good times alright, new car sales up so happy days. I see it in my city every day, so many brand new Audi's, Merc's, Jaguar's, Maserati's etc and some I have never even heard of! They all have one thing in common though, they all drive past the growing number of people who have been left behind, sleeping on the streets or in their cars.