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New Zealand / Press Releases
Look Who’s Torquing: Demand for Electric Vehicles Is Surging

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by Liam Harrison
Oct 22 2019

Although overall car sales have declined over the past year, sales of electric vehicles in New Zealand are on the rise, giving a revenue boost to the Car Wholesaling industry and Motor Vehicle Retailing industry. The first shipments of Tesla electric vehicles have recently arrived in New Zealand, giving a significant boost to electric vehicle registrations.

‘Although Tesla has surged as a share of electric vehicles over the past month, the surge can partially be attributed to the backlog built up over the past two years built up by pre-orders. Tesla is unlikely to sustain its market position as a share of total electric vehicle sales over the longer term due to its higher pricepoint,’ said IBISWorld Senior Industry Analyst, Liam Harrison.

According to IBISWorld, the higher price of electric vehicles, combined with lower infrastructure support compared with traditional petrol and diesel-fuelled vehicles, has been a significant barrier for consumer adoption of electric vehicles.

Government policy

To encourage consumers and businesses to purchase electric vehicles, the Central Government introduced the Electric Vehicles Programme on 5 May 2016, which includes policies such as:

  • Exempting electric vehicles from Road User Charges on light and heavy vehicles until they make up 2% of the respective vehicle fleet
  • Providing $1 million annually for promoting electric vehicles until 2021
  • Introducing a contestable fund of up to $6 million per annum to support and encourage innovative low-emission vehicle projects
  • Implementing a target to double the number of electric vehicles in New Zealand every year, to reach approximately 64,000 by 2021.

Other policies that have been proposed to further encourage a switch to electric vehicles include:

  • The Clean Car Discount, which would allow New Zealanders to receive up to an $8000 discount for new electric vehicles
  • The Clean Car Standard fuel emissions policy, which would impose a fee of up to $3000 for emission-production light vehicles.

‘These current and future policies are anticipated to assist in driving demand for electric vehicles. Environmental concerns, particularly on issues such as pollution and climate change, have also been key drivers for electric vehicle purchases over the past five years, and will likely increase demand for electric vehicles over the next five years,’ said Mr Harrison.

New Zealand is well suited to electric vehicles, as its comparatively small landmass allows for investment in charging stations at a reasonable cost compared with countries that have larger landmasses, such as Australia. Greater demand for electric vehicle charging stations is forecast to benefit the Heavy Industry and Other Non-Building Construction industry over the next five years, as both businesses and government are projected to invest in charging station infrastructure.


IBISWorld anticipates that a rise in electric vehicles could place pressure on the Fuel Retailing industry, as New Zealanders are encouraged to switch to hybrid and pure electric vehicles. The Central Government has suggested the proposed policies could save New Zealanders up to $3.4 billion in fuel costs over the lifetime of an average vehicle. However, the Electricity Retailing industry is forecast to benefit from greater adoption of electric vehicles, as more New Zealanders will likely consume electricity during off-peak hours.

‘Although electric vehicles are becoming more popular, they still represent a small portion of vehicle sales. Including hybrid vehicles, electric vehicles represented less than 10% of all vehicles sold in September,’ according to Mr Harrison.

Almost 16,000 electric vehicles were registered in New Zealand in September 2019, up from just under 1000 in 2015. This trend places electric vehicle sales on the trajectory to hit the Central Government’s outlined goal of doubling the number of electric vehicles on the road each year through 2021, to 64,000 vehicles.


IBISWorld reports used to develop this release:


For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Kim Do
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3641

Mobile: 0422 773 995