Rising Fuel Costs Set to Drive More Kiwis Towards Electric Cars

After the government announced their plans for fuel taxes, many discussions have been brewing about whether it’s time to switch to electric cars.

On the 3rd of April, the government announced their long-term plans for raising petrol tax from 9-12c a litre over the next three years nationwide.

Auckland council at the same time announced a regional fuel tax of an additional 11.5c a litre (GST inclusive). The changes will create noticeable differences in people’s transport costs, especially for Aucklanders.

Even just the 3c a litre increase for the whole of New Zealand will mean an average additional cost of $78 a year assuming you fill your car once a week (according to the minister of transport Phil Twyford).

Volvo’s General Manager (Coby Duggan) predicts that the taxes will speed up the amount of charging stations being built around the country and increase consumer demand for hybrid and electric vehicles. The fuel hike will no doubt serve as a boost for electric vehicles, making them a more financially viable option. Whether you are driving petrol, diesel or electric you’ll need to factor in motor insurance to your annual vehicle costs as well.

People purchasing electric cars in New Zealand has already been rising dramatically, up from 38 in 2013 to 5804 near the end of 2017. These taxes look set to boost those sales even more. The Energy Efficiency and Conservation Authority aims for New Zealand to reach the target of 64,000 electric vehicles here by 2021, which seems a reasonable goal to achieve.

Things are changing rapidly now, and there’s no signs of the rise in electric vehicles slowing, which is great long term for the environment, and to cut transportation costs as well. In March this year, AUT started running the country’s first fully electric bus service, between its north and south campuses.

Dan Alpe the Chief Operating Officer of Jucy has also weighed in on the discussion saying as fuel prices rise they expect to receive more requests to rent their electric vehicles. “We are testing the latest battery technology at the moment to ensure these vehicles can travel the distances between charging points around the country” says Dan. He also talked about how they are pushing for more charging stations in popular camping grounds and other tourist areas at the same time.

The high cost of fuel compared to other developed countries and popular tourist destinations worldwide has made New Zealand a less affordable option for tourists.

The Chief Executive of the National Road Carriers Association (David Aitken), which collectively operates over 15,000 trucks, said that “we realise more investment is needed in transport infrastructure but it is a case of what the priorities are”. He went on to talk about the need for more trucks in the future as our cities continue to expand, and the fact that those “trucks need better, safer, less congested roads”.

Increased transport costs mean increased living costs, the trucks delivering our food and goods will no doubt pass on those additional costs to consumers. Will salaries rise to meet those additional costs? For Auckland especially, with slow travel times, housing being built further and further from the CBD, high rates, and additional taxes it is becoming increasingly difficult for the average resident to stay above the poverty line.

This recent move by the government has brought up a lot more questions that solutions.

Will a fuel tax mean less cars on the road? Will petrol cars just switch to electric ones but maintain the same level of congestion and constant road works from over used roads? Will public transport become cheaper and more reliable? Will the money taken from these tax hikes be used in the right projects to solve our transport woes long term?

One thing is for sure, each of us now has a lot to think about and plan for after this decision to raise fuel tax.