Exemption for light electric vehicles from road user charges - 2009
Last updated on
12/01/2012 4:34 p.m.
This page contains questions and answers that were published in 2009 when the exemption for light electric vehicles from RUC was announced.
Questions and answers - exemption for light electric vehicles from road user charges
Why are electric vehicles subject to road user charges?
Diesel and electric powered vehicles pay for their road use through road user charges. Petrol, CNG and LPG powered vehicles pay for road use through fuel excise duty charged directly on the fuel they use.
What sort of electric vehicles does the exemption cover?
The exemption will apply to any motor vehicle whose power is wholly or partly derived from an external source of electricity and whose gross laden weight is 3.5 tonnes or less.
What is the exemption worth to motorists?
The exemption applies only to electric vehicles with a gross weight of 3.5 tonnes or less. A three tonne licence for a car or light van currently costs $37.71 (incl GST) per 1000 kilometres (approximately $377 a year for a typical road-user).
Why does the exemption apply only to light vehicles?
Most heavy electric vehicles are trolley buses. Funding for trolley bus services is already subsidised through local and central government. As heavy vehicles cause more road damage than light vehicles they are charged considerably higher levels of RUC. Exempting heavy electric vehicles from RUC may cause higher-than-expected revenue losses.
Why are light diesel motor vehicles not exempt from RUC?
The exemption of light electric motor vehicles is intended as a kick-start for electric vehicle technology. While clean diesel powered vehicles offer fuel economy benefits over petrol powered vehicles, the technology is already well established. In concert with more stringent diesel fuel and vehicle emissions standards, the proportion of diesel vehicles in our fleet has increased from 13 to 16 percent over the period from 2003 to 2009.
What about electric vehicles that have some sort of conventional motor?
Generally there are two categories of electric vehicle; those whose power is wholly derived from an external source of electricity (a battery electric vehicle); and those whose power is partly derived from an external source of electricity (informally called a plug in hybrid electric vehicle). Prototypes of plug-in hybrid electric vehicles typically use petrol as the secondary fuel. Should plug-in hybrid electric vehicles using diesel as a secondary fuel become available, they too will be eligible for the exemption.
Does a hybrid vehicle like say the Toyota Prius qualify for the exemption?
As a petrol hybrid vehicle the Toyota Prius carries a battery pack to assist with fuel efficiency but does not re-charge by plugging in to an external power source. Such a vehicle was never required to pay RUC, as all of its power was derived from petrol. Due to this it is not classified as an electric vehicle for the purposes of the exemption as there is no external source of electricity supplied to the vehicle that assists with motive power. The owner of this type of vehicle pays fuel excise duty on the petrol consumed.
When does the exemption end?
The exemption will terminate in 2013 unless the Minister of Transport decides to extend the period of exemption.
How will plug-in hybrid electric vehicles be taxed when the exemption ends?
There are no plug-in hybrid electric vehicles in the fleet at the moment, however under the current law they would be liable for RUC and petrol excise duty. The Ministry of Transport will consider this issue prior to the expiry of the exemption.
Where can I find more information about this?
You can look at the NZ Transport Agency website or ring the help-desk at the RUC Contact Centre on 0800 655 644 Monday to Friday 8am to 6pm.