In mid–June 2021, the
Sixth Labour Government announced that it would introduce subsidies to make
electric vehicles cheaper while raising the price of new petrol and new diesel vehicles, commencing in July 2021. This policy announcement followed a report by the
Climate Change Commission on 9 June 2021 advocating the reduction of farm animal numbers, a ban on new household gas connections by 2025, and a shift to electric vehicles in order to reduce greenhouse emissions. In response to the policy announcement, EV City owner David Boot said that it would boost demand for electric cars while expressing concern about the need for educating electric car users. Motor Trade Association chief executive Craig Pomare claimed that the rebate would not be enough to encourage motor users to make the switch to electric cars while
Federated Farmers national president
Andrew Hoggard expressed concerns about the lack of electric vehicle alternatives for farmers and tradespersons. In July 2021, the farming advocacy group
Groundswell NZ called for the abolition of the Clean Car rebate scheme, regarding it as a "
ute tax". They said there were no electrical alternatives to the utes widely used by farmers, horticulturalists, industry support people, and tradespersons. The Clean Car Discount was envisioned as financially neutral with the "Ute Tax" charges covering the rebates and administration costs. However, by 2023, the scheme had received more money in rebates than in charges from the "ute tax." By December 2023, the Government had paid out NZ$579 million in rebates and NZ$13.5 million in administrative costs, while the Ute tax charges had only generated NZ$290 million, leaving taxpayers with a deficit of NZ$302.5 million. During the
2023 New Zealand general election, the opposition
National and
ACT parties campaigned on repealed the Clean Car Discount, arguing that subsidising the purchase of
electric and
hybrid vehicles through a "ute tax" of up to NZ$6,900 on
utility vehicles was unfair on groups like farmers, who had no viable low-emission alternative to utes. On 29 November, the Government released its 100-day plan which included repealing the previous Labour Government's Clean Car discount programme. Scrapping the "Ute tax" and the Clean Car discount was one of the terms of National's coalition agreement with ACT. ==Legislative passage==