What a Government Grants You, They Can Easily Take Away

Never trust a government, especially when they come bearing gifts, like subsidies, grants or rebates. What a government grants you, they can easily take away. Pretty soon electric vehicle buyers are going to find that out  the hard way.

Electric cars currently have a free pass from paying Road User Charges (RUCs) – the fees charged to owners of non-petrol vehicles, starting at $76 per 1000 km.

But at some point, the Crown will have to bite the bullet and make EV owners pay RUCs – or develop some whole new funding mechanism. This is because it will need to fill a $2 billion gap left by declining petrol tax revenue, and pay for billions in national grid upgrades to accommodate electric vehicles.

The AA says the average motorist drives 12,000 km per year, which means $912 in RUC charges (at the usual rate; RUCs were halved from April 21 to September 21 this year in a parallel measure to the temporary petrol tax cut).

That’s going to take a lot of the gloss off the savings that EV owners enjoy today. (EECA’s rule of thumb is that charging an electric car is the equivalent of paying 40 cents per litre to fill a petrol tank).

EVs were exempted from RUCs in 2016 as one of its measures to boost electric vehicle uptake and Transport Minister Michael Wood recently rolled over the exemption until March 31, 2024.

Wood says he’s yet to receive advice on whether to roll over EVs’ exemption again.

NZ Herald

If the media are talking about this, it is fair to say they’ve been given a heads up on this? Otherwise why even speak of it?

Once this Government realises that there is a massive looming infrastructure problem as a result of them encouraging people to buy those gay EVs, they will then move to mitigate it BEFORE brown-outs start occurring as a result of your neighbour pulling up to his garage and plugging in his Tesla.

It is only fair then that we will see a move to full user pays for EV owners. That means it’ll be YOU funding the infrastructure upgrades to local electricity grids so that brown-outs can be avoided.

The Government, by giving EV owners a free ride for so long, have simply kicked the can down the proverbial road so that some other muggins has to fix it.

This Government loves taxes like pedos love kids. The more access they have to your pocket the better. Hence the start of conditioning that the free ride is over for EVs, and other vehicles.

A Waka Kotahi NZ Transport agency discussion document has raised the possibility that RUCs could be extended to electric motorcycles and e-mopeds.

Wood says some kind of system will have to be developed so that owners of plug-in hybrid cars are not double-charged for petrol tax and RUCs.

And Waka Kotahi’s report also says some kind of GPS system will likely have to be created to track electric cars’ mileage. While tracking systems are now common on trucks, it’s been a multi-year transition.

NZ Herald

Government-mandated tracking and charging… welcome to Big Sister, coming for your gay car or scooter soon.

But I have a great idea to add to that, how about having RUCs for any bicycle so they too can contribute to their under-utilised multi-million dollar bike lanes?

Just how big is the problem for the government? Well, it’s big: massive in fact. Both in terms of tax revenues and in infrastructure costs.

First, the Government currently receives income of around $4 billion per year from fuel excise (that is, petrol tax) and road-user charges on diesel vehicles (split roughly 50/50 between the two). In terms of petrol tax 70c per litre goes to road funding, 6c to ACC, 0.7c to a local authority fuel tax and 0.6c to the Fuels Monitoring Levy (and Aucklanders pay an extra 10c in Regional Fuel Tax). RUCs are the mechanism for non-petrol vehicle owners to chip in.

With only around 36,000 electric cars on NZ’s roads – or around 1 per cent of our total vehicle fleet, EVs’ exemption from RUCs is no big deal.

But, powered by the Clean Car Discount, EV sales are rising fast. Kiwis’ spending on new electric cars doubled to $877m the year to March, in a total vehicle market worth $6.1 billion).

And however green our Government’s policies in the years to come, EVs will increasingly dominate – simply because every major car manufacturer says it will abandon production of petrol-only vehicles by 2030. And new car buyers, mindful of resale value, will skew heavily away from internal combustion engines well before then (and of course, once EV sales have momentum, there is no need for a Clean Car Discount. This week, with EV sales soaring thanks to record fuel prices, the UK Government scrapped its £1500 grant towards the cost of a new electric vehicle).

A report by national grid operator Transpower said 50 per cent of NZ cars could be electric by 2035. That will leave a big hole in petrol tax revenue.

NZ Herald

A big hole that YOU will have to fill, out of YOUR pockets. The infrastructure issue is even worse.

Second, the EV takeover will necessitate upgrades to our power system. The Energy Efficiency and Conservation Authority (EECA) says a full transition to EVs will increase total electricity demand by 20 per cent.

A Transpower report said modelling indicated 10 to 15 large-grid power upgrade projects would be required by 2035, with each costing up to $250m – or up to a total of $3.75b. That’s another bill that will need to be paid.

Transpower does also say the transition away from more expensive petrol to EVs will save households a collective $4b – but assuming so, the Crown will need RUCs, or some other mechanism, to transfer some of that money to its own pockets if it’s to help fund power upgrades.

NZ Herald

Good luck getting all that through the Resource Management Act in time to be useful.

We won’t see any more dams built, and wind power is poos at generation, so it’s either thermal, in the form of whole shiploads of Indonesian coal, or someone is going to have to utter the unspeakable words that signal the world’s cleanest power as far as emissions go: nuclear power.

It’s a perfect storm that will end up with brown-outs, delays, burgeoning costs, blow outs and endless queues for ever-decreasing access to power reticulation.

It’d be funny if it weren’t so serious. But then again the virtue signallers and those driving around in the cloud of smug-emitting vehicles need a cold shower to wake them up from their current folly.

Achieving NZ’s goal of 100 per cent renewable energy, and net zero emissions by 2050 is a goal most would support – but it’s also a tab that’s got to be picked up.

Transpower says we’ll need as much new generation capacity in the next 15 years as we created in the past 40.

There will also be a new generation of smart-power meters at home that can help balance the load on the network as EV owners plug in at once, at the end of rush-hour – and councils who wake up to a raft of issues already being caused by a surge in EV ownership in high-density Auckland, where townhouses and apartments are increasingly garageless.

NZ Herald

Ask yourself this; can a government that couldn’t even build a house in a room full of Lego manage to build as much new generation capacity in the next 15 years as we created in the past 40?

The answer is of course they can’t. Enjoy your brown-outs, coming soon to Ardernistan, the latest addition to third-world countries.

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