The Government has announced major changes to the Clean Vehicle Standard in a bid to make vehicles more affordable for New Zealanders. These changes, set to take effect from 1 January 2026, are aimed at easing financial pressure on car importers and preventing higher prices from being passed on to everyday buyers.
Transport Minister Chris Bishop said the adjustments were essential to protect consumers, especially as the cost of living remains a concern for many families.
“Kiwis from all walks of life buy cars for all sorts of reasons – whether buying an affordable first car, upgrading to a bigger car for their growing family, or investing in a vehicle for their small business," Mr Bishop said.
“At a time when Kiwis are still feeling the pinch, the last thing they need is the cost of cars going up by hundreds, or even thousands, of dollars – but unless the Government acts urgently to fix the Clean Car Standard, that’s exactly what could happen.”
The Clean Vehicle Standard, which took effect in early 2023, encourages car importers to balance high-emission vehicles with low-emission alternatives. Those who fail to meet emission targets are charged, while those who exceed them earn credits. However, a supply shortage of low-emission used vehicles and a drop in demand for new electric vehicles has made it hard for importers to meet the targets.
Currently, around 86 percent of importers are facing extra charges instead of earning credits. Even some hybrid vehicles are now incurring fees under the current scheme.
To address this, the Government will temporarily reduce charges by nearly 80 percent for both new and used vehicles during 2026 and 2027. New vehicles will drop from a top rate of $67.50 to $15 per gram of CO₂, while used vehicles will see charges fall from $33.75 to $7.50 per gram.
Other changes include protecting existing credits from expiry until the end of 2028 and launching a full review of the Clean Vehicle Standard, with recommendations due by June 2026.
“These changes will mean that the charges some of our most popular imports face will be significantly reduced. Depending on how much of the charge the importer can offset and how they price their vehicles, Kiwis could avoid thousands on the price of their vehicle,” Mr Bishop said.
He added that in total, the changes could prevent $264 million in charges being passed on to consumers.
The amendment will be introduced through the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2), which has just returned from Select Committee. The changes are expected to pass this week.