Electric vehicles to be RUC exempt

Transport Minister Steven Joyce announced today that the government will exempt light electric vehicles from paying road user charges (RUC) for four years, as a first step towards encouraging their uptake.

At present light electric vehicles (weighing up to 3.5 tonnes) are classed as diesel vehicles for the purpose of road-user charges. This results in a cost of approximately 3.6 - 4 cents per kilometre which is largely used to develop and maintain the roading system.

Mr Joyce says the government is keen to encourage the uptake of electric vehicles.

The Government sees private vehicles continuing to be the most significant mode of transportation for most New Zealanders. Therefore it is important that we encourage the use of alternative fuel technologies in order to help meet our environmental obligations over time.

"This technology can make a significant contribution to improving the efficiency of our vehicle fleet. Electric cars can also decrease our reliance on imported fossil fuels and improve our energy security," says Mr Joyce.

"Combining highly efficient electric motors with our competitive advantage in renewable electricity generation will reduce the greenhouse gases produced by the transport sector, as well as the harmful emissions affecting air quality."

The RUC exemption will come in effect on 1 October 2009 and will apply until 2013. The government will reassess the initiative at this time.

This initiative will have the effect of aligning the treatment of electric vehicles with that of biofuels, via the previous announcement in regards to biodiesel and bioethanol.

"There are very few electric vehicles currently in the fleet and the forgone revenue costs will not be significant. This is about government supporting a new fuel technology and encouraging early adopters," says Mr Joyce.