New Zealand's decision to scrap electric vehicle subsidies 18 months ago is facing fierce criticism as fuel shortages grip the region, with the National-led government that eliminated the EV subsidy and "ute tax" now considering fuel subsidies instead.
The government promised market forces would prevail when it axed the EV incentives. Now it's floating the idea of subsidising the very fossil fuels that are running out, according to discussion on the New Zealand subreddit.
Mate, you couldn't write better irony if you tried.
The EV subsidy - dubbed the "Clean Car Discount" - made electric vehicles more affordable while adding fees to high-emission vehicles like utes and SUVs. The National-ACT-NZ First coalition campaigned against it as government overreach, arguing the market should decide what Kiwis drive.
Now the market is deciding - and it's deciding that fuel is expensive and scarce during Middle East instability. The same government that removed incentives for energy independence is scrambling to make fossil fuels artificially cheaper.
If New Zealand had kept encouraging EV adoption for another 18 months, the country would have thousands more electric vehicles on the road right now, reducing demand for imported petrol. Instead, the subsidy reversal sent a clear signal: fossil fuels were the safe bet.
Purchasers who chose larger petrol vehicles based on that policy now face soaring fuel costs. Those who bought EVs despite losing the subsidy are looking smarter by the day.
The broader Pacific is watching closely. Island nations have even less energy security than New Zealand, and many were looking to Wellington for climate leadership. Instead, they're seeing short-term political thinking trump long-term energy planning.
If the government does subsidise fuel, it'll just encourage higher consumption and faster depletion of whatever supplies remain during the crisis.
Pacific nations understand climate policy isn't abstract - it's survival. New Zealand used to get that. Now it's learning the hard way that betting against the energy transition has consequences.
