Kiwi families will be supported to make the transition to low-emission alternatives through the establishment of the
Clean Car Upgrade, a scrap-and-replace trial, with funding from the Climate Emergency Response Fund.
“The Clean Car Discount Scheme has been successful in supporting the uptake of electric and hybrid vehicles. However, we
know for many families, the cost of transitioning to cleaner vehicles can be too expensive. Starting with an initial
trial of up to 2,500 vehicles, the Clean Car Upgrade will provide targeted assistance to lower- and middle- income
households to shift to low-emission alternatives in exchange for scrapping their old vehicle,” said Transport Minister
“Through supporting the uptake of cleaner vehicles, we are not only helping families do their bit for our planet, but
also protecting them and our economy from future economic shocks and high fuel prices. This will also help safeguard New
Zealand by reducing our international dependency on fossil fuels.
Climate Change Minister James Shaw said the initiatives announced today are a critical part of the Emissions Reduction
Plan that will put Aotearoa on the path to net zero.
“The package announced today signifies a huge step in making sure people have clean, green, affordable ways of getting
about. We have long known that there are some huge wins to be had in decarbonising our transport sector, and it has
formed a key part of the action we have taken to date – including the clean vehicle discount.
“These new initiatives are about making it much easier for New Zealanders to make zero or low-emission transport
choices, be they safer walking and cycling options, better public transport, or more affordable electric vehicles. Just
like many other aspects of the Emissions Reduction Plan, tackling climate change by reducing transport emissions, comes
with the very happy coincidence of making people’s lives better,” James Shaw said.
“Families who trade in their vehicle will receive support for the purchase of EVs, PHEVs and hybrids. By taking
advantage of the Clean Car Upgrade, families will not only benefit from lower transport costs but will also be able to
replace their high-emitting older vehicles with a safe and sustainable alternative.
“Switching to a low- or zero-emission vehicle will also reduce costs for families in the long term, due to their lower
running costs. For EVs charging at home, during off-peak hours, the cost would be equivalent to buying petrol at around
40c/litre. A similar scheme in California has seen more than 10,000 Californians scrap their old, dirty cars and replace
them with cleaner alternatives such as new and used zero-emission, plug-in hybrid, or hybrid cars.
“For some families owning a vehicle is a luxury, which is why we are also trialling a social leasing scheme that will
support low-income families to lease a safe, low-emission vehicle from a community organisation. The trial is expected
to operate from early 2023 in three communities to test its effectiveness across New Zealand.
“This will provide a leg up to those who wouldn’t otherwise be able to afford to shift to a low-emission vehicle,
helping them reduce their living costs and get ahead.
These initiatives are part of a wider Budget 2022 package, which is supporting the transport sector to take a leading
role in New Zealand’s efforts to tackle climate change, following the release of the Government’s first Emissions
Reduction Plan (ERP) today.
“Transport is one of our largest sources of emissions and accounts for 17 per cent or one sixth of total greenhouse gas
emissions. Equally, it is an area where Kiwis can make a difference immediately, and today’s announcement is about
giving people that chance to change the way they travel,” Michael Wood said.
“Every positive change in habit, helps us as a nation move a step closer to achieving our required carbon reductions.
“That’s why we are investing $1.2 billion into the transport sector as part of the Climate Emergency Response Fund
package to support people to move to public transport, increase walking and cycling, accelerate the uptake of cleaner
vehicles with a focus on equity, and decarbonise our freight system. This is expected to reduce carbon emissions
equivalent to taking 181,000 cars off the road between now and 2035.
Today’s package includes $350 million to support Kiwis make cleaner transport choices. With this investment we able to
fund the rapid roll-out of at least 100 km of safe urban cycleways to build more connected networks at pace; create
significant safety improvements in around 25 pedestrian areas, and support safer, greener, and healthier travel to
75-100 schools. This investment will also help to make public transport easier to use through bus priority improvements
in over 40 locations alongside improvements to shelter, access, and customer information at up to 500 stops and
“There is strong public support in our biggest cities to move quickly on opening up streets for safe walking and
cycleways and improving the frequency and reliability of public transport services. This helps to unclog our streets,
allowing goods and services to move around more efficiently, supporting greater productivity and building our country’s
“Investment in green transport options is a triple win for climate action – it reduces traffic congestion, promotes a
healthy, active lifestyle and clears up the air around us. As we saw with our investment in Northern Busway, when we
build transport infrastructure that works, people use it.
“This investment builds on the Government’s record investment into transport services and infrastructure, including over
$6 billion in public transport and walking and cycling, and local road and state highway maintenance, to connect
communities, ensure the reliable movement of freight and improve resilience across the country.
“We know that it will take time to reduce our transport emissions, but today is a meaningful step forward that will
result in real change,” Michael Wood said.