Cabinet has confirmed the Clean Vehicle Standard (CVS) will remain in place for both new and used vehicle imports, ending months of uncertainty over whether the Government would scrap the scheme altogether. Transport Minister Chris Bishop announced the decision on 21 August, alongside a commitment to set separate CO2 targets for used vehicle imports, a change to be worked through as part of the Stage 2 review.
“The first stage of that review was carried out earlier this year,” Bishop said. “It found the Standard to be the most cost-effective way to increase the availability of lower-emissions vehicles in New Zealand. Most vehicle industry stakeholders who took part in the review also supported retaining the Standard.” Officials will now engage with industry on settings, reporting back early next year; new targets are due to take effect from 1 January 2028.
How close it came
Retention was not a given. The review had scrapping the Standard on the table as a genuine option — a step that would have left New Zealand as one of only two OECD countries without a vehicle emissions standard, alongside Russia. It followed a rocky year for the scheme: in November 2025, the Government cut CVS charges by roughly 80%, from $67.50 to $15 per gram of CO2 over target for new vehicles and from $33.75 to $7.50 per gram for used imports, after most importers found the original targets impossible to meet without passing costs on to buyers.
Bishop acknowledged the pressure that led to that decision. “In 2025, it became clear that the Standard’s settings were not well matched to market conditions,” he said. “Most importers were struggling to meet the passenger vehicle targets, with the charges likely to be passed through to consumers through higher car prices and reduced choice.” Even so, industry feedback favoured keeping the framework rather than dismantling it: “Removing it at this stage would be highly disruptive for the vehicle industry.”
Broad relief, different reasons
All three major trade associations welcomed retention. MTA Head of Advocacy James McDowall said the Standard “remains the last policy lever we have to influence vehicle CO2 emissions, and it stops New Zealand becoming a destination for less fuel-efficient, higher-emission vehicles that cost our customers more to run.” MTA argued consistently for keeping a standard through Stage 1, and McDowall said that the Ministry for Cities, Environment, Regions and Transport (MCERT) acknowledged that member input helped inform Cabinet’s decision.
Motor Industry Association chief executive Aimee Wiley called it “an important step towards a more durable and effective vehicle emissions framework,” crediting officials for “engaging seriously with the data, evidence, and industry expertise provided.” Both associations framed retention as only half the job: getting the settings right, they said, matters more than keeping the Standard alive on paper.
The used-import split
Not every part of the decision landed the same way. Cabinet’s move to set separate CO2 targets for used vehicle imports was something the Imported Motor Vehicle Industry Association (VIA) had pushed for, and MTA had argued against.
VIA chief executive Greig Epps welcomed the change as recognition of a structural problem the association has raised repeatedly. “New Zealand does not have one vehicle supply market,” he said. “New vehicle distributors source current production from global manufacturers, while used importers are sourcing vehicles that were manufactured years earlier, predominantly for the Japanese domestic market. Applying essentially the same emissions trajectory to those two very different supply channels was never going to produce a sustainable outcome.” VIA is also seeking changes to how credits operate for used imports, arguing the sector needs a genuine pathway to generate or access them rather than remaining permanently in deficit.
MTA disagrees with the split in principle. McDowall said used imports “do not need to be treated differently under the Standard,” and that MTA will now work with officials “to ensure any separate targets are grounded in market realities, do not disadvantage the used-import channel, and continue to protect affordability and choice for New Zealand motorists.”
Not everyone is convinced
Drive Electric, which represents the EV sector, has been the most consistently critical voice through the review, arguing for months that the Standard needed strengthening rather than merely preserving. Reacting to this decision, chair Kirsten Corson called for political parties to commit to a shared, long-term approach instead of revisiting settings every election cycle: “What we’re really calling for is a bipartisan approach so we can have strategic, long-term, consistent policies.”
That call found an unlikely ally in MTA chief executive Lee Marshall, who conceded the pre-2025 targets had swung too far the other way: “Before the 80% discount came into effect, there’s no doubt the standard was too aggressive.” Both said they would like to see clean vehicle policy taken out of the political cycle altogether — an outcome Stage 2 shows no sign of delivering.
The numbers that matter still aren’t set
What Cabinet has actually settled is narrow: the CVS survives, and used imports will get their own targets. What it has not settled is the figure that matters most to importers — what those targets, new and used, will actually be from 2028. Officials will spend the rest of this year and early next engaging with industry before reporting back.
That timeline runs past this year’s general election on 7 November, meaning the substantive work — the numbers importers will actually have to hit — will be the responsibility of whichever government is in office once voters have had their say. McDowall and Epps have both signalled they intend to be closely involved in that process; how much continuity survives the change of political attention between now and then is an open question.
What it means for the trade now
For the rest of 2026 and through 2027, nothing changes at the point of sale. The reduced charges introduced in November 2025 stay in place, and the flow of hybrid, plug-in hybrid, and EV stock into the market is expected to keep growing rather than stalling — the near-term picture for buyers and dealers is stability, not disruption.
What is not settled is whether the next set of numbers will hold up. MTA’s own test, as McDowall put it, is “whether the next set of targets stays realistic”, and that verdict will not be in until well into 2027, on the other side of an election, with an EV lobby, two vehicle-importer associations, and a trade body all watching for a different outcome.
