A reduction in the cost of importing new and used vehicles has been announced, with the Government introducing changes it says will help prevent higher prices being passed on to New Zealand buyers.

Transport Minister Chris Bishop said the update to the Clean Vehicle Standard aims to ease pressure on importers at a time when families are already struggling with rising costs.

He said many New Zealanders rely on affordable vehicles, whether they are purchasing a first car, upgrading for a growing family, or buying a vehicle for a small business.

Bishop said the Clean Vehicle Standard, introduced in early 2023 to encourage lower emissions, is no longer aligned with the realities of the car market. He said there is a shortage of cleaner used vehicles and declining demand for new electric vehicles, leaving most importers unable to meet their emissions targets.

He said eighty six percent of importers are currently facing net charges rather than receiving credits, and some hybrid vehicles are now attracting charges under the scheme.

Bishop said without intervention, those costs were likely to be passed directly to buyers through higher vehicle prices and reduced choice.

The Government’s changes include a temporary reduction of charges by nearly eighty percent from 2026 to 2027. The top rate for new vehicles will drop from sixty seven dollars fifty per gram of CO2 to fifteen dollars, and the top rate for used vehicles will fall from thirty three dollars seventy five to seven dollars fifty.

No credits will expire before 31 December 2028, and a full review of the Standard is under way, with recommendations due to Cabinet by June 2026.

Bishop said the reduced charges mean some of the country’s most popular imports will face significantly lower fees, preventing thousands of dollars in potential extra costs for buyers.

The Government estimates the changes will avoid two hundred and sixty four million dollars in net charges that could otherwise have been added to vehicle prices.

Bishop said the Clean Vehicle Standard is not working in its current form, and the temporary adjustments will protect consumers while a full review takes place.

The amendment will be made through an update to the Land Transport Clean Vehicle Standard Amendment Bill number two, which has been reported back from the Select Committee. The Government expects it to pass this week and take effect on 1 January 2026.