What's holding back NZ's transition to electric vehicles?

Insurer says the "belief" is there but obstacles remain

What's holding back NZ's transition to electric vehicles?

Motor & Fleet

By Daniel Wood

According to a study by intermediated insurer NZI in 2023, the importance of sustainability to many car fleet owners showed they were positively disposed towards switching their fleets to electric vehicles (EV). One important motivation, according to research in NZI’s EV Fleet Guide, was the prospect of lower costs.

Eighteen (18) months later, New Zealand’s movement towards widespread EV adoption is still slow compared to some other countries, including in the fleet space.

“In the private motor vehicle space, EV uptake among our customers has been slowly growing,” said Garry Taylor (pictured above). “During 2024, EVs made up 2% and hybrids around 7% of total private motor vehicle policies.”

Driving to increase confidence in EVs

Taylor is NZI’s executive general manager business. He and other insurance leaders suggest that they remain confident that transitioning motor fleets to EVs could be an opportunity area for brokers.

“Increasing New Zealanders’ confidence and knowledge in these vehicle types will be key to adoption,” he said.

In fact, NZI’s 2023 study identified the major obstacles that continue to hold back stronger EV uptake. Removing these blockages, said the report, would encourage fleet drivers who are confident in sustainability to make more EV purchases.

“Our research shows that businesses are driven by sustainability goals and cost savings on fuel and maintenance when incorporating EVs into their fleets,” said Taylor.

The Fleet Guide found, he said, that almost 90% of fleet drivers “believe sustainability is important to them.”

“However, the reason this ‘belief’ hasn’t yet converted to EV purchases in significant numbers is also examined by the report,” said Taylor.

Ongoing challenges: charging infrastructure and EV range concerns

Those reasons persist in 2025. A lack of charging infrastructure and ongoing concerns about the range of EVs continue to hold businesses back.

“Insufficient charging infrastructure can put an EV transition programme at risk,” said Jessica Rodger, NZI senior climate reporting lead.

This conclusion is based on NZI’s own experience as part of parent company Insurance Australia Group’s (IAG’s) Electric Vehicle Early Adopter Programme.

Six NZI volunteers took possession of EVs a few years ago and that fleet has now expanded to about 300.

Based on its experience adopting EVs, NZI’s report suggested that a “a major question” for the nation’s EV adoption is how to provide enough charging stations.

The report said that a lack of charging stations is a major impediment to faster uptake.  “Insufficient charging infrastructure can put an EV transition programme at risk,” said Rodger.

One of the issues seems to be that establishing adequate charging infrastructure involves multiple stakeholders. For example, the report said businesses who lease premises will have a more complex task because decisions need to involve the owners.

“Concerns about ‘range anxiety’ and the availability of publicly accessible charge points continue to be barriers to electrifying the vehicle fleet,” says the website of the Ministry of Transport.

Anecdotally, and in its report, NZI has also identified widespread concern about whether EVs have enough driving range.

“Range anxiety is a key barrier to widespread acceptance of EVs,” said the report.

“We know from our EV Early Adopter Programme that some common reasons people are cautious to make the switch include kilometre range anxiety and concerns about the availability of charging infrastructure,” said Taylor.

He said addressing these issues through better education and infrastructure development could help increase EV adoption.

Which sectors are buying the most EVs?

Much of the current EV growth in the country, said the NZI study, is driven by government and corporates. 

Record global EV sales

According to Rho Motion, an EV and energy transition research group, global EV sales grew 25% in 2024. More than 17 million passenger and “light duty” vehicles were sold

This week, the London-headquartered researchers reported that, in China, EV sales grew 40%. The European EV market ended the year down 3%, they said, partly due to new emissions standards testing. The researchers found that the US and Canada markets grew 9% in 2024, “helped by the vehicle tax credits that incoming President Trump has announced he plans to cut.”

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