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Car dealers say they do not have enough time to react to a raft of changes to the Clean Car Discount Scheme set to be implemented in two months.
From 1 July, most of the existing rebates for imported hybrid vehicles will be reduced or disappear altogether, while increased charges will apply to the highest-emitting petrol or diesel vehicles.
Transport Minister Michael Wood said the scheme was all about driving down emissions.
"That is the purpose of the scheme and it's achieving that hugely," he said.
"We've increased EV uptake from 3 percent to over 20 percent, and about 50 percent of the vehicles which now come in are low-emission vehicles.
"We always said that over time as it improved, we'd need to change the settings to keep increasing the ambition.
"But what the scheme does is it incentivises importers to get those vehicles into New Zealand, and it's doing that."
However, National's Simeon Brown said the system did not make sense.
"It's completely inequitable," he said.
"It's subsidising people who can already afford these choices and taxing people who either don't have a choice or people on lower incomes who were buying hybrids who can't because they're either neutral or they're going to have to start paying a tax on those vehicles."
Auckland City Electric Vehicles owner Nick Jackson said many vehicles imported from Japan would take at least two months to arrive in New Zealand, meaning they would automatically fall under the new rebates or charges.
The changes would take both suppliers and customers by surprise, he said.
"If some of their rebates are reduced, then they've got to find extra money to go for that.
"It probably should have been three, four, five, even probably six months out. That would have allowed the consumer and ourselves to plan in advance for it."
Jackson said the adjustments would have an impact on the prices of vehicles in the showroom.
Some of the most commonly sold cars previously considered low-emission, now would not qualify for rebates, he said.
"We have a Suzuki Swift hybrid that comes in, and currently they'll get a $1200 rebate, approximately. That actually drops to zero."
With popular cars like the Swift excluded, customers would need to find alternatives that achieved the same goal of moving away from petrol, Jackson said.
"It's sometimes the first car that people buy, going into their whole electric revolution.
"They don't want to just go straight into an EV, so they'll take on a hybrid.
"That's going to make them think harder now, and then we're going to have to look at what can we replace that with, which will give them the sense that they are getting a rebate and feel like they're doing more for the environment."
The charges or rebates associated with importing cars would depend on their level of emissions.
For vehicles at the top end of that spectrum - those emitting 192 grams of carbon dioxide per kilometre - the maximum charge for new vehicles would rise from $5175 to $6900.
Vehicles emitting 150-191g/km currently did not incur any charges, but that was set to change.
New emissions limits will discourage hybrid purchases - Motor Industry Association
The Motor Industry Association (MIA) is concerned changes to the government's clean car discount policy may have a negative effect on reducing emissions.
MIA chief executive Aimee Wiley said that would exclude most hybrids, which were key to reducing emissions.
"(It) may impact consumer purchasing decisions and ultimately the MIA is concerned around what that means for CO2 emissions lowering for the New Zealand fleet," she said.
"And given the pathway to battery electric vehicles - and all original equipment manufacturers are developing that technology as we speak - hybrids are a really good way to clean up our emissions as a transitionary approach throughout."
Wiley said higher fees for big emitters would also disproportionately impact light commercial vehicles, which she said lacked hybrid and EV options.
The MIA said it was also disappointed that its request for a higher price cap for light commercial vehicles to qualify for the rebate was not included in the changes.
It was also concerned there would only be two months before the changes came into effect, saying it would cause difficulties for the new vehicle sector.
Among them was the long wait lists for some new vehicles, where customers would have already paid a deposit and had an expectation about the overall purchase price.
Impact seen at the car yard
Checkpoint visited a car yard on Auckland's North Shore to see how the changes would affect its cars.
Under the current system, a 10-year-old 2L Subaru Forester did not have any associated rebate, but it also did not incur a fee.
However, with carbon emissions of 173g/km, it sat 23g above the new threshold, and come 1 July, would come with a fee of $950.
Meanwhile, medium-emission vehicles (101-146g/km) which currently received rebates would soon have them removed.
A nine-year-old Mazda Axela currently came with a small rebate of $439.
But in two months' time, the car's carbon emissions of 146g/km meant that rebate would disappear altogether.
And it was not just the higher emitters that would see changes.
A six-year-old Toyota Aqua, with emissions of 84g/km, currently came with a rebate of $1700.
But with the changes, that rebate would drop to about $1300.
As for the zero-emission vehicles in Jackson's fleet, the rebate for new models would reduce from $8625 to $7015, while for used imports it would increase from $3450 to $3507.50.
Jackson said shifting the goalposts might have the unintended consequence of deterring people from buying low-emission vehicles.
"People start becoming wary. If they can put in changes now, what's going to happen in the next three months after that - will they start being penalised?"
However, the Ministry of Transport said these changes would help to ensure the Clean Car Discount scheme was financially viable into the future.