The Vehicle Industry Association is withdrawing its support for the Clean Car Discount Scheme.
The government has for months been downplaying data issues, particularly for used cars, that determine whether vehicle buyers get a discount, pay nothing or pay a fee.
However, the Vehicle Industry Association (VIA) said the problems persisted and it could no longer support the program.
Its thousands of member car dealerships had been complicit in the government “stealing money from consumers” due to incorrect data, chief executive David Vinsen said.
Dealers have spoken of many cases of cars posting fees of hundreds of dollars, up to $2800, when it should be a zero fee or a discount.
Removing VIA’s support won’t make any functional difference to how the cars are sold or what discount stickers they wear, Vinsen said.
The association supported the aim and intent of the regime, but not the mechanism.
He would continue to work with Waka Kotahi to try to fix things, he said.
It had been using its extensive database of Japanese used cars to help authorities for months in the run-up to and since the program was rolled out in April this year.
Documents show that the NZTA and the Department for Transport knew at the start that the emissions data they had was poor and that they had tried to plug the holes.
VIA was also withdrawing its support for the clean car standard which will come into effect next year. The standard would introduce fees that apply to dealers and importers, in addition to the rewards and penalties of the motorist rebate system.
Transport Minister Michael Wood has been contacted for comment.