The Government's headline policy to cut the price of electric vehicles by up to $8000 has stalled in first gear after NZ First ministers halted it.

The policy had two parts: a Clean Car Discount, or "feebate" which would subsidise the cost of cleaner vehicles by making polluting vehicles cost more and a Clean Car Standard, which was designed to encourage importers to import cars with better emissions standards.

Green co-leader James Shaw said if NZ First ultimately decided to block the policy, his party would take it to the election.

That now looks likely.

READ MORE:

* James Shaw won the battle on climate change, not the war

* New Zealand a leader in dealing with climate change but 'by no means perfect'

* Advertising watchdog rules National Party ad misleading

It is understood this measure was weighed up by the NZ First caucus and it decided such a policy needed to go to the electorate.

"We can confirm NZ First are holding up the rollout of policy that would mean cheaper electric and hybrid cars for New Zealanders," Shaw said.

The policy was announced by Green Party Associate Transport Minister Julie Anne Genter last July and went out for consultation, which finished in August. Little has been heard on the policy since then.

Shaw said it was "something the Government is continuing work on".

"Moving to clean, green transport is vital if we are going to ensure a safe planet for our kids and grandkids," Shaw said.

"It is a common sense measure and if NZ First ultimately decide to block it this term we will take it to the election," he said.

Braden Fastier Associate Minister of Transport Julie Anne Genter is in charge of the Government's "feebate" scheme.

During the consultation it came under intense scrutiny from the National Party, which launched an aggressive online ad campaign, labelling the policy a "car tax". Complaints were made against the ads, some of which were upheld by the Advertising Standards Authority.

The policy would make some cars up to $8000 cheaper, while others would be $3000 more expensive. The idea is to add incentives for purchasing cleaner cars, while adding disincentives to purchasing dirtier ones.

It was self-funding. Money from the charges levied on polluting vehicles would be used to pay for the subsidy on cheaper vehicles.

Attacks on the policy criticised the fact that motorists in rural areas who could not purchase subsidised cars would be hit by the additional fee.

NZ First was lobbied by rural industries that it would have a regressive impact.

MARTIN DE RUYTER/Stuff Electric vehicle charging station at the Millers Acre Car Park in Nelson.

National MP Chris Bishop described the impasse as "an utter humiliation of Julie Anne Genter and the Greens".

"Despite all the rhetoric this Government has exactly the same policy when it comes to EVs as the previous Government," he said.

Bishop said there was more that could be done to decarbonise the public transport fleet.

"It's good the Government is seeing sense on the car tax which would have a negative effect on emissions and would have a punitive effect people who can't make the switch," he said.

It's been a rough few months for the Government's low-emissions transport agenda. Its plan to build a light rail line in Auckland has been dogged by delays. Stuff this week revealed there were just 16 electric buses doing public transport, despite a push to decarbonise the sector.

They represent just 0.67 per cent of the roughly 2300 buses used for public transport in New Zealand.

The "feebate" was broadly supported by the auto industry. The Motor Industry Association said the feebate was "the most powerful policy available to this Government to influence car purchase decisions", but criticised the Clean Car Standard.

Grieg Epps of the MTA agreed. His organisation had concerns there would not be enough low-emissions vehicles in the Japanese market for New Zealand to import under the Clean Car Standard.