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Waka Kotahi/New Zealand Transport Agency (NZTA) has found almost 200 cases where car dealers pocketed electric vehicle subsidies of up to $7,000 per car, then broke the law by selling them on too quickly.
The dealers signed declarations saying they would keep the cars as demonstration, courtesy or company vehicles for at least three months, but did not comply.
The transport agency has told the car yards - which it has not identified - to pay back the money.
Almost a fifth of government subsidies claimed for electric vehicles during December - the final month of the Clean Car Discount - went to car yards, rather than individual buyers.
Over the life of the scheme, just over 192,000 rebates were paid; 21,000 of them to dealers - a little over a tenth.
Internal advice released to RNZ under the Official Information Act shows the Ministry of Transport told NZTA when the scheme was launched that giving rebates to car dealers who onsold cars quickly was not consistent with Government policy of giving rebates to "consumers".
It would be consistent with policy, however, if dealers signed a declaration saying they would keep the cars themselves for three months. It was not clear why it stipulated a period of three months.
In December, more than 10,000 subsidies were claimed: 1906 to car dealers, compared with 8488 payments to individual purchasers.
Waka Kotahi said the flurry of car yard rebates in that month prompted it to step up compliance monitoring.
Earlier this year, a would-be buyer approached RNZ, saying they had been offered cars in January and February from dealers who told them they had registered the vehicles to themselves - the car yard - in December, in order to claim subsidies before the rebates ended.
At first, the agency said it had received only one complaint of abuse of the scheme.
However, it later emerged that an anonymous complainant had supplied the agency with details of more than 200 vehicles they said were wrongly advertised for sale by car dealers who had claimed rebates themselves, while still within the three-month stand-down period.
The complainant asked the agency to investigate possible breaches covering 231 advertised vehicles across 51 dealers.
It was not clear how many of those alleged breaches were among the vehicles for which Waka Kotahi was now requiring repayment.
Initially, Waka Kotahi/New Zealand Transport Agency (NZTA) looked into the tip-off and told the complainant's representative that staff believed just six of the listings were in breach.
Meanwhile, another complainant who spoke to RNZ after he was offered a car still within the three month, no-resale period has been told his complaint would not result in enforcement action.
NZTA told the man, who did not wish to be named, that the dealer's offer to sell the car to him was a breach of the terms and conditions of the rebate.
But because the dealer never actually sold the car, NZTA gave the dealer a formal warning and did not require it to repay the money, a decision the complainant described as "a total cop out".
In an email to RNZ on the latest enforcement figures, the agency said it could not supply more detail: "It is important that NZTA/Waka Kotahi protects the integrity of its investigations into alleged breaches of the scheme. As such, we cannot comment on the detail of investigations currently underway.
"Where a breach has been identified (ie a vehicle has been sold before the three-month period) a repayment of the rebate is required," it said.
