The number of light vehicles entering the New Zealand fleet hit a new record last year, with 334,000 cars, vans, SUVs and utes being registered.
There were 4.15 million vehicles on New Zealand road's last year, of which 3.8 million were light vehicles, according to new figures from the Ministry of Transport.
Ministry of Transport deputy chief executive regulatory and data Kirstie Hewlett said the record was a surprise, as public transport has usage has been increasing, particularly in Auckland.
"We're disappointed that car ownership has increased 4.5 per cent... population growth is two per cent so a significant increase when we're hoping that the trend's going the other way," she said.
New Zealand has one of the highest rates of car ownership in the world.
High net migration mirrors the increase in car registrations, the Ministry of Transport report said.
Data is collected from the motor vehicle register from the New Zealand Transport Authority and odometer readings.
"We are seeing more cars registered and less cars deregistered when you look at the total number of cars," Ms Hewlett said.
Another record's also been set - nearly 50 billion kilometres were driven on our roads.
The kilometres travelled per person in cars has increased every year since 2013.
"This is not the direction we want - both for emissions, safety and health benefits for New Zealanders," she said.
She said the Government was investing heavily in public transport but still more needs to be done.
Acting Associate Transport Minister James Shaw said growth in the number of larger light vehicles is undermining benefits from the 10,000 electric vehicles now being used in New Zealand.
"The latest data that we've got suggests that it's getting worse rather than better even though we're getting electric vehicle uptake which is kind of disappointing and illustrates the scale of the challenge ahead of us to turn that around," he said.
He said the Government was investigating increasing fuel efficiency standards, emission standards and incentives for electric vehicles to be an affordable option.
"We know that we've got to stimulate the second hand market because that's where Kiwis get most of their vehicles."
He said while the road to legislative change would be challenging, action is urgently needed.
"There is a real risk in New Zealand that if we don't take action on our fuel emissions we'll become a dumping ground for dirty vehicles from other countries who are busy offloading them in order to make way for their electric vehicle fleets.
Jon Reeves, national coordinator for the Public Transport Users Association, said the figures may show that there isn't sufficient public transport for longer journeys.
While the report showed lower car ownership in Auckland and Wellington, which the Ministry of Transport said was partially due to public transport options in these cities, ownership remained high across the South Island.
"It's not enticing people to get out of their cars into public transport," he said.
Mr Reeves said the association wants the Government to investigate a tax reduction or rebate for people who use public transport.
"This has worked in a lot of places like Switzerland for example.
"So public transport users actually are provided with a financial reason to use buses and trains rather than jumping in a car," he said.