The government’s tailpipe emissions scheme has cleared the first hurdle toward becoming a major agent of change in the make-up of Australian vehicles.
The New Vehicle Efficiency standard passed parliament in Canberra this week and means car manufacturers will be billed or credited based on the overall emissions of their new car fleet from July 2025.
This promotes the incentive for them to introduce wider range of more efficient, modern vehicles, including EVs and other low emissions cars and aims to reduce emissions from new passenger vehicles by more than 60 per cent by 2030.
The government has also argued the legislation will save Australians money, up to $1000 per year, at the bowser as they can buy cars that use less fuel.
It’s introduction earlier this year led to significant disputes in the automotive sector about how it would affect the price of traditional large polluting cars which resulted in a compromise in March where large utes were reclassified as light commercial vehicles.
Large utes make up three of the top five most popular new vehicles in Australia.
Motor Trades Association of Australia Chief Executive, Matt Hobbs said the legislation was a major step towards decarbonisation of the transport sector.
“It’s undeniable that the targets outlined in the Bill will present substantial challenges for certain car companies, emphasising the importance of ongoing monitoring and review. It’s also particularly crucial to consider the evolving landscape in the United States and Europe.
“In parallel, while we appreciate the transition support already provided to our sector in the most recent Federal Budget, we recognise that there is still more work to be done. We remain committed to working alongside the Government to secure the necessary support automotive retailers need to adapt in a rapidly changing environment sparked by the advent of electric vehicles.”
Chief Executive of the FCAI Tony Weber reiterated the body’s position that the policy should not restrict the kinds of vehicles Australians wanted at the prices they could afford.
“We recognise the challenges for industry in meeting the ambitious targets and ensuring Australia motorists have access to the vehicles they love and want to drive,” Weber says.
“We are pleased to see the investment of more than $150 million towards NVES implementation in this week’s Budget. It is vitally important that on 1 January 2025 when this policy is enacted, the administration of this scheme operates effectively.
EVC chief executive Behyad Jafari said the landmark decision represented a significant leap forward for Australia in its commitment to a cleaner, more sustainable future.
“This is a historic day. After multiple attempts by different governments, Australia today finally joins the rest of the world,” Jafari says.
“For many years now, we’ve campaigned for Australia to join the US and Europe by introducing vehicle efficiency standards so car makers are incentivised to offer their best and most affordable electric options to Australians.
“This move sends a clear signal to the global automotive industry: Australia now demands the same options in electric cars, vans, and utes that you offer to the US and Europe.
“Australian drivers will benefit from access to a greater choice of vehicles, lower fuel bills, and real cuts to transport emissions. Most Australian drivers are now interested in considering electric options and more choice will naturally drive greater take-up of EVs. Ultimately, these standards will mean all Australian consumers are paying lower fuel bills, breathing cleaner air, and enjoying a greater choice of the latest and greatest in new cars.