The New Vehicle Efficiency Standard has officially now been in place for its first month but the jury is still out on its impact.
Measurement of emissions from each OEM’s fleet of new vehicles began on July 1, with penalties set to accumulate and potentially reach totals of $2.9 billion by 2029.
The wave of expected changes this will produce for manufacturers, repairers and consumers has begun in some areas but in others, the overall movement is slow toward the governments objectives.
The government’s key purpose with the NVES is to accelerate the transition of the Australian car parc toward lower emissions vehicles. So far, some of the key barriers to EV uptake have lowered, such as choice and price but in other areas of change there are still many unknowns.
For repairers, the transition of the car parc is expected to bring on a wave of compliance changes, with demand for EV and high-voltage training likely to be in increasing demand.
But support for this training and compliance, along with access for regional businesses are several points of contention still to be resolved according to leading industry bodies.
The scheme has also caused debate amongst industry insiders who have differing views over how effective the regulations will be, how quickly it can reach its objectives and how ready the aftermarket is to deal with the change.
Purpose and impact
In an attempt to keep up with other nations in tackling carbon emissions, the federal government introduced the scheme to accelerate the sales of low-emissions vehicles.
According to a report in March 2024, the Federal Government claimed that Australia (along with Russia) was one of the only advanced economies in the world that did not have an NVES or something similar.
In Australia, EV sales, including PHEVs, have made up more than 12 per cent of new car sales in the first half of 2025, increasing from 9.6 per cent in the same period last year according to the Electric Vehicle Council.
These figures however do not show that the growth of pure EV sales has slowed since a highpoint in 2024 and that they still make up only two per cent of the overall car parc.
But on the positive side, over 160 EV models were expected to be launched in Australia before 2030 an MTAA submission on the NVES says and this would in turn lead to cheaper and more accessible models.
The FCAI has reported that there are already more than a hundred models available, most coming onto the market in Australia since the NVES was first announced in early 2024.
Cost benefits
The influx of Chinese brands has meant a price war in the EV space with the likes of BYD, GWM and MG offering models comparable to ICE vehicles in price, one of the EVs initial strong dissuaders.
According to the RACV the BYD Dolphin can be brought for a s little as $32,000 and this is hotly followed by the GWM Ora and the MG4 all priced close to half what EV’s cost three years ago.
Geely EX5 and Chery Omoda E5 are also competing in the space and even Tesla, the most popular brand is reported to be lowering its prices with a new variant on the Model
Running costs
One of the government’s key NVES selling points was that switching to electric would save motorists thousands of dollars every year in running costs.
Yet an NRMA report in late 2024 found that the general public remains largely ignorant of these benefits.
The report found for those unfamiliar with EVs, only 30 per cent view EVs as the most cost-effective option, and just 42 per cent see them as the most environmentally friendly choice.
The report found for Australians not considering an electric vehicle for their next car, among their primary concerns are driving range (54 per cent) and charging times (53 per cent).
Range and charging infrastructure have been key factors in driving the massive surge in hybrid sales in 2024 and 25, as many consumers see them as a transitional technology.
Impacts on OEMS
One advantage for these majority EV makers is they can also sell credits under the new NVES scheme to other OEMs whose fleets are more polluting.
In a presentation made in June 2024, the MTAA suggested that six brands would need to make significant changes to meet the 2025 and 2029 targets, these include the makers of Australia’s most popular cars, the twin cab utes.
If the MTAAs predictions are correct, low emission vehicle manufacturers are most likely to benefit.
The scheme opens the door for low-emission vehicle companies to not only bolster their car sales but generate serious revenue by selling carbon credits.
For example, in 2024, EV giant Tesla’s profit continued to drop. However, their total carbon credit revenue soared to $2.76 billion, a 54 per cent increase from 2023.
This is part of a pattern seen around the globe as legacy automakers have started to rely heavily on purchasing carbon credits, as they struggle to meet regulatory requirements.
In the EU, strict vehicle emission targets have meant that several car manufacturers within the region need Tesla’s carbon credits to meet the targets.
Europe’s 2035 target to no longer sell vehicles that emit carbon dioxide has meant that major car companies like Toyota, Ford, Mazda, and Subaru buy the credits to offset their own emissions and avoid regulatory fines.
A similar event could occur at home, when the Australian markets react to the NVES.
Repairers
The Motor Trade Association of Australia expects the nations car parc to be affected by the range of electric vehicles expanding and has flagged both EV charging infrastructure and the aftermarket chain of servicers and repairers as some of the areas that will need to keep up with demand.
Interim Executive Director for the MTAA Rod Camm explained that “The industry will need to evaluate several key areas as this transition unfolds.”
“Staying informed and keeping abreast of market changes will be essential, as this technology is evolving rapidly and businesses need to understand what’s coming.”
The lead aftermarket body the AAAA, has also been a vocal advocate for the government to focus more keenly on the whole of EV life experience and invest in training and equipment support for repairers, mechanical and collision, to ensure EV owners are not faced with inordinate delays.
While the federal government has recognised an EV technician as a distinct trade and some financial support is available for workshops, including for EV chargers under the ARENA scheme, these industry bodies argue more needs to be done.
Transition
One issue that has caused controversy is training accreditation and whether governments need to set training certification or the industry can look after these levels by itself.
The NSW government recently proposed licensing reforms that would require technicians to complete targeted training before working with any high-voltage batteries.
Camm said the proposal highlights, “the importance of collaboration between government and industry as we navigate the transition to electric vehicles.”
To prepare for the influx of new EVs, the Motor Traders’ association of NSW has trained over 800 tradespeople in EV systems and currently supports more than 2,200 apprentices in the industry.
MTA NSW CEO Stavros Yallouridis said the mandate is a “targeted, practical policy aimed at protecting workers and the public.”
Additionally, the MTAA noted the possibility of car companies implementing new tech, powertrains, and models to meet their carbon targets, something that repairers will need to adapt to.
Small and regional workshops will have the greatest difficulty adapting to this, Camm believes.
He says investing in new equipment, training, tools and administrative strategies presents a unique challenge for regional workshops.
“Until we see greater volumes of EVs sold in regional areas, this necessary investment may be difficult to justify for many regional businesses.
“This highlights the importance of considering targeted support for rural and regional workshops during this transition period.”
Cost fallout and benefits
In the immediate fallout from the implementation of the NVES, some car models that produce high emissions, have risen sharply in price.
The prices of the Ford Mustang have risen by nearly $5000 with the basic four-cylinder turbo model starting at $71,990, a Ford spokesperson explained.
Other car makers such as RAM, Bentley and Aston Martin were also expected to raise prices.
Household names in Australia like Toyota, who rely on the Australian markets to sell thousands of Utes and SUVs, will attempt to avoid price hikes by pushing out their hybrid vehicles and balancing the overall emissions of their fleets.
Other companies like BYD, Volvo and Tesla could also continue to lower their prices as they gain revenue from selling carbon credits.
The MTAA predicted Jaguar, who are now fully electric, could drop their prices by $5,945.
Mixed reactions
However, just a week after emissions began being regulated, the scheme’s aim to boost the demand of EVs and hybrids, isn’t visible in the market, and Mitsubishi Australia’s CEO, Shaun Westcott, has expressed doubts that they ever will be.
“I think there’s a degree of naivety that thinks that if you just penalise us…that somehow that’s miraculously going to change the market,” he said.
The FCAI has also continually argued against what it believes are unrealistic targets of the scheme and highlighted obstacles that are preventing the public from buying EV models.
FCAI chief executive Tony Weber conceded that there has been an increase in models, but argued price, charging infrastructure and rising electrical costs will continue to deter buyers.
“Despite the broad range of low and zero-emission vehicles, [they] account for just 7 per cent of new vehicle sales, well below earlier predictions.”
Electric Vehicle Council Chief Executive Julie Delvecchio looks forward to manufacturers bringing their most efficient cars to Australia, and argues it shows the scheme is working.
“For the NVES to succeed, this next step is crucial because it incentivises manufacturers to bring their best cars forward,” Delvecchio said.
“No matter your lifestyle, there’s an EV to suit every Australian, with some costing just over $30,000 drive away.”
As cheaper Chinese brands like BYD and GWM shake up the Australian car market, the former recording its best-ever month for Australian sales in June.
BYD had a 368 per cent increase compared to their June sales last year and was the 5th highest selling car brand in the country, across all vehicle types.
As the demand for EVs builds across the country, the automotive workforce must follow suit.
Ultimately, with policy, production and pricing all evolving at pace, Australia’s repair industry is bracing for disruption, and searching for solutions to keep pace with the change.