A scheme to cut the emissions of cars and encourage electric vehicle uptake will be substantially wound back under a Coalition government, with Opposition Leader Peter Dutton dubbing it an unfair car tax.
The New Vehicle Efficiency Standard (NVES) will take force in July after being legislated at the request of several automotive companies in 2024.
It sets an emissions ceiling on the total car sales of each automaker, with heavy penalties for those who exceed it.
The Coalition will dump those penalties — keeping the framework of the efficiency standards, but not penalising breaches.
It argues car manufacturers will continue to offer cleaner cars in the Australian market, but costs will not increase for consumers.
The industry had asked to be regulated, saying Australia was alone with Russia in not having a fuel efficiency law — and the lack of one was making it hard to get hold of in-demand electric vehicles or other more fuel-efficient cars.
However, with United States President Donald Trump’s tariffs — including a substantial tariff on “foreign automobiles” — the sector is in crisis and some car makers have expressed fears when the NVES takes effect it will compound their uncertainty.
Industry insiders told the ABC last week that 4×2 variants of the Ford Everest and Mazda M-UX were among ranges due to be pulled from July — while other makers considered baking penalties into their business models and passing on some of that fine to consumers.
The opposition leader claimed industry estimates showed some of the heaviest polluting cars could raise their prices by thousands of dollars in the long run.
“This is a tax on families who need a reliable car and small businesses trying to grow. Instead of making life easier, Labor is making it harder and more expensive,” Mr Dutton said.
“A Coalition government will scrap this tax, so Australians can keep more of their hard-earned money when purchasing a new car.”
Peter Dutton has dubbed Labor’s fuel efficiency standards a “tax” on families.
Labor has denied its NVES will substantially affect prices, pointing to overseas markets with similar schemes that have remained competitive on price.
The industry has challenged that, suggesting Australia’s late adoption means it is acting harder and faster to reach similar fuel efficiency goals.
However, while there is great uncertainty in the global car market under the cloud of Mr Trump’s tariffs, the penalties and credits accrued under NVES don’t become payable before 2028.
Motoring data insights agency Blue Flag has forecast the industry could be hit with as much as $2.7 billion in penalties by that date, though those who accrue credits would be set to benefit under the cap-and-trade scheme.
The Coalition campaigned on Labor’s planned fuel efficiency standards at previous elections, calling it a tax on utes because it dis-incentivised less fuel-efficient cars, and saying it “threatened to end the weekend”.
The party says it will work with industry to bring the cleanest cars on the market to Australia, without “punishing” those who cannot afford them.
Shadow energy minister Ted O’Brien said the party will retain the vehicle efficiency standard without penalties, with the aim of ensuring cleaner cars continue to be brought to the Australian market.
“The Coalition backs lower emitting vehicles because more fuel-efficient cars save Aussies money every time they fill up — but we won’t back Labor’s car tax that drives prices through the roof,” he said.
“Labor has got the balance wrong by imposing penalties that will be passed on to Australian families and small businesses.”
