Car industry goes to war over upcoming emissions legislation

The knives have come out in the Australian auto industry as electric vehicle proponents mock predictions of significant new-vehicle price hikes by some of the country’s largest auto brands and forecast running-cost savings almost as big as a result of the federal government’s proposed 2025 New Vehicle Efficiency Standard (NVES).

As the deadline for submissions draws near ahead of an expected decision by the federal government in July, industry factions continue to lobby for one of three options – and variations thereof – to accelerate the uptake of low- and zero-emissions vehicles and away from traditional CO2-emitting vehicles.

The NVES will set steadily decreasing CO2 emissions limits for new vehicles each year between 2025 and 2029. Car-makers with corporate average fleet emissions below the limits will gain credits, while those who exceed them will have to either buy credits from other brands or pay fines.

All three options include heavy 4x4s such as the Toyota LandCruiser within the passenger vehicle segment, which will have a lower limit than the light commercial vehicle (LCV) segment.

Option A is favoured by some of the industry’s biggest auto brands because it would be the slowest and steadiest start to the new-vehicle CO2 reduction process by including ‘Super Credits’ to aid the transition for brands to electrification, while option C would be the most radical.

The government and some brands including Hyundai prefer Option B, which would see ‘headline target’ average emissions for passenger vehicles and SUVs start at 141 grams of CO2 per kilometre (g/km) in 2025 and drop by 12.2 per cent per annum on average to 58g/km by 2029.

In the same period, LCVs would drop by 12.4 per cent per annum on average, from 199 to 81g/km, which would be difficult for diesel ute makers like Toyota, Ford and Isuzu (and full-size US pick-up brands like RAM and Chevrolet),which will also need to comply with the separate Euro 6d emissions standard in 2025.

Overall, new-vehicle emissions would drop by 61 per cent between 2024 and 2029 under Option B, which is not supported by the Federal Chamber of Automotive Industries (FCAI) or the Australian Automotive Dealer Association (AADA), while the Motor Trades Association of Australia (MTAA) has called for common sense to ensure Australians continue to have access to fit-for-purpose new vehicles.

The FCAI has come under increasingly heavy fire from various EV advocates and climate groups this week for releasing estimates that claim most of Australia’s best-selling models will be slapped with thousands of dollars of penalties as of next year, amounting to more than $13,000 in the case of the LandCruiser and upwards of $6000 for the Ford Ranger – all of which would supposedly be passed onto consumers.

The FCAI said other potential increases for top-selling models include $5750 for the Hyundai Tucson, $4460 for the Mazda CX-5, $2690 for the Toyota HiLux and $2720 for the Toyota RAV4.

It added that these price hikes would apply only in 2025, before compounding in subsequent years and eventually topping $25,000 in the case LandCruiser in 2029.

However, these figures are based on the current versions of each model and don’t take into account any future efficiency improvements – or the FCAI’s own 2022 modelling based on the industry’s current voluntary CO2 emissions targets.

Of course, the outliers in all this are electric vehicles and the FCAI has forecast a $15,390 credit for Australia’s top-selling EV, the Tesla Model Y.

But credits are an unknown factor because while vehicles like the LandCruiser would currently attract a penalty for its emissions, those penalties can be offset by the credits awarded to Toyota models that undercut their emissions limit, theoretically offsetting or mitigating any major price increases.

Later this week the Electric Vehicle Council (EVC) called for the FCAI to withdraw its “discredited” claims of price hikes due to Australia’s first national new-vehicle emissions standard.

“Anyone who knows anything about how efficiency standards actually work across the globe would recognise the FCAI’s public claims about price are not honest or credible,” EVC chief executive Behyad Jafari said.

“The idea that any model would shoot up by any significant amount can only be supported if you base you modelling on completely unrealistic assumptions, which is exactly what we now see the FCAI has been doing.

“The FCAI knows that New Vehicle Efficiency Standards work by nudging car makers to change their behaviour – both by selling more efficient version of their existing combustion engine models and by offering consumers a more attractive range of EVs and plug-in hybrids.

“This idea that car makers would suddenly jack up prices by huge amounts is pure fantasy, and anyone objective will tell you this.”

Jafari went on to state the NVES would save Aussies thousands of dollars at the fuel bowser by giving them access to increasingly fuel-efficient vehicles. The government estimates NVES Option B would save Australians $1000 in annual running costs.

The Climate Council, which has publicly backed the sale of only zero-emissions new vehicles by 2035, also weighed in with average fuel expenditure figures comparing Australia to other countries.

According to the data, motorists – on average – use almost twice as much ($1460 per annum) fuel as Europeans ($740) and roughly 30 per cent more than Americans and Chinese, given Australia’s average passenger vehicle fuel consumption is 6.9L100km compared to 3.5L/100km and 4.2L/100km respectively. It’s a similar situation with light commercials, albeit with higher consumption figures.

“An immediate benefit of making cars more efficient is that the average new car will consume less fuel to drive the same distance, lowering fuel bills and helping Australians tackle cost of living pressures,” Climate Councillor and economist Nicki Hutley said.

“An effective New Vehicle Efficiency Standard will bring us up to speed with the majority of the world that already has similar standards in place.”

Related: Feuding NVES factions to meet in Canberra today
Related: Consumers must come first in fuel-efficiency debate
Related: Australian government announces tough new fuel-efficiency standard

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