Coalition pledges to scrap NVES

The Coalition has pledged to repeal Australia’s New Vehicle Efficiency Standard if elected, drawing warnings from automotive and environmental groups about the impacts such a reversal could cause.

The federal opposition has confirmed it would repeal the law underpinning Australia’s new-car emissions standard as part of a wider overhaul of climate and energy policy.

Shadow minister for energy and emissions reduction Dan Tehan said the Coalition would introduce its Scrap Net Zero (Cheaper Energy) Bill within 30 days of taking office. His official statement explicitly calls for the repeal of the New Vehicle Efficiency Standard Act 2024, which he said had affected vehicle choice and pricing.

In a separate statement to his electorate, Tehan called the NVES a “family car and ute tax”. The Coalition has not quantified how much it expects the repeal to reduce showroom prices.

The NVES sets average CO2 emissions targets for the new passenger cars and light commercial vehicles each supplier brings to Australia.

Suppliers can earn or trade credits to meet those targets, while unresolved shortfalls can attract financial penalties. The standard does not ban the sale of any individual petrol or diesel vehicle.

Its future has become a sharper question as Australians buy more vehicles with plugs.

The Australian Automobile Association recorded 69,414 battery-electric vehicle sales and 34,937 plug-in hybrid sales in the June quarter of 2026. Together, they made up 31.61 per cent of new light-vehicle sales, up from 19.07 per cent in the March quarter.

Battery-electric vehicle sales more than doubled between the two quarters.

Higher fuel prices have contributed to buyer interest this year, but the NVES has also encouraged suppliers to expand their lower-emission ranges.

Reaction within the car industry to axing the NVES has not been supportive.

“Australia’s automotive industry needs stable, predictable and workable policy settings because decisions about which vehicles are developed and supplied to this market are made years in advance,” an FCAI spokesperson told The Australian.

Climate Council chief executive Amanda McKenzie called the wider energy package a “brain fart of a policy” and argued that removing the NVES would limit access to efficient vehicles and increase reliance on imported oil. Farmers for Climate Action said repeal could reduce future choices for farmers, including electric utes.

Independent Kooyong MP Monique Ryan called the Coalition’s broader plan “dumb, dangerous and desperate”, saying households had already invested in electric vehicles and other technologies to lower their running costs.

Tehan’s bill would also repeal the legislated net-zero target, remove the Safeguard Mechanism for major industrial emitters, revoke four offshore wind zones and seek to lift legislative prohibitions on nuclear energy. He described the plan as taking “a chainsaw” to Labor’s energy policies.

The NVES remains in force, and a review of the scheme is underway. Repeal would require the Coalition to win government and pass legislation. At the moment, the opposition is struggling in the opinion polls.

The first potential penalties relating to vehicles supplied in 2025 are scheduled to be determined in February 2028, after suppliers have had time to balance their accounts.

Join the conversation at our Facebook page
Or email us at editor@carsales.com.au