Nissan, GWM highlighted among NVES strugglers

Many of Australia’s most popular automotive brands will struggle to hit CO2 emissions limits under the New Vehicle Efficiency Standard (NVES).

And members of the local auto industry could cop fines as high as $2.8 billion in 2029 if they do fail to adapt by offering cleaner vehicles.

These are both findings of a study into NVES impacts by automotive intelligence firm Blue Flag, published by the Motor Trades Association of Australia (MTAA) as part of its pre-Federal Budget submission.

The NVES came into force on January 1 and is designed to drive down CO2 greenhouse gas emissions and encourage the uptake of electric vehicles via the introduction of increasingly stringent limits.

The first fines under the scheme will be levied and payable in 2028.

Read our in-depth explainer for more on the concept, mechanics and implications of the NVES.

Commercial vehicles such as heavy-duty diesel SUVs and utes – or Level 2 under the NVES structure – from GWM and Nissan are both judged unlikely to meet the initial 2025 NVES target based on current forecasting.

In 2029, under far tougher emissions levels, Ford, Isuzu, Mazda, Mitsubishi and Toyota are major brands that will join Nissan and GWM as unlikely to hit Level 2 targets.

While no brand is judged unlikely to meet 2025 passenger vehicle (cars and light-duty SUVs) – or Level 1 – targets, that changes dramatically in 2029.

Then Blue Flag states Ford, Hyundai, GWM, Kia, Nissan, Mazda and Mitsubishi will all be unlikely to hit their emissions targets.

Bue Flag also rated brands that could possibly meet 2025 and 2029 Level 1 and 2 targets with reasonable changes and those that were highly likely to do so.

No brand was rated highly likely to hit the 2029 Level 1 target and only Hyundai was rated highly likely to hit the Level 2 target.

The findings of the Blue Flag study are incredibly important because a failure to achieve CO2 emissions targets across their line-ups results in brands incurring fines or the cost of buying credits from EV makers to avoid them.

Either cost would result in vehicle price rises and potentially drive brands out of the Aussie market if profitability is judged impossible.

The MTAA has published the data in its role as a car dealer advocate, urging the federal government to:

• Increase protection for dealers through the franchising code of conduct
• Review NVES targets more frequently and be prepared to adjust them in response to changing international trends
• Change the point of compliance for vehicles from when they are imported to when they are sold

Among many other recommendations, the MTAA also called for the extension of the Fringe Benefits Tax exemption for plug-in hybrid vehicles that ends April 1 and the abolition or amendment of the luxury car tax.

The MTAA has stressed the findings of the Blue Flag study are based on publicly available information.

“The relative rating of each brand is a direct result of the brands’ global competitiveness and future product trajectory and is no way a commentary on the current Australian operations or products,” the submission states.

“Fundamentally decisions on Australian operations, the products and strategy are made in headquarters, and Australia is a fraction of volume and profitability for these multinational companies and therefore prioritised less than other markets.

“As competition intensifies, traditional brands will face pressure to adapt, with implications for sales, profitability, and dealership sustainability.”

The MTAA submission highlighted Nissan as a case where dealer sustainability will be particularly under pressure.

“In 2024 [Nissan] sold an average of 242 vehicles per dealership based on its current dealership footprint,” the submission states.

“This figure is expected to decline further as market competition increases, leading to even greater challenges for Nissan’s dealer network.

“As more brands enter the Australian market, the fight for consumer attention will only accelerate fragmentation within the dealership landscape unless the overseas headquarters can deliver competitive product at a competitive price for the Australian market – time will tell.”

Nissan is highlighted at a time when it is fighting for survival globally after a failed merger with Honda and is at the same time trying to secure its long-term Australian future via a new strategy plan.

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