NVES change could trigger EV “discount season”

Changes to Australia’s new CO2 reduction scheme could result in an annual “discount season” of cheaper prices for electric vehicle buyers at the end of each year.

The New Vehicle Efficiency Standard (NVES) is currently structured to base its emissions count around how many vehicles a brand imports to Australia.

But the federal government has now announced it’s planning to measure emissions based on the number of vehicles sold.

In the same way ute sales climb at the end of each financial year to exploit tax stimulus, an industry expert has predicted EV sales could be supercharged at the end of each calendar year by discounts as brands strive to lower their emissions tally.

The government is working on the change so auto manufacturers don’t import excessive numbers of low- and zero-emission vehicles and foist them on dealers to meet CO2 limits, thereby avoiding stiff fines applied under the standard.

In that scenario, dealers have to absorb the cost of high-priced, low-demand vehicles sitting on their grass.

“Bringing this work forward now, ahead of a fulsome review in 2026, signals the Government’s determination to ensure Australian automotive businesses are not adversely impacted by the business practices of international car companies,” small business minister Julie Collins said in a statement.

Under the expected change, auto brands would not only have to import low- and zero- emission vehicles to meet their CO2 emissions targets, but sell them as well.

Fines can be up to $100 per gram per kilometre of CO2 for each vehicle sold over the target, making it imperative for a brands to get as close to their targets as possible.

And this is where the discount season theory comes into play.

With the NVES emissions compliance point being December 31 each year, it would inevitably mean some brands would have to sell an increased number of low- and zero-emission vehicles as the deadline looms to avoid fines.

“What I think will happen for quite a few brands is, as we approach the compliance point, they will push low and zero emissions vehicles harder and faster,” Motor Trades Association of Australia (MTAA) CEO Matthew Hobbs predicted.

“We may even find there is a new discount season at the end of the year.”

The MTAA has been among the automotive lobby groups pushing for the change from import to sale because of the pressure the current structure can place on dealers.

“Emissions should be counted when the vehicle is sold,” Hobbs said.

“By looking to count the impact of CO2 at the point of sale, the Government will remove the temptation for car companies to push vehicles onto dealers, no matter the demand of consumers, just to hit a compliance number for a particular year.

“Ultimately [this change] just strengthens the incentive for the OEMs (auto brands) to not just get low-emission vehicles into the country, but get them into consumer’s hands.”

A theoretical example of this could be Ford, which relies on diesel-powered Ranger and Everest for the bulk of its sales.

It could offer the Mustang Mach-E EV at dramatically discounted prices in the last few months of the year to comply with its CO2 targets, or reduce the amount of credits it would have to purchase from other brands that have come in under their targets.

The change could stimulate demand for EVs – sales of which have slowed in 2024 and are going backward in 2025 – and PHEVs – which are growing strongly off a low base – or just mean a higher percentage of sales are concentrated in the final months of the year as people wait for the best deals to pop up.

So, that’s the good news if you’re keen to get into an EV and baulking at the price.

The bad news is the change of emissions registration point won’t come for the first compliance period, which starts July 1 and finishes December 31, 2025.

The NVES sales measuring mechanism would more likely be in-place for the compliance period ending December 2026.

Meanwhile, the lobby group representing automotive brands, the Federal Chamber of Automotive Industries, was unenthusiastic about the reporting change.

“Since the legislation for NVES was rushed through Parliament in May last year, the industry has been working in partnership with the government to prepare for the implementation of the scheme,” FCAI chief executive Tony Weber said.

“Right now, we believe that it is too early to be contemplating changes to the administration of the NVES before it has even started.

“Any changes like this should be the focus of the review, which will commence in 2026, and done in partnership between the government and industry.”

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