Tesla splits from top industry group as tensions over new emissions standard heat up

Tesla has announced it plans to exit Australia’s peak auto industry body as tensions rise over the imminent introduction of the nation’s first new-vehicle efficiency standard – and more brands are likely to follow suit.

The EV pioneer – now the eighth best-selling brand in Australia and by far the biggest seller of electric vehicles in this market – this morning sent a scathing letter to the Federal Chamber of Automotive Industries (FCAI) announcing its intention to quit the lobby group that has been campaigning against the government’s proposed New Vehicle Efficiency Standards (NVES).

Tesla says it plans to cease being a member of the FCAI at the end of the 2023/2024 financial year.

Tesla also says it has reported some of the FCAI’s recent conduct to the federal government’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), over concerns it was trying to “foreshadow or coordinate whether and how competitor brands implement price changes in response to environmental regulations such as the NVES”.

In the letter sent to FCAI chief Tony Weber and other directors, Tesla claims the FCAI distributed “false and misleading public comments… regarding claimed price impacts on Tesla and other vehicles” due to the proposed efficiency standard that is still to pass parliament but calls on car-makers to reduce their fleet-average CO2 emissions by more than 60 per cent by 2029.

“Over the past three weeks, Tesla considers that the FCAI has repeatedly made claims that are demonstrably false,” Tesla said in its email to the FCAI.

“Tesla is concerned that the FCAI has engaged in behaviours that are likely to mislead or deceive Australian consumers. Tesla is also concerned that it is inappropriate for the FCAI to foreshadow or coordinate whether and how competitor brands implement price changes in response to environmental regulations such as the NVES.”

Tesla is calling on the FCAI to “issue timely public corrections to these false claims” and “cease the public dissemination of misleading or deceptive information regarding the potential impact of NVES”.

Tesla is also demanding that the FCAI “cease any commentary and meetings in which the FCAI foreshadow or coordinate whether and how competitor companies will change prices or supply in response to NVES”.

Tesla’s letter to the FCAI detailed its concerns, including estimated pricing graphics that showed the price of a new Tesla could reduce by more than $15,000 under the NVES.

“This is simply untrue,” said the Tesla letter, which wasn’t signed by anyone but simply sent by Tesla.

“These figures are falsehoods, produced without Tesla’s knowledge or approval.”

Tesla’s move also prompted the CEO of the Electric Vehicle Council, Behyad Jafari, to criticise the FCAI for “spreading misinformation” and using “completely unrealistic assumptions”.

“Either the claims of price increases are entirely made up, or FCAI members have a very serious question to answer as to how that information came to be known by their industry body,” said Jafari.

The Tesla letter outlines why it believes the FCAI comments are misleading and false in detail, pointing to reports across major news outlets that forecasts utes and four-wheel drives increasing in price and EVs getting cheaper.

In response, the FCAI today issued the following statement to carsales:

“Tesla has today resigned from the Federal Chamber of Automotive Industries (FCAI).

“FCAI must act in the interests of the Australian automotive industry and Australian car buyers. FCAI and its members represent more than 50 brands and over 350 vehicle models from battery electric vehicles, plugin hybrid and hybrids to petrol and diesel drivetrains. Of those vehicle models, just two are Teslas.

“For more than 10 years we have been calling for an ambitious new vehicle efficiency standard that is right for Australia. It needs to reduce emissions while ensuring low and no emission vehicles are accessible and affordable to all Australians.

“FCAI cannot support a standard that in the short-term might meet the needs and pockets of those at the premium end of the market while potentially hurting businesses and families who may be forced to deal with less choice and higher prices next time they buy a new car.

“The timing, targets and penalties of the Government’s current proposed standard are unprecedented. There needs to be change, but it must be at a rate that the industry and consumers can support.

“The FCAI will continue to work with its members and governments across the country to deliver the world’s best technology in terms of engine performance, safety, environment and connectivity to all Australians.”

While Tesla has been the most outspoken about an intense four weeks of media campaigning by the FCAI, other auto brands are also understood to be less than enamoured with the industry body.

Industry bodies including the MTAA and auto brands like Toyota and Mazda – Australia’s top two auto brands – have been vocal on the challenges of the NVES, with the market leader calling on the efficiency standard to be delayed and saying it would be forced to push up prices.

But others car-makers appear to have, at least to some extent, broken ranks by expressing support for the NVES while calling for minor changes to the proposed Option B that the government wants to introduce (Option A was a lot more lenient, Option C a lot tougher).

Last month Volkswagen and Hyundai released statements supporting the Option B proposal, but calling for some aspects of Option A to be incorporated.

And EV brand Polestar is understood to be one brand reconsidering its membership of the FCAI and Tesla’s decision could also throw a spanner into the reporting of VFACTS sales figures.

As part of their FCAI membership, car-makers supply detailed monthly sales figures and, as a major brand these days, Tesla’s sales are important to the overall numbers and also provide an insight into EV demand.

While Tesla has committed to supplying figures up until June 2024, there’s no word on what happens beyond that.

Industry buzz suggests the government may encourage or support a rival vehicle sales recording system.

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