Toyota, Mazda, Ford face “high difficulty” with new emissions standard
Price increases and job losses inevitable if government goes ahead with unchanged NVES, says MTAAPrice hikes and auto industry job losses will be inevitable as Australia’s biggest new-vehicle brands including the most popular – Toyota, Mazda and Ford – face “high difficulty” in meeting the tough new CO2 limits proposed by the federal government’s New Vehicles Efficiency Standard (NVES).
That’s according to a submission by the Motor Trades Association of Australia (MTAA) as part of the NVES consultation process, which this week called for significant changes to the federal government’s preferred scheme.
In addition, as the national representative body of dealers, repairers, parts distributors and components manufacturers, the MTAA has called for support for the wider automotive industry to compensate for the impact of the scheme.
“MTAA supports a national fuel-efficiency standard to reduce Australia’s transport emissions and enable the sector to make a larger contribution to combatting climate change. For such a standard to succeed, however, we need a just transition,” its submission stated.
In a comment piece he wrote last month for carsales, MTAA CEO Matt Hobbs said the first federal new-vehicle emissions standard must put Australian consumers first.
The NVES will apply to all new passenger and light commercial vehicles and provides car companies with targets for average CO2 emissions per kilometre from new vehicles sold. Its objective is to encourage the sale of zero-emissions vehicles.
Car-makers that record a fleet-wide average CO2 figure below the emissions limit will gain credits, and those that exceed the limit will have to either buy credits from other brands or pay fines.
The government’s NVES impact analysis includes three options but the Labor party backs Option B, which cuts emissions by about 60 per cent between 2025 and 2029. It wants the scheme up and running by January 1, 2025. All responses to the impact analysis had to be submitted by March 4.
But using future-model forecasts from vehicle data analyst Blue Flag, the MTAA has projected many brands will not be able to achieve the steep reduction curve.
“The top three brands (Toyota, Mazda and Ford) are unlikely to meet their 2029 CO2 targets based on their product pipeline. As these brands collectively comprise 33 per cent of sales, this has significant implications for the Australian new car market,” the MTAA submission reported.
“What is certain… is that if an OEM is paying a penalty or buying credits, this will have to be factored into costs and the price of the vehicle will rise.
“Under the Government’s preferred option, we anticipate such price rises will be inevitable.
“These challenges will flow onto the dealer network and likely results in cost imposts on dealers, job losses and potential closure of dealerships across Australia,” the MTAA noted.
As part of its submission, the MTAA rates the ability of current auto brands to achieve Option B targets in four segments across both the passenger and LCV markets in 2025 and 2029.
They are rated red (major changes; high difficulty), yellow (some changes; moderate difficulty) or green (no change needed).
Toyota, Mazda and Ford were rated red on three out of four segments including passenger cars and LCVs in 2029.
Mitsubishi, Nissan, Jeep, Chevrolet and SsangYong all score four reds. Some others, such as Subaru, are only present in the passenger segments and scored reds in 2025 and 2029.
Of the brands represented in all four segments, only BYD and Peugeot get greens across the board. Some others, such as Tesla, are green but only rated in the passenger segments.
The MTAA proposed a series of adjustments to the NVES including moving heavy SUVs from the passenger vehicle to the less stringent LCV category (something market leader Toyota has already called for), the introduction of credit multipliers such as super credits (which Hyundai supports), an adjustment of CO2 reduction targets in line with US EPA policy, and the pooling of credits within larger automotive groups (such as Renault-Nissan-Mitsubishi alliance).
The MTAA also called for carve-outs and exemptions for some vehicles such as those used by rural and regional communities and dealers and military and emergency services, as well as low-volume brands with less than 2000 sales per annum.
It also called for compensation and incentives for dealers impacted by the NVES.
“Incentivising businesses will provide avenues for creating jobs, increasing infrastructure, and providing consumers with greater knowledge and information on ZLEVs (Zero and Low emission Vehicles) to assist in helping motorists make the best-informed choice,” the MTAA stated.
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