The Australian government’s New Vehicle Efficiency Standard (NVES), introduced in March, has been met with optimism by the Climate Council and electric vehicle advocates. This legislation aims to incentivize car manufacturers to create more fuel-efficient vehicles, with the government setting emission targets for light commercial vehicles of 210 grams of CO2 per kilometre by 2025 and 110 grams by 2029. By reducing fuel consumption by 20% of current levels, Australians can save up to $17,000 over their vehicle’s lifespan.
The Climate Council cites a recent poll indicating that 80% of Australians are burdened by high and rising petrol prices, while 70% call for government intervention against climate pollution from cars. This new legislation is expected to reduce CO2 emissions in Australia by 369 million tonnes by 2050 and provide $5 billion in health benefits through reduced air pollution.
The Albanese government has refined the NVES through consultations with stakeholders over the past year, resulting in adjustments such as recategorizing four-wheel drives and modifying emissions standards. The government will also provide a $60 million grant under the Driving the Nation fund to boost EV charging at Australian dealerships.
While some industry leaders argue that the standard is too ambitious, others commend the initiative as a significant step forward for Australia’s automotive sector. Electric Vehicle Council Behyad Jafari and Ethinvest Philanthropy Director Blair Palese both support the legislation, with Jafari stating that the standards are robust and transparent, providing a strong foundation for future development.
The NVES is set to go into effect on January 1 next year, with the goal of catching up to other markets like the U.S. in terms of emissions reduction by 2028. Tesla and Polestar have both withdrawn from the Federal Chamber of Automotive Industries in response to the lobby group’s claims that the NVES will lead to higher vehicle prices.