Federal Opposition leader Peter Dutton has committed to axing the government’s New Vehicle Efficiency Standard (NVES) penalties for carmakers if elected next month.
As previously reported, The Australian had received word from Opposition sources that, if elected, the Coalition would abolish the fines, which has now been confirmed by Mr Dutton.
“We will abolish Labor’s tax on family cars and utes. Saving you thousands when buying a new car,” Mr Dutton wrote on social media, referring to the scheme as a tax as he has done in the past.
“Labor’s new car and ute tax will hit families and small businesses with thousands in extra costs.
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“A Toyota RAV4 – the most popular family SUV – could cost up to $9700 more under Labor’s tax. And for tradies and small businesses, a Ford Ranger could jump by as much as $14,400.
“We will scrap this tax—so Australians can keep more of their hard-earned money when buying a new car.”
Mr Dutton has long been critical of the NVES.
While the NVES came into effect on January 1, 2025, carmakers won’t accrue penalties for exceeding CO2 targets until July 1, 2025.
All new passenger and light commercial vehicles sold with a mass of less than 4.5 tonnes are covered under the scheme.
Under the legislation as it stands, if carmakers exceed an average carbon emissions target on the vehicles they sell each year, they will be penalised $100 for every gram per kilometre CO2 for every vehicle which exceeds the target.
For 2025, the mandate for passenger cars (Type 1) is 141g/km or less of CO2, with light commercial vehicles and heavy-duty SUVs (Type 2) set at 210g/km.
These CO2 caps will reduce every year until 2029, when they will be much lower at 58 and 110g/km respectively, forcing manufacturers to sell increasingly efficient vehicles.
| Year | Type 1 limit (g/km) | Type 2 limit (g/km) |
|---|---|---|
| 2025 | 141 | 210 |
| 2026 | 117 | 180 |
| 2027 | 92 | 150 |
| 2028 | 68 | 122 |
| 2029 | 58 | 110 |
Brands can also earn emissions ‘credits’ by beating their fleet-wide targets, which can then be used in a subsequent year to help meet tighter CO2 targets, or sold on to other brands to help them reach their emissions targets.
While Mr Dutton claims the price of a Toyota RAV4 could rise by up to $9700, when the NVES penalties come into effect the hybrid SUV will be well below the emissions limit.
According to the government’s Green Vehicle Guide, a Toyota RAV4 Edge emits 110g/km, meaning it’ll be safely under the first- and second-year emission limits.
When the limits meet their most stringent levels in 2029, the RAV4 will be 52g/km above the target, resulting in a $5200 penalty.
However, this also assumes the vehicles’ powertrain won’t be made more efficient in that time.
The Ford Ranger meanwhile only comes in below the limit for its vehicle type when powered by a four-cylinder turbo-diesel engine, as the V6 diesel and V6 performance-focused Raptor emit up to 222g/km and 262g/km respectively.
In the case of the V6 turbo-diesel Ranger, it’ll be fined $2200 in the first year, and $11,200 in 2029.
Again, this assumes Ford won’t introduce lower-emitting engines, while the upcoming plug-in hybrid (PHEV) Ranger will help reduce Ford’s overall fleet emissions.
It’s worth noting that while penalties are yet to come into effect, no carmaker has increased the prices of their vehicles and directly attributed that to the emissions regulations – though a couple of brands, including Ford, have axed variants of vehicles in response to the scheme.
Multiple models have incurred price increases in recent years, mostly due to the increased cost of production or higher demand.
Last month, the Australian Government announced it’s prioritising work for vehicles’ emissions to be counted at the point of sale rather than when they’re imported, with a review due in 2026.
This means instead of carmakers forcing dealers to stockpile lower-emissions vehicles which may not sell in great volumes, they can continue to sell vehicles based on consumer demand – resulting in more predictable costs for franchises.
