EV brand urges Australian Government to “stay the course” on new emissions rules

Polestar has taken exception to remarks by the Federal Chamber of Automotive Industries (FCAI) criticising the Australian Government’s New Vehicle Efficiency Standard (NVES).

“Efforts to undermine this legislation will only disadvantage Australians,” said Polestar Australia boss Scott Maynard in a statement issued this morning.

“The NVES was developed to lower vehicle emissions by incentivising carmakers to offer more hybrid, plug-in hybrid, and electric options, and we can clearly see car brands rising to that challenge.

“By the end of the year, the number of plug-in hybrid and electric options for Australian new car buyers will be well over 100.

“Over 85 per cent of the global car market has a fuel efficiency standard in place, which helps deliver improved health outcomes and reduce ownership costs. We must stay the course to see these benefits realised in Australia.”

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The FCAI’s chief executive, Tony Weber, had sounded alarm over a poor start for EV sales this year.

“We are now two months into the Government’s New Vehicle Efficiency Standard, and while the supply of battery electric vehicles has risen dramatically, consumer demand has fallen by 37 per cent this year compared with the first two months of 2024,” said Mr Weber in this week’s VFACTS press release.

“We knew the supply of EVs would increase and there are now 88 models supplied to the Australian market. However, our grave concern has always been the rate of EV adoption and what assumptions the Government had made in its modeling around consumer demand for EVs in the NVES. This modelling remains secret.

“The easy part is to set aspirational targets but without consumers demanding EVs, the NVES will not succeed. It is time for the Government to consider the realities faced by consumers.”

While EV sales were down in the first two months of this year compared to the same period last year, sales of hybrids were up 42.5 per cent and plug-in hybrids (PHEVs) were up by 222.2 per cent.

The decline in EV sales was also largely due to a slump by EV market leader Tesla, whose sales were down 65.6 per cent year-to-date.

Last year, sales of hybrids and PHEVs – which the NVES is also intended to encourage the adoption of – were also up by 76 per cent and 100.2 per cent respectively. EVs were still up, but not by as much with a modest 4.7 per cent increase.

The Australian Government has argued the point of the NVES is to not only reduce CO2 emissions, but to bring greater choice to the local new-car market.

Minister for Climate Change and Energy Chris Bowen, in announcing the scheme last year, said the NVES is “about ensuring Australian families and businesses can choose the latest and most efficient cars and utes, whether they’re petrol and diesel engines, or hybrid, or electric”.

The NVES came into effect on January 1, 2025. Penalties will accrue from July 1, before becoming payable in 2028.

EV brands Polestar and Tesla stand to benefit from the NVES as they can earn credits for beating their fleet-wide CO2 targets, which can then be sold onto other brands.

Both brands had a dust-up with the FCAI last year, which led to them quitting the peak industry body for auto brands.

“The brand cannot in good faith continue to allow its membership fees to fund a campaign designed to deliberately slow the car industry’s contribution to Australia’s emissions reduction potential,” said then-Polestar Australia boss Samantha Johnson in a letter to the FCAI.

“Claims by the FCAI and its members of significant price hikes in response to the proposed Standard are over-blown.

“The FCAI has not released the full modelling underpinning its assertion; to the general public or to its own members. Rather, it appears that the FCAI has cherry-picked what it thinks will progress the position of only some members.

“When the FCAI commits to representing all voices in the automotive industry, fairly, Polestar will consider returning as a full member.”

While Polestar supported the NVES, the reaction from other brands after its announcement was mixed, with some supporting it but others like Toyota and Ford calling for changes to make it more workable.

The Australian Government in turn made revisions. This included moving “heavy off-road passenger vehicles” into the same category as utes and vans, and giving this category more lenient emissions targets.

The NVES has already been blamed for the discontinuation of the most efficient and affordable rear-wheel drive versions of the Ford Everest and Isuzu MU-X, though it has arguably incentivised some car brands to import more efficient models which they may not otherwise have.

While the government had said there was “no evidence” to suggest the NVES will increase vehicle prices, brands like Isuzu and Toyota have flagged price increases are likely.

A study by Blueflag – published by the Motor Trades Association of Australia (MTAA) in its pre-Budget submission to the federal government – claims all brands combined will be hit with penalties totalling $2.8 billion, based on the targets of the NVES.

However, that figure is based on carmakers not making “further adaptation of product offerings” and applies only to the current model lineups and the previously announced plans of carmakers, not future vehicles which are yet to be publicly confirmed.

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