Australians Set to Benefit from New Vehicle Efficiency Standard, Lowering Car Prices and Petrol Bills

Australians can look forward to cleaner cars and more affordable petrol prices thanks to the Albanese government’s New Vehicle Efficiency Standard (NVES). The NVES, introduced to parliament in March, aims to incentivize car manufacturers to develop vehicles that use less fuel. The Climate Council expressed optimism about the NVES, citing a recent poll that showed 80% of Australians are burdened by high petrol prices and 70% support government intervention against climate pollution from cars.

According to the Climate Council CEO Amanda McKenzie, Australia has long been a dumping ground for dirty cars, and this needs to change. Cars in Australia currently contribute more than 10% of the country’s total climate pollution, and the average family spends over $5,000 on fuel each year. The introduction of the NVES legislation will help address these issues, allowing Australians to say goodbye to expensive fuel bills and unhealthy air.

Under the NVES, emission targets have been set for light commercial vehicles, with the goal of reducing carbon dioxide emissions to 210 grams per kilometer by 2025 and 110 grams per kilometer by 2029. The government estimates that these measures will reduce CO2 emissions by 369 million tonnes by 2050 and provide $5 billion in health benefits through reduced air pollution.

The NVES is projected to bring down fuel consumption by 20% of current levels, leading to annual savings of $1,000 for consumers and up to $17,000 over the lifespan of their vehicles. It is worth noting that Australia and Russia are the only advanced economies that have not implemented any fuel efficiency standards, making the NVES a significant step forward for the Australian automotive industry.

The Albanese government has refined the NVES through consultations with stakeholders, taking into account over 9,000 submissions during the last consultation period. This collaborative approach has allowed for modifications to better suit the needs of Australians, including recategorizing four-wheel drives and adjusting emissions standards. Additionally, the government will provide a $60 million grant under the Driving the Nation fund to boost electric vehicle (EV) charging infrastructure in Australian dealerships.

While the Climate Council and Electric Vehicle Council have commended the NVES for its positive impact on the automotive industry, they also emphasize the need for additional transport policies to achieve national emission reduction targets. Climate Council Head of Policy and Advocacy Jennifer Rayner suggests that promoting shared and active transport in big cities is crucial for cutting climate pollution quickly. She believes this shift should be at the center of the federal government’s upcoming Transport and Infrastructure Net Zero Roadmap.

Blair Palese, the Ethinvest Philanthropy Director, highlights the importance of clear policy direction to accelerate the transition to electric vehicles. She believes that strong vehicle emissions standards would make a significant difference, but she urges the Albanese government to show real leadership in speeding up the move away from internal combustion engine vehicles.

However, not everyone is fully supportive of the upcoming NVES. The Australian Automotive Dealer Association (AADA) CEO James Voortman argues that the standard’s targets are too ambitious and not achievable, especially for utes and large SUVs. He expresses concerns that consumers and local automotive businesses will suffer as a result of this policy. The NVES is set to take effect on January 1 next year and aims to catch up with other markets, like the U.S., on emissions reduction by 2028.

In response to the NVES, Tesla and Polestar have withdrawn from the Federal Chamber of Automotive Industries, citing false claims that the standard will lead to higher vehicle prices. Despite this opposition, the NVES remains a significant step forward in promoting cleaner cars and more affordable petrol prices for Australians.