Marques face emissions fines
Major companies including Mazda, Nissan and Subaru face the possibility of millions of dollars in penalties after failing to meet climate targets for new cars sold across the Tasman.
The first six months of data since the Albanese government introduced the new-vehicle efficiency standard (NVES) shows 40 companies – 68 per cent of the total – beat their initial targets for average emissions efficiency.
Many of these, including BYD, BMW, Kia, Toyota, Tesla, Ford, Volkswagen and Polestar were found to have sold vehicles that, on average across their company fleets, released less carbon dioxide (CO2) per kilometre than required.
However, 19 companies missed their targets and could have to buy credits or pay penalties if they fail to improve their performance over the next two-and-a-half years.
Mazda has accrued a potential liability of about A$25 million, or about NZ$29.6m, Nissan of more than $10m and Subaru $7m. Liabilities, which become due in 2029, can accumulate or reduce.
Other companies to have missed their initial targets include Hyundai, General Motors, Honda, Porsche, Ferrari and Jaguar.
Catherine King, federal transport minister, says average pollution for new light passenger vehicles across the industry outperformed the target by 21 per cent. She adds: “These results make it clear the [standard] supports lower emissions and consumer affordability.”
Electric vehicles came in at 12 per cent of new-car sales in Australia during the second half of 2025 – an increase, but significantly short of what will be needed for the scheme to play its forecast role in meeting national climate targets.
Globally, about 25 per cent of new vehicles sold last year were electric. Australia has consistently trailed other developed and many developing countries when it comes to EV uptake, reports the Guardian. China is the world’s biggest EV market, accounting for 60 per cent of global sales last year.
Australia’s NVES requires carmakers to supply new vehicles that meet an average per-kilometre CO2 emissions target, which will be reduced over time to encourage cleaner models. No vehicles are banned. More polluting models can still be sold and offset by EVs or low emitters.
Companies that beat their target are awarded units, or credits, that can be sold to those that miss their target and need to offset the extra pollution from their vehicles.
In the first six months, companies earned 17.2 million credits for beating their targets. Those that missed their target faced a combined potential liability of 1.3m tonnes. It leaves a net surplus of 15.9 credits that can be used to meet targets in future years.
The Electric Vehicle Council believes the results show the standard is a success. Chief executive Julie Delvecchio, pictured above, says when the NEVS was legislated, critics had warned of “supply shortages, soaring prices and market disruption”. She adds the reality is that emissions are coming down, the choice of new cars is expanding and EV sales are increasing.
“The first performance report shows strong industry performance, healthy competition and a clear acceleration in cleaner vehicles coming to Australia,” says Delvecchio. “The data confirms what we said all along, and that’s clear, predictable standards drive innovation and investment. They don’t break markets, they modernise them.”
Delvecchio notes the results show an upcoming review should lead to targets being strengthened. If they are not, there’s a risk the momentum in introducing clean cars could be slowed as companies collect excess credits for beating targets that aren’t tough enough.
The National Automotive Leasing and Salary Packaging Association describes the results as encouraging, but show Australia is likely to fall short on EV uptake and climate targets if a fringe-benefits tax exemption on clean cars is canned.
