World’s rejected cars heading our way if poor fuel standards remain

Car makers are warning that the Australian market will become a global dumping ground for dirty vehicles after US President Joe Biden’s administration proposed massive emissions cuts for new passenger vehicles and trucks sold in the United States.

Sweeping changes to fuel efficiency standards were proposed by the US Environmental Protection Agency on Wednesday, which are forecast to cut the country’s emissions by 40 per cent by the end of the decade.

US President Joe Biden has proposed sweeping changes to fuel efficiency standards to drive sales of electric vehicles. Credit: Bloomberg

The scheme is designed to boost the sales of electric vehicles by 1000 per cent so that they account for 67 per cent of new passenger cars sold in the US by 2032, although EVs only captured 6 per cent of America’s new car sales last year. It also imposes stricter emissions standards on new truck sales.

Federal Climate Change and Energy Minister Chris Bowen is spearheading the federal government’s National Electric Vehicle Strategy, which should be unveiled before the budget on May 9. Bowen has already flagged the introduction of tougher vehicle emissions standards, which is the next major emissions reduction reform the government will tackle to help achieve its climate target.

Fuel efficiency standards impose limits on average emissions from the overall fleet of vehicles sold into the market by a manufacturer, to encourage them to sell more EVs.

Electric Vehicle Council chief executive Behyad Jafari, who represents most major car companies and suppliers of EV charging stations, said Australia must quickly match the US policy shift.

‘Australia will be dumped with their outdated gas guzzlers because it will be one of the only markets where there will be no consequences for doing so.’

Electric Vehicle Council chief executive Behyad Jafari

“This shift in position from the US is of monumental consequence to Australia,” Jafari said.

“Car companies will now be racing to meet the more stringent standards set in the US, Europe, China, and even New Zealand.

“Australia will be dumped with their outdated gas guzzlers because it will be one of the only markets where there will be no consequences for doing so.”

The Biden administration has pledged to spend billions to encourage the take-up of EVs, including nearly $15 billion for charging stations and $7 billion to support battery manufacturing, as well as up to $7500 in tax credits for people who purchase an EV and billions of dollars in grants to US manufacturers.

The other major lobby group representing car manufacturers, the Federal Chamber of Automotive Industries, also backs compulsory fuel efficiency standards but has questioned if Australia can afford to match the US’ ambitions.

“We want a mandated fuel efficiency standard – something that is ambitious but achievable,” said FCAI chairman Tony Weber.

“The US are spending billions of dollars and that is a scheme as much about manufacturing as it is environment policy.

“I doubt the Australian government is considering a consummate investment and hence we will not get the same outcome. We want policy based on evidence, and to understand the impact on consumers and that goes to the affordability and availability of vehicles.”

Jafari said any lobby group that argues against policy that is less ambitious than that of the Biden administration “should be laughed out of the room”.

“If the US hits its targets it means the majority of American drivers will be saving some $1300 a year in fuel costs. Right now, during a cost of living crisis, Australians are being required to push thousands of dollars through the petrol pump,” he said.

A spokesperson for Chris Bowen said the government had received more than 500 submissions to its strategy and noted that fuel efficiency standards are a key driver of emissions reduction.

“The consultation paper noted that fuel efficiency standards send signals to manufacturers to increase supply and sales of EVs and low-emissions vehicles and recognised that the absence of these standards in Australia has been cited as a key barrier to supplying more EV and fuel-efficient models to the Australian market.”

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