Election 2025: Liberals to drop fines on car emissions

The Coalition will abolish fines for car companies who breach targets under Australia’s first vehicle emissions standards scheme.

Fines for car companies who do not meet the New Vehicle Emissions Standards will be scrapped under the Coalition. Picture: Nigel Hallett

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The Coalition will abolish fines for car companies who breach targets under Australia’s first ­vehicle emissions standards scheme, in a major election commitment aimed at taking down the Albanese government’s claim that the price of petrol cars will not increase under Labor’s policy.

The Australian can reveal the Coalition will retain the New Vehicle Emissions Standards, but will not punish companies financially that do not meet the tough carbon goals. Coalition ­sources said the policy, to be announced during the campaign, has the backing of the sector.

Energy Minister Chris Bowen on Tuesday put a re-elected ­Albanese government on a collision course with motoring groups by declaring Labor’s vehicle standards regime would not force up the price of petrol cars, as he defied companies’ calls for the scheme to be overhauled.

Mr Bowen said vehicle emissions standards had not put up the price of petrol cars “anywhere else in the world”.

The comments, in the middle of a campaign, put the onus on a re-elected Labor government to ensure car prices do not increase under its watch.

A growing number of car suppliers are warning that the targets in the NVES will put prices of petrol cars up from July 1.

Mitsubishi Motors Australia is among leading brands calling for the targets in the scheme to be less aggressive. GWM Australia last month told carsales.com.au the NVES would force up the price of its popular Jolion SUV.

The Federal Chamber of Automotive Industries has demanded the government release modelling to show the impact from its scheme, which requires companies to progressively lower the carbon footprint of their fleet sold into Australia to cut the emissions of newly sold vehicles by 60 per cent by 2030.

Companies that miss the yearly target need to pay heavy fines or buy credits from suppliers that overperform, with industry modelling predicting car suppliers will be on the hook for $2.7bn of fines by the end of the decade.

FCAI chief executive Tony Weber – who represents car suppliers such as Ford, Holden, Honda and Nissan – said he did not think the sector would meet this year’s target, with fines likely to be paid by consumers through higher car prices.

He said demand for electric cars had plateaued over the past years, leaving major car companies likely to be fined because they were supplying consumers with the vehicles they wanted to buy. “We can’t see a scenario where prices won’t increase under the NVES,” Mr Weber said. “There will be penalties in the system come July 1 if we don’t make the targets. It doesn’t look like we will at the moment.”

Exacerbating the industry concerns over the NVES is that tax breaks for plug-in hybrids ended on Tuesday, despite taking up half of all electric vehicle sales in February.

The debate over the NVES comes as energy policy dominates the opening week of the campaign, with Labor upping the ante on its fear campaign against nuclear by claiming Peter Dutton’s energy policy will end 13,500 direct jobs in the aluminium industry.

Mr Bowen said the “Liberal Party and National Party need to work out whether they believe in choice of Australian motorists or they’re against it”.

“The new vehicle efficiency standard puts Australian motorists in the driving seat when it comes to choice and I’m proud of the fact we have tripled the number of EV models valuable since we came to office,” Mr Bowen said. “When we came to office there were no models available under $45,000; now there’s eight. That is our policy starting to work with a lot more to do.”

When asked if the price of petrol cars would rise under the NVES, Anthony Albanese on Tuesday declined to say.

The Prime Minister claimed “the manufacturers, the car dealers – everyone came on board for our plan, everyone except the Coalition”.

Jim Chalmers said the NVES was about introducing more options. “That will put downward pressure on prices over time,” the Treasurer said.

Opposition Treasury spokesman Angus Taylor – campaigning in the Brisbane Greens-held electorate of Ryan with LNP candidate Maggie Forrest – called Dr Chalmers’ and Mr Bowen’s statements that the price would not rise “a lie”.

“We know that the most popular cars in Australia, the (Ford) Ranger, the (Toyota) HiLux and the like, we know this will drive up the price,” Mr Taylor said.

Mitsubishi Motors Australia chief executive Shaun Westcott said the federal government should overhaul its NVES implementation to delay the introduction of penalties until there were enough EV chargers available for motorists.

Mr Westcott said unless the “foundational challenges” in the policy were addressed, prices might increase for consumers. He called for the availability of EV infrastructure to be reassessed and the NVES penalty timeline to be extended, to pave way for a “win-win outcome for sustainability, consumers and the automotive industry”.

He said that while Mitsubishi fully supported the NVES, there were “notable challenges” including that consumer uptake for battery EVs was slowing due to concerns about limited charging infrastructure.

While Mr Taylor nominated the Toyota HiLux as one of the vehicles to be affected, Toyota’s vice president of sales, marketing and franchise operations, Sean Hanley, said the carmaker supported the NVES, but it was “still working through the mechanics of it”.

Asked whether the price of some vehicles would rise, Mr Hanley said that because the NVES had just come into effect, Toyota would need to “assess how the market responds”.