According to a report by media sources, Coalition representatives have stated that they have secured the support of the automotive sector in a move aimed at countering Labour's claims that the cost of petrol and diesel vehicles would not increase under the New Vehicle Efficiency Standard (NVES).

The full policy is expected to be outlined in greater detail closer to election day. The Chief Executive Officer of the Electric Vehicle Council (EVC), Julie Delvecchio, stated that the potential policy shift would allow manufacturers to continue selling higher-emission vehicles without penalty while failing to reduce the cost of electric and hybrid vehicles for consumers.

"Removing penalties from the efficiency standard will have one clear outcome: Australians will miss out on the financial savings associated with switching to an electric vehicle - up to AUD 3,000 (US$ 1,900) per year that could remain in their pockets - simply because the most fuel-efficient vehicles will not reach our shores," Delvecchio stated.

The EVC has maintained that the NVES has led to lower costs for consumers since its implementation on 1 January, with the number of electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) models available in Australia now exceeding 120. This includes the country's first EV priced under AUD 30,000 - the BYD Dolphin.

"No penalties for carmakers will result in fewer fuel-efficient vehicles and higher running costs," Delvecchio added.

"Although it is still early, the NVES is already playing a role in expanding consumer choice, reducing fuel costs, and increasing price competition for EVs and fuel-efficient vehicles."

The NVES was designed to encourage car manufacturers to gradually increase the sale of fuel-efficient vehicles in Australia or face a penalty of AUD 100 for every gram of carbon dioxide emissions exceeding the prescribed limit per vehicle sold. Australia remains one of the last developed nations - alongside Russia - to adopt a vehicle emissions standard.

Emissions targets are set at 143g/km for passenger vehicles and 210g/km for light commercial vehicles, including the ute (pick-up truck) segment. Penalties for non-compliance will not take effect until 2028, with the emissions threshold set to decrease annually.

Despite a 19.9% decline in EV demand in March compared to the same period last year, PHEV sales recorded a 380% increase following the expiration of the Fringe Benefits Tax exemption on 1 April.

Meanwhile, demand for petrol hybrids has risen by 34.8% year-on-year, whereas petrol and diesel vehicle sales have declined by 9.8% over the same period.

The Federal Chamber of Automotive Industries (FCAI), which represents several of Australia's leading car brands, including Toyota, Mitsubishi, and Ford, has been critical of the NVES since its introduction.

FCAI Chief Executive Officer Tony Weber stated that the decline in EV demand this year reflected the government's failure to consider consumer preferences when formulating the scheme.

"We are at a point of transition to a lower-emission vehicle fleet. However, Australian families and businesses are not adopting EVs in large numbers," Weber said.

"The Australian automotive industry has long advocated for an ambitious yet achievable emissions standard. Once again, questions must be raised about the Government's modelling and, in particular, its assumptions regarding consumer acceptance of new low-emission technologies."

In a statement on the NVES, Sean Hanley, Vice President of Sales, Marketing, and Franchise Operations at Toyota, stated that while the company supports the NVES, the targets present a challenge for manufacturers.

"The targets set within the NVES are particularly demanding, especially for commercial vehicles," Hanley stated.

"We have no intention of discontinuing vehicles that remain in demand among Australians. At the same time, we acknowledge our responsibility to customers who require 'tool of trade' vehicles."

Despite its passenger vehicle line-up consisting solely of hybrid powertrains - most of which fall within the NVES's initial emissions targets - Toyota continues to offer SUVs and utes that exceed the prescribed limits, including the HiLux, LandCruiser, and Prado.

Its current portfolio comprises 22 models, of which only one is an EV. This contrasts with newer Chinese brands in Australia, such as BYD, which exclusively offer EVs or PHEVs.

Mitsubishi Australia, whose President and Chief Executive Officer Shaun Wescott serves as Deputy Chair of the FCAI, has also expressed support for the NVES but argued that consumers would benefit from policy reforms. The company offers the Outlander PHEV but has not yet introduced an EV in the country.

"There are challenges in aligning the policy's ambitions with market realities and practical constraints. Automotive manufacturers must navigate issues such as gaps in certain vehicle segments, difficulties in designing and introducing new models for the Australian market, and slowing EV adoption due to concerns about charging infrastructure," stated Mitsubishi's Government Relations Manager, Yarik Turianskyi.

Ford Australia, which derived 89% of its total sales last year from the diesel-powered Ranger ute and Everest SUV, stated that it would cooperate with whichever government is elected in relation to the NVES but raised similar concerns to those expressed by Toyota and Mitsubishi.

"We recognise the importance of an emissions framework for the country and continue to engage with the industry and government to ensure our perspective is taken into account in the development of a supportive ecosystem and accompanying measures," stated a Ford spokesperson.

"We understand that the NVES presents a challenging transition for both the industry and our company. Regardless of the outcome of the upcoming election, we will continue to work with the government."

The Albanese government has stated that it plans to review the NVES periodically from 2026.

According to Julie Delvecchio, maintaining penalties for manufacturers that fail to meet the emissions targets is necessary to ensure that Australians benefit from long-term cost-of-living relief while enabling the transport sector to achieve the government-mandated goal of net zero emissions by 2050.

"Without a stringent fuel efficiency standard, Australia risks becoming a market for fuel-inefficient, high-emission vehicles. While some manufacturers may favour a weaker policy, it is Australians who will bear the financial consequences of such changes," Delvecchio stated.