26 March 2024

Government listens to MTAA advice to develop a workable Fuel Efficiency Standard 

After almost six weeks and over 40 meetings with the Australian Government, the Government has made concessions to its New Vehicle Efficiency Standards legislation which was released earlier this week.

The Motor Trade Association of WA (MTA WA), as part of the Motor Trades Association of Australia (MTAA), has consistently advocated for reasonable adjustments to the NVES scheme – such as moving light commercial vehicle targets closer to the US standard. The MTA WA, and the MTAA, are pleased that the Australian Government has noted its advice and applied some of the necessary adjustments to the final policy.

The changes include:

- Recalibration of the targets for Utes, vans and some 4WDs from passenger vehicles into the light commercial vehicle category. 

- Adjustment of the headline limit for trucks, vans and some 4WDs.

- The timing of implementation. While the commencement of the scheme will still occur on 1 January 2025, penalties will not commence until 1 July 2025.

- Adjustment of the upper breakpoints, increasing the upper breakpoints by 200kg for light commercial vehicles to 2400 Kg and passenger vehicles to 2200 Kg.

- Confirmation that a review of how the NVES is working will be conducted in 2026.

The Federal Government will also provide $60 million to boost EV charging at dealerships under the Driving the Nation fund.

The MTAA advises that the proposed standard is still very stringent as we head towards 2029. The standard is considered to be amongst the hardest in the world. It will be very challenging for the majority of car brands in the Australian market.

In an important message, MTAA CEO Matt Hobbs advised that it was important to note the role of the Australian new car dealership network in this outcome. “The new car dealership network got on board with the MTAA’s strategy and moved swiftly to provide the Government with compelling arguments as to why the change was required.”

The MTAA will continue to work with the Federal Government on the implementation of the NVES and its operation for the five-year term of the program, concluding in 2029.

The review in 2026 will be critical to the industry. This will include monitoring consumer impacts and international trends and advocating for adjustments to the NVES over time accordingly.

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