The release of the first New Vehicle Efficiency Standard (NVES) results by the Federal Government shows that the combined industry has met the targets for 2025, but significant challenges lie ahead as the targets become more stringent through to 2029.
The results, released today by the NVES Regulator, outline the interim emissions value (IEV) for each of the car makers, along with details on the number of units (i.e. credits) issued under the scheme for 2025.
FCAI chief executive Tony Weber said the results showed that car makers responded quickly to the task of meeting the first year of emissions reduction targets but a substantial reduction in targets each year to 2029 will present significant future challenges.
“An increase in the range of zero and low emission vehicles available in the Australian market have supported the achievement of the first-year targets,” Mr Weber said.
“To support the emissions reduction objectives, car makers have increased the range of EVs with more than 100 EV models available to consumers.
“However, despite this increase in supply, EVs represented just 8.3 per cent of new vehicle sales in 2025, which was only a 1.1 percentage point increase on 2023.
Sustaining compliance as targets tighten will require materially stronger uptake of EVs than current market trends indicate.
“This is a major concern because an increase in EVs on Australian roads is critical to the achievement of the stringent Government targets which reduce each year to 2029,” Mr Weber said.
The NVES target for passenger vehicles in 2026 is 17 per cent lower than 2025 and 14 per cent lower for light commercial vehicles. By 2029, the target for passenger vehicles is 59 per cent lower than 2025 and 48 per cent lower for light commercial vehicles.
The rate of improvement required to avoid NVES penalties presents a substantial challenge, and any additional costs generated by the NVES will likely be passed on to new car buyers.
“The increase in the supply of zero and low emissions vehicles currently being undertaken by car makers is the best action they can take to meet the NVES targets. However, the key to long-term success of the NVES relies on increased demand for EVs. At the moment, demand for EVs remains subdued and this is a major concern and disappointment for car makers” Mr Weber said.
“FCAI is keen to see the Government consider policy settings that support consumer demand for EVs and low emission vehicles which will assist the achievement of the NVES.”