Read companion article: CO2 hit on dealers

TESLA and BYD are the most obvious winners under the New Vehicle Efficiency Standard (NVES) with healthy sales and zero ‘tailpipe’ CO2 emissions. 

They will, as CO2 credit engines, bask in the demand from other car makers seeking credits to buy. They will, in effect, have the power of life and death over some OEMs depending on which brands these credit engines choose to deal with.

Securing early agreements with them, like now, might be critical.

The most immediate OEM that comes to mind that will bear the full brunt on the NVES is Isuzu Ute. It is a top-10 OEM which has cleverly built volume off just an SUV and ute on the one platform with no obvious offsetting potential models.

Ford’s reliance on the Ranger and Everest is a concern for its dealers and Subaru looks like it will also face a challenge.

RAM is another without offsetting models and big engines and so is Chevrolet (Silverado and Corvette) and Jaguar Land Rover which will have to do a whole lot more with E-Pace to balance out the ICE range of large vehicles.  

Specialist builders like Walkinshaw will be urgently considering their position. They won’t be the only ones.

Some niche importers might leave their model line-ups as they are and pay the penalty as they do in other markets. They will just have to wear the higher prices as these costs are passed on but the volume multiplier would be relatively small.

If Toyota cannot meet its targets it is more vulnerable because its huge sales volume gets multiplied by $100 per gram if it falls short of the target. It does have hybrids and this will help offset the HiLux, Prado and LandCruiser sales but if Toyota cannot increase demand for its lower-CO2 entries, it may have to limit availability of the big end of the line-up in order to achieve balance.

Hyundai and Kia are well down the EV pathway but it is still early days for them. Mitsubishi has plug-in hybrids on its side but has a long way to go to achieve balance on Triton, Pajero etc. 

Nissan has hybrids but it will need more than that. Mazda has mild hybrids throughout the range but they will not be enough at this point because of its high sales volume. Whoever thought being a sales leader in a market would be a problem?

Mercedes-Benz, BMW and VW have established EV models already on sale but the numbers are not great and sales of their EVs would need to be boosted by very large amounts in order to achieve balance. As with others, limiting ICE volumes to just high-margin super luxury versions might be an alternative path to follow.

However, it is early days and the above scenarios may play out quite differently depending on the government’s response to submissions from the industry.