RESEARCH commissioned by the Motor Trades Association of Australia (MTAA) and the Australian Automotive Dealer Association (AADA) is predicting that under the planned model line-up of the top three OEMs representing some 400,000 in sales in 2023, are going to find it all but impossible to meet the NVES standards by 2029 without significant model and powertrain changes.

They are Toyota, Mazda and Ford which supply vehicles to 615 of Australia’s 2852 car dealerships. Mitsubishi (194 dealers), Subaru (118), Isuzu Ute (149), and Nissan (187) are also predicted to find it hard to meet the 2029 passenger standards. Kia and Hyundai are regarded as having a moderate ability to meet the 2029 standards.

Both associations commissioned auto data specialist Blue Flag to forecast what year various models available to each OEM will be introduced to the market and the likelihood that the OEM will have models available to help them meet the harsh timetable required by the Labor government.

The proposed rules have also alarmed the government of Thailand which is reeling from news that vehicles made in its vast auto production complex that are sold in Australia are likely to attract penalties of $640 million a year thus raising the issue of potentially blowing up the free-trade agreement between the two countries.

The Federal Chamber of Automotive Industries (FCAI) says that Ford, for example, would pay more than $200 million in penalties for vehicles imported from Thailand in 2025.

Thailand exports nearly 265,000 vehicles to Australia and sources have told GoAutoNews Premium that there are no plans for any electric utes for any Thai production before 2030.

Meanwhile, Matt Hobbs, the CEO of MTAA said: “The proposed Fuel Efficiency Standard is the most aggressive proposed in the world. The good news is it is a draft, and we have a small window to convince the Government to make evidence-based adjustments.

Matt Hobbs

“The Government has stated that they want to catch up to the US Fuel Efficiency Standards.

“If you want to catch up with the US, then design a standard that has all the elements of the US standard. The draft Australian standard is all stick no carrot. Many of the technical mechanisms are just missing and they matter.” Matt Hobbs said.

“The proposed New Vehicle Efficiency Standard is the most aggressive proposed in the world.” – Matt Hobbs, CEO of MTAA

The Blue Flag data predicts that 19 of the 49 OEMs in its list will be severely challenged and find it very hard to be able to meet the 58 gram of CO₂ passenger standard required in 2029.

A further 18 OEMs are predicted to find it difficult to meet the passenger standard in 2029 but, even if they scrape in, their volumes are low and any contributions to reducing CO₂ output will be minimal.  

Only 11 OEMs are predicted to meet the standards by 2029 and, apart from MG and Tesla, two of these OEMs sell only 11,000 to 12,000 cars a year . The rest sell fewer than 5000 cars a year each. Some sell only hundreds of cars a year.

In passenger cars the target is 141g CO₂ for 2025. That reduces to 58g CO₂ for 2029.

Blue Flag sales weighted the CO₂ output of the various makers.

The Blue Flag data says the greatest output of sales weighted CO₂ was Lamborghini (325.2g CO₂), Chevrolet (311.5), Aston Martin (277.2), Bentley (275.3), Maserati (255.9) and Lotus (250.2).  Ferrari is 201.2. There are reports out of the US that these specialist cars are to be exempted from their version of the NVES

Brands that have sales weighted CO₂ output within the 2025 target of 141g CO₂ are Fiat (53.2g CO₂), Cupra (98.2), Volvo (106.4), MINI (111.4), Peugeot (118.1), Alfa Romeo (120.9), Citroen (126.4), Suzuki (131), MG (132.1), Lexus (133.6) and Skoda (138.7).  Honda is slightly over at 144g CO₂.

But, at this point, the only brand to sit under the 2029 NVES target for passenger cars of 58g CO₂ is Fiat (53.2g CO₂).

Of the major brands, Toyota’s sales-weighted CO₂ figure for passenger is 146.8g CO₂, Kia is 151.9, Mazda is 156.6, Hyundai is 161.9, Mitsubishi 165.8, GWM is 168.8, Subaru is 172.7, Ford is 196.6, Nissan 207.3 and Isuzu Ute is at 219.3g CO₂.

None of these meet the 2025 passenger standard and are mostly around 100 grams CO₂ short of the 2029 target.

The killer is the volume.

When you take the number of grams by which the OEM is shy of the target and multiply that by the penalty of $100 per gram by the number of cars sold you come up with some eye-watering numbers to be recovered from buyers once this scheme passes into law.

For example, according to the data, if a middle range passenger brand falls short of the 2025 target by 60g CO2; That is 60 X penalty ($100) = $6000. Then $6000 X sales (say 40,000)  =  $240 million.

For commercial vehicles, the 2025 target is 199g CO₂ and for 2029 81g CO₂.

Blue Flag, using its knowledge of forward model planning for each of the OEMs, has calculated the likely CO2 output that each OEM’s commercial vehicle model line-up in order to predict the debit or credit the OEM is likely to face.

Even allowing for taking into account the planned changes to more efficient engines in the future, the table shows just how far some OEMs have to go. 

Hard hit will be Chevrolet which falls short by 109g CO₂ in 2025 and by 142g CO₂ in 2029. Jeep faces shortfalls on commercials of 89 in 2025 and 141 in 2029 and RAM 93 in 2025 and 130g CO₂ in 2029.

Nissan has a credit of 5g CO₂ for 2025 but falls short by a predicted 73g CO₂ for 2029.

Peugeot (credit of 81), Mercedes-Benz (credit 67), Renault (56), Hyundai (23), LDV (5), Kia (3) and Volkswagen (1) have commercial vehicle credits for 2025 but no OEM except Peugeot passes the 2029 level.

Toyota has penalties of 13g CO₂ for 2025 and faces a deficit of 67 for 2029. While these numbers are smaller than others, Toyota’s higher volumes add a huge multiplier to the dollar penalties it faces.  

Mazda’s numbers are 5/80 (again with a significant volume multiplier on the penalty), Mitsubishi 10/56 and Ford 5/52.

Commercial vehicle performance on CO₂ output (gCO₂).