'Policy theatre': Australia's EV industry slams Dutton's plan to waive penalties for car brands that sell polluting petrol and diesel utes and SUVs under Labor's emissions scheme

Polestar Australia and the Electric Vehicle Council (EVC) have slammed the Coalition’s plan to scrap fines for carmakers that exceed emissions targets under the New Vehicle Efficiency Standards (NVES) if it wins the federal election in May.

As previously speculated by CarsGuide following a report by The Australian, the Coalition has made good on its rumoured pledge to water down the scheme after Opposition Leader Peter Dutton fronted the media calling it an “unfair tax”.

"This is a tax on families who need a reliable car and small businesses trying to grow. Instead of making life easier, Labor is making it harder and more expensive," Mr Dutton said.

Read More About Polestar

• Australia's EV future at risk? Car industry reacts to Dutton's rumoured plan to scrap fines for vehicle emissions breaches and why it might benefit Toyota, Mitsubishi, Ford and more
• Australia's car industry divided on NVES as EV sales tank and plug-in hybrids skyrocket | Analysis
• 'They won't survive': Australia now has vehicle emissions laws and this is the truth behind the New Vehicle Efficiency Standards that has divided the car industry

"A Coalition government will scrap this tax, so Australians can keep more of their hard-earned money when purchasing a new car."

Scott Maynard, Managing Director of Sino-Swedish EV brand Polestar, condemned the proposed move, saying it would give automakers a free pass to continue selling polluting vehicles in Australia.

“The NVES isn’t radical. It’s the bare minimum Australia needs to catch up with global standards that have existed for years in almost every other developed country. Without proper penalties in place to enforce these standards, we’ll remain behind the curve,” said Maynard.

“Removing financial penalties creates policy theatre, not substance. Standards without accountability aren’t standards, they’re suggestions that can easily be shrugged aside.”

The NVES was implemented by the Albanese Labor government last year with the aim of encouraging carmakers to sell more affordable fuel-efficient cars in Australia.

After taking effect on January 1, the scheme imposes a $100 fine per gram of carbon dioxide emitted over the mandated limit for each vehicle sold by car manufacturers.

Emissions targets are set at 143g/100km for passenger vehicles and a more lenient 210g/100km for light-commercial vehicles, which includes Australia’s popular ute segment. Fines aren’t enacted until 2028, with the emissions threshold lowering each year.

Australia is often cited as one of the last developed nations globally – alongside Russia – to adopt a national vehicle emissions standard.

The NVES has faced growing opposition from some in the automotive industry as EV sales have retracted this year, despite demand for hybrid and plug-in hybrid (PHEV) vehicles reaching record heights.

In the first three months of the year, hybrid and PHEVs accounted for 21 per cent of new-car sales. Over the same period, petrol and diesel sales fell by 8.9 per cent.

Tony Weber, the CEO of the Federal Chamber of Automotive Industries (FCAI), which represents the interests of Toyota, Ford, Mitsubishi and other carmakers in Australia, has previously questioned the government’s modelling that informed the scheme.

“We are at a critical point in transitioning to a lower-emission vehicle fleet. But the reality is clear: Australian families and businesses are not shifting in large numbers to EVs,” Weber said.

“The Australian automotive industry has long advocated for an ambitious and achievable emissions standard. Once again, questions must be asked about the Government’s modelling and in particular their assumptions about consumer acceptance of new low-emissions technologies.”

CEO of the EVC, Julie Delvecchio, maintains that the NVES is working and already bringing costs down considerably for consumers.

“From petrol and diesel cars to EVs, the NVES means lower costs at the servo, more choice and competition in cheaper-to-run vehicles, and cleaner air in our suburbs,” said Delvecchio.

“The NVES has only just started - we cannot afford to do a U-turn on this crucial policy that is set to save Australians $114 billion in fuel and maintenance savings and health benefits.”

If it wins May’s federal election, the Albanese government has said it plans on reviewing the NVES periodically from 2026.