Volkswagen Australia spits the dummy at its own industry and rival manufacturers over lack of cleaner-car progress

The continued lack of national policy for electric cars and cleaner petrol-powered cars is causing tension within the car industry’s peak body. 

Volkswagen Australia has hit out at the Federal Chamber of Automotive Industries (FCAI) – which is made up of the 42 brands in the Australian market, including VW – for a lack of meaningful action.  

Volkswagen Australia’s general manager of corporate communications, Paul Pottinger, has also accused fellow car brands of not doing enough to help spur legislative change.  

“Perhaps the chief difficulty our company has encountered in pursuing a progressive agenda is that we have been represented by the same industry body that serves the very brands that contentedly dump third-world technology on Australians,” he told CarsGuide. 

“European importers have no common ground with brands that care nothing for, and even tacitly oppose, Australia’s harmonisation with first-world standards.” 

It’s believed Volkswagen is not alone in its view, that not enough is being done to shepherd new, cleaner technology and vehicles into Australia, but no other brands wanted to speak publicly on the matter given the sensitive nature of the situation. 

VW’s public frustration at the FCAI comes despite its managing director, Michael Bartsch, being the deputy chair of the organisation. 

VW wants governments, at both federal and state levels, to do more to help the integration of electric vehicles (EVs). Just as importantly though, the company is also pushing for federal changes to our fuel standards; with locally produced fuel having a higher sulphur content than other developed countries. This has a significant impact on Volkswagen and other European brands getting access to the latest engines, as they require high-quality petrol to operate. 

Part of the need for urgency, particularly the fuel-quality issue, is that Australia currently has four fuel refineries, but two are due to close and the remaining two – one in Queensland and one in Victoria – require somewhere in the region of $200-250 million of funding to upgrade in order to produce better quality fuel.  

Those upgrades can only be done every five years, with the next opportunity coming in 2023.  

If not done then, Volkswagen and other brands wanting cleaner fuel would be forced to wait until 2027. That year is the current implementation date for ‘Euro 6’ emissions standards to be introduced in Australia, 12 years after they were implemented in Europe.  

In fact, Europe is set to adopt the much stricter Euro 7 standards in 2026, which call for a CO2 reduction of between 60-90 per cent and is likely to force most brands to invest heavily in plug-in hybrids to meet those targets. 

With no government standards for CO2 emissions regulations, Australian manufacturers have begun self-reporting through a new program developed by the FCAI.  

At the time, Mr Bartsch used the release of the initial emissions report to slam the government for failing to provide better oversight and said the ramifications for continued lack of emissions standards will lead to Australia becoming a “second world” market. 

“Such is the reluctance of government to countenance carbon emissions reduction targets, auto importers are obliged to implement self-regulation,” Mr Bartsch said at the time. 

“Australia is becoming a dumping ground for older and less efficient vehicles. 

“Even some of the popular hybrids on sale in this country utilise old tech engines that run on Australia's standard 91RON petrol with 150 parts per million of sulphur – 15 times worse than global best practice.” 

CarsGuide contacted the FCAI for comment but it did not wish to reply to Volkswagen’s position. 

It’s believed the recent actions of the Victorian government have been a catalyst for Volkswagen’s public upset.  

The state announced plans to introduce a world-first road user charge that would hit EV and plug-in hybrid drives with an extra tax to account for lost fuel excise, only to then add financial incentives for EV buyers in the wake of public backlash.  

The issue for Volkswagen is that FCAI chief executive, Tony Weber, released a statement praising the incentives despite the controversial road user charge remaining. 

However, Mr Weber also called for action on the issue at the heart of the unrest in the industry. 

“The aim is to reduce CO2 emissions from vehicles,” Mr Weber said in a statement on May 1. “Governments should focus on targets, not technologies. If governments set the targets, the carmakers will deliver the range of vehicles into the market that achieve environmental outcomes and meet the needs of Australian motorists.” 

While the FCAI continues to lobby the federal government to introduce a national CO2 policy, there is seemingly little interest from the incumbent Coalition government to introduce such an initiative. And while the Labour party has said its intention is to introduce more incentives for people to buy EVs should it win power at the next election; it hasn’t made any public commitment to a CO2 emissions policy.  

This continued stalemate between the FCAI and government is likely to cause further agitation between the industry body and Volkswagen, and CarsGuide understands that other brands are unhappy with the current situation.

But the net result is Australian motorists are likely to lose out on the latest models and technology from European brands in the coming decade unless something changes.