Volkswagen News

Australia’s new car market is at a “crisis point”, according to the Australian Automotive Dealer Association (AADA).  The AADA has warned dealers are losing money due to the influx of new car brands. AADA Chief Executive Officer James Voortman said Australia needs to stop letting new car brands launch here. “Dealers are facing intense competition, relentless pressure to take more stock and rising business costs. Too often, they are left to absorb the financial consequences of decisions made elsewhere in the supply chain,” Voortman said.  “There are simply too many manufacturers operating in this market and we need a pause on further car brands entering this market. At a time when other countries are trying to slow the rate of change and number of brands, Australia is allowing unfettered access to this market.” New car brands continue to launch in Australia, growing from 39 in 2021 to 67 in 2026, with more on the way in the coming months.  AADA has set out a 10-point plan, with recommendations for the government, suppliers and manufacturers.  The association wants the government to consider a capped licensing regime and pause the entry of any new brands into Australia.  It has called for the implementation of proposed dealer protections to be fast-tracked and liability of Australian Consumer Law breaches to be repositioned onto manufacturers, with new brand entries paused until this has been achieved.  It also wants at least a 12-month price freeze to guard against “severe pressure” on dealer profitability.  Among the changes for manufacturers is the agreement of realistic sales targets, allowing dealers to decline excess stock without facing commercial penalties.  AADA has previously raised concerns around long car repair and refund wait times in Australia as well as a "wave of litigation" when EV batteries need replacement outside of warranty. Australia’s market provides a near-perfect environment for new car brands to launch, because they are not subjected to major tariffs or prohibitive fees. It’s seen brands from around the world, especially China, flood into Aussie showrooms offering buyers very competitive prices.  Many Chinese brands operate with extensive sub-brand networks. There could be as many as nine Chery sub-brands in Australia by the end of 2027, while BYD and GWM also continue to actively add to their line-ups. These brands have capacity to produce copious amounts of stock, but selling them isn’t as simple a task, according to Voortman.  “Pushing excessive stock onto dealers is fuelling a race to the bottom. Aggressive discounting erodes margins and devalues vehicles while dealers carry the financing costs and risk of unsold vehicles,” Voortman said. “Strong headline vehicle sales can conceal serious financial distress at the businesses making those sales. Dealers cannot keep absorbing higher costs, lower margins and greater stock risk indefinitely.” This news follows reports that some Chinese brands are losing money on cars sold. Hyundai Australia Chief Executive Officer and President Don Romano told CarsGuide in July 2026 BYD’s approach to the Australian market wasn’t sustainable.  "I think if I were to lose money and dump cars, and if my stock price was down 40 per cent, I could do the same," Romano said.  "I think there's a big difference between growth at any cost and growth organically, so I'm not surprised. I would be if it was sustainable.”

Many Aussie have bought their first ever EV in 2026 and it’s changed the new car market forever. The Iran war's impact on fuel prices is often put forward as a key reason why more people than ever are making the electric car switch, but that's not the full story. Ed Harvey, Founder and Chief Executive Officer of Australasian home EV charger manufacturer Evnex, told CarsGuide it was fuel security that started to sway buyers. “It flipped the argument,” Harvey said. “The fuel prices have not just really strengthened the cost-saving argument, but also I think it's the first time that people really started talking about energy security or transport security.” Range anxiety has put many buyers off EVs.  It combines a fear of running out of charge with having nowhere to charge it. Harvey said the fuel crisis brought about by the Iran war and the closing of the integral Strait of Hormuz in March 2026 started to change buyer perception. Buyers can now save as much as $3600 a year in just fuel costs by making the EV switch, according to Evnex's research, but Harvey said fuel security also started to cause anxiety with panic fuel buying leading to localised shortages. The federal government relaxed fuel standards and released reserves, while launching a $20 million “Every little bit helps” fuel conservation advertising campaign. Harvey said it was fuel availability not fuel prices that "flipped the script" for many buyers. Drivers worried about where they could fill up as opposed to where they could charge up, for the first time. “I think that really changed how people thought about energy security and our reliance on imported fossil fuels,” Harvey said. “I knew some people with petrol or diesel vehicles that were asking friends to borrow electric vehicles for the holiday period because they were nervous they might not be able to get where they needed to go.” BYD Australia’s Chief Operating Officer Stephen Collins told CarsGuide higher fuel prices and fuel shortages contributed to exponential EV uptake earlier in 2026. Collins described the early stages of the fuel crisis period as a “pivotal point” and an “unprecedented time”. “That March, early April period - I think it was genuinely only a four-week period where we saw a big spike in orders,” Collins said. “I think there were a lot of people that were on the cusp of buying an EV and that tipped a lot of people into ‘I’ll just make the decision now’. “It was a pretty tumultuous time, so I think there’s some truth to that.” The Electric Vehicle Council’s (EVC) 2026 ‘State of EVs’ report found buyers purchased one EV every 100 seconds in the first half of 2026. Electric and plug-in hybrid vehicle sales contributed to more than a quarter of all new car sales in the first half of the year, compared to roughly one in every 10 in the first half of 2025. Where there are competitive EV choices, buyers are making the switch, such as the mid-size SUV segment. The BYD Sealion 7, Geely EX5 and Tesla Model Y have consistently featured among the best-selling cars in Australia in 2026, and have experienced unprecedented growth. There hasn’t been the same growth in some other large segments of the market, and this is because competitive EV choices are still emerging, according to Electric Vehicle Council Chair and Origin Energy E-mobility GM Chau Le. “In each of these segments, EVs are becoming competitive, but we're not quite there yet in some of the segments,” Le told CarsGuide. “We're still a bit out, but with more EV models coming in and improvement in battery technology, it's only a matter of time until we're competitive across all segments.” There are no electrified utes that reach the balance of affordability, capability and driveability that their diesel counterparts have yet. Diesel-powered utes like the Ford Ranger and Toyota HiLux continue to be a significant component of the new car market. Once competitive electric ute choices emerge, the ute segment will likely follow a similar transformation to the rest of the new car market. New car buyers' priorities have shifted permanently, and there's nothing fuel prices or supplies can do to change it.

Aussie buyers have a new hybrid compact SUV from Europe to consider. Volkswagen has just confirmed its next-generation T-Roc will launch in Australia with a mild-hybrid set-up.  The T-Roc will rival the full-hybrid Hyundai Kona ($33,700, before on-road costs) and Kia Seltos ($39,990, drive-away). The brand says the new T-Roc will arrive in Aussie showrooms in early 2027. The next-generation T-Roc will feature a mild-hybrid set-up in Australia at this stage. Volkswagen said the new set-up will contribute to lower fuel consumption and provide a responsive performance.  VW has not confirmed yet whether the full-hybrid variants of the T-Roc will land Down Under.  "We’re continuing to evaluate opportunities for the T-Roc range in Australia and will share further details as they become available," a spokesperson for VW Australia told CarsGuide. "At this stage, we have no additional variants to announce." The fully-hybrid T-Roc uses a 1.5-litre four-cylinder turbo-petrol engine and two electric motors to produce either 100kW/288Nm or 125kW/310Nm. Power has dropped slightly across both grades compared to the outgoing petrol line-up (previously 110kW/250Nm and 140kW/320Nm). However, the new entry-level hybrid gains a noticeable torque bump to 288Nm, while the up-spec grade delivers 310Nm. The full-hybrid T-Roc is equipped with a 1.6kWh nickel-manganese-cobalt battery, which enables the car to drive on electric-only power at speeds less than 60km/h without heavy acceleration.   The T-Roc boasts a more rounded overall design, with sharp creases either side of the bonnet. It has a sleek headlight design and single daytime running strip with black cladding on the grille, air intakes and wheel arches, as well as on the roof rails. Volkswagen is promising more interior space and increased practicality as well as better technology, safety and convenience features. VW has moved the gear selector to a steering column stalk, freeing up more centre console space. Inside, there’s a rectangular digital driver display and central multimedia screen, along with plenty of physical buttons on the steering wheel. The German brand said the car will have its latest software system, which has new driver assistance technologies and comfort-focused features. Volkswagen will reveal pricing for the new T-Roc close to its early 2027 arrival date. The current generation T-Roc kicks off from $38,990, with prices rising up to $49,990, before on-road costs. Buyers can expect an increase on those prices for the T-Roc’s new generation, with it likely to kick off from over $40,000 when it arrives. This will place it in a similar bracket to other conventional hybrid rivals, including the Toyota Corolla Cross (from $37,440), Hyundai Kona (from $36,950) and incoming Kia Seltos (from $37,990).

Volkswagen is officially in trouble, as the German giant pauses work on its new electric ID.Golf. The Volkswagen Golf was once the brand’s bread and butter, but changing buyer tastes and rising prices has pushed the hatchback into the background. "We simply can't afford this work right now," said Volkswagen CEO Thomas Schaefer, according to Reuters. "I know what the Golf means for Volkswagen and for Wolfsburg. That's ​why this decision was really not an easy one for us,” said Schaefer. He said the ID.Golf isn’t cancelled, just postponed, but if the situation doesn’t improve it might be the end of the road for the famous Golf.  The German carmaker is undergoing one of the biggest restructures in its history, with it likely to cut up to 100,000 jobs, close four factories and slice vehicle variants by up to 75 per cent in an attempt to make it leaner and more agile. Volkswagen posted a €5.9 billion ($9.43B) loss in the past three months, its largest quarterly loss in more than a decade. The problem is new ultra-affordable brands from China hitting Europe with incredible force. The German giant’s business model is to sell volume at low margin in Europe. "This business model is ⁠under ​enormous pressure in Europe," said Volkswagen Group boss Oliver Blume. Industry analysts have crunched the numbers and said Chinese makers can produce an equivalent electric vehicle for $11,000 less than a European maker.  The ID.Golf was expected to be based on the company’s new Scalable Systems Platform (SSP). This is an 800-volt EV platform that puts software at the heart of the car. Audi, Porsche and then VW were to get vehicles made on this platform. Software has been the thorn in Volkswagen's side. The company’s Cariad software division has been bleeding money and has not been delivering on its investment. Volkswagen has been forced to invest in US start-up Rivian to gain access to its software. Volkswagen also has a joint-venture with Chinese brand XPeng, which has spawned several vehicles in China. It also gives the brand access to XPeng’s software knowledge.

Australia’s EV buying growth has just been put on a global scale. AutoNews has released its “Global EV Report” looking at electric vehicle uptake around the world. Combined fully-electric and plug-in hybrid sales in Australia grew from just one per cent in 2025 to 15 per cent by 2025. The report confirmed BYD as the world’s leading EV manufacturers, with Tesla and Geely also making major contributions, which is reflected in their sales performance Down Under. It’s forecast that more than 66 per cent of the world’s EVs will be built in China in 2026.  Australia’s EV sales grew by 14 percentage points between 2020 and 2025, according to the report, which is more than South Korea, the United States and New Zealand for the same period.  Australia’s EV uptake still lags behind many of the world’s biggest markets.  China’s EV sales have grown by 47 points, while EV sales in the United Kingdom grew from 11 per cent to 35 per cent.  This news follows the Electric Vehicle Council’s “State of EV’s” report that found one in four new vehicles sold in the first half of 2026 were either fully-electric or PHEV in Australia. The EVC noted sales must still increase tenfold to reach a targeted five million EVs on Aussie roads by 2035.  Australia’s market is well set up for large-scale EV uptake because it has limited import restrictions and associated costs compared to other countries.  This differs from Europe, for example, which has placed hefty tariffs on Chinese imported EVs as it aims to protect its local carmaking industry.  Australia's open market allows Chinese automakers to rapidly roll out new models Down Under, several of which have become top sellers. The predominantly China-built Tesla Model Y mid-size SUV is the best-selling EV in Australia, while the closely-rivaling BYD Sealion 7 isn’t far behind.  Other EVs, including the Geely EX5 and Zeekr 7X have also taken the market by storm in 2026, at the expensive of some Australia's previous petrol- and diesel-powered favourites. Nepal led global EV market share growth between 2020 and 2025 with a 58 percentage point jump, with electric and plug-in hybrid representing 68 per cent of all new vehicle sales.  Vietnam also saw substantial growth, going from no EV sales to 41 per cent in the five-year period.  Singapore saw a comparable surge, climbing from three per cent in 2020 to 40 per cent in 2025. Norway had an incredible 97 per cent of its new car sales that were represented by EV and PHEV in 2025. The United States has one of the worst EV uptake rates for the period, according to AutoNews.  It only grew from two per cent to 10 per cent across the five years, with only Canada and New Zealand recording less growth.  This slower uptake is due to trade barriers such as the US government’s 100 per cent tariff on Chinese-made EVs, as well as national security and surveillance concerns restricting imports further.  While BYD, Tesla and Geely produce the most EVs, Volkswagen also registers a strong contribution, along with Leapmotor and Hyundai.

BYD has smashed through a sales milestone. The brand said it has made more than 50 per cent of its total revenue from export markets, rather than from its domestic sales in the Chinese market. This is due to BYD’s efforts in the last several years growing both its exports and its overseas manufacturing efforts in order to escape a stagnant Chinese new car market, which has contracted after a long period of explosive growth. The brand’s sales in China declined by 12 per cent, but it grew its exports by a whopping 137 per cent, to well over half a million units, according to BYD’s third quarter numbers for 2026. The Chinese market has reached a level of saturation and stagnation after several years of a bruising price war, which many competitors have pointed the finger at BYD’s aggressive domestic pricing strategy, overseas markets have become a crucial battleground for their future growth aspirations. Profit margins on vehicles sold in Australia, Europe and South America are exponentially higher than cars sold domestically in China. This is part of the reason sticker prices in the Chinese market are significantly lower than those we see in other markets. Price tags for the Australian vehicles generally attract a 15 - 20 per cent premium over the equivalent spec offered in China. Part of this will be down to right-hand drive conversion costs, and higher compliance costs for vehicles to meet Australia’s notoriously strict design standards and high bar for a maximum five-star ANCAP score. One analyst, as quoted in Nikkei Asia’s analysis of BYD’s latest sales numbers, said the company earns “roughly 10 times more profit per vehicle abroad than in China”. A part of this is vehicles sold in developed markets like Australia are offered in higher trim levels than they are in the Chinese domestic market, although the slew of larger, more expensive 4WDs and growth of luxury sub-brands like BYD’s Denza or Geely’s Zeekr are also massively helping to buff profit margins. GWM proclaims that it has doubled its average sale price in the last seven years in Australia as it has introduced pricier, better-featured vehicles, both from its Haval SUV brand and its Tank off-road brand further up the price scale. “The year-on-year increase in volume has also come with new cars at more expensive price points. If we can do that at the same time as showing customers value no matter the price then we’re on the right track." the brand’s Executive General Manager of Marketing and Communications Steve Maciver told CarsGuide recently. GWM is set to introduce its dedicated luxury arm Wey into Australia before the end of 2026. While Chinese brands continue to dominate the sales charts in Australia, where the barrier to entry is significantly lower, automakers like BYD, Geely, and Chery are facing tariffs in Europe and the USA as those jurisdictions move to protect their own domestic automaking capabilities. This is putting a cap on their respective ambitions, but each brand is also moving to diversify and acquire manufacturing capacity not only across Europe, but also in other strategic markets like South Korea and closer to home in South East Asia. Legacy automakers are feeling the crunch. Domestically this means household names like Subaru and Nissan dropping out of the race to be a top-10 automaker by sales, but internationally it means a massive squeeze in profit margins, big expenditure in research and development, and a large reduction in market share. This has resulted in many large international brands like Volkswagen and Nissan resorting to closing factories or cutting jobs by the thousands, with some brands needing to embrace Chinese joint-venture partnerships more closely to build more competitive models for export. Nissan, for example, shut down its historic Oppama factory in Japan as part of its Re:Nissan business overhaul, as it looks to reduce its capacity by a million units. As of the end of September 2026, the top-10 rankings in Australia are: Toyota (152,944 units) BYD (76614 units) Ford (61104 units) Kia (60800 units) Mazda (58865 units) Hyundai (56009 units) GWM (44959 units) Tesla (41705 units) Chery (38022 units) MG (36832 units)

Plug-in hybrid vehicles, or PHEVs, are exploding in popularity in Australia as better value models flood in, but a new report claims this particular type of electrified vehicle is six times worse for the climate than official numbers suggest. The report from Transport & Environment, a Brussels based advocacy group for clean energy, says the gap between official WLTP emissions numbers and those assessed in the real world is rapidly expanding, despite more recent plug-in hybrid models focusing on pure electric driving range. Transport & Environment says data collected by the EEA (European Environment Agency) on real-world emissions for PHEVs proves the technology is almost as bad as emissions from petrol and diesel cars, offering just a 14 per cent emissions reduction against an 83 per cent reduction claim according to official WLTP numbers. The reason, the group says, is because a focus on heavier cars with bigger batteries and longer electric driving ranges did not correlate to better emissions performance, with the best indicator instead being the power of the electric motor. In the study, plug-ins with electric motors 25 per cent more powerful than their combustion engines cut real-world emissions by a third, and up to 20 per cent even when the battery was drained. Transport & Environment concluded the ‘utility factor’ correction applied in European emissions rules encouraging automakers to increase battery size to reduce official emissions numbers fails to account for the fact that PHEVs are only driven, on average, 27 per cent of the time in fully electric mode. This means the rest of the time, when the battery is discharged, the engine must work harder to drag around the larger battery, skyrocketing the car’s real-world emissions. The group argues that amending these concessions to the official number to account for this would encourage automakers to improve drivetrain efficiency rather than simply increase battery size. Lucien Mathieu, cars director at Transport & Environment, went so far as to say: “A decade after Dieselgate, it is outrageous that Europe is once again debating whether to keep using misleading emissions to sell cars. “The European Parliament and Council have a clear choice, protect drivers’ wallets or allow carmakers to continue lying to consumers.” This matters in Australia, as automakers rely on the same official emissions numbers to comply with our market’s recently-introduced emissions regime, the New Vehicle Efficiency Standard (NVES). The rules crack down on a car’s official CO2 numbers, imposing fines on automakers whose fleets exceed thresholds similar to those in the European Union. As a result, a flood of new plug-in hybrids at more competitive price points have been rushed to the Australian market, from ultra-affordable options like the new BYD Atto 2 DM-i (from $24,990) to the ultra-mainstream Toyota RAV4 PHEV (from $59,515). Plug-in hybrid tech is seen as the future of the ever-popular ute segment, which is more ill suited to full EV technology due to the weight of batteries limiting payload and towing capacity. To that end, BYD’s Shark 6 has single-handedly caused a technology shift in the segment, introducing plug-in hybrid technology to the historically diesel-dependent sector. In an attempt to cash-in on the runaway success of the Shark 6, many automakers are plotting PHEV utes and large off-road SUVs for our market, including the much-hyped Nissan Frontier Pro and intriguing Chery Stockman, which uses new diesel plug-in tech. Whether European emissions laws will be amended following these revelations remains to be seen, as Australia’s NVES regime is largely based on established Euro rules.

Volkswagen’s new China strategy is in the works, and it could be a game-changer for the brand in Australia.  The German carmaker is evaluating selling some of its China-only models in Europe, according to a report from UK outlet Autocar.  It comes as brands face increasing pressure to offer models at competitive prices to fight off ultra-affordable Chinese competition.  “For the future, we’re getting ready for bringing one or more vehicles in from China,” Volkswagen Chief Executive Officer Thomas Schafer told Autocar.  Volkswagen Group remains one of the biggest carmakers in the world, with its footprint spanning Audi, Cupra and Skoda, among others. Volkswagen Group Chief Executive Officer Oliver Blume said in October 2026 the company is under “enormous pressure” from Chinese competition.  VW positions itself as a high-volume, low-margin company, but Chinese carmakers like BYD and Chery are eating into this segment because of high European production costs.  Consultancy firm AlixPartners recently said Chinese brands can build EVs for $11,000 less than European rivals, giving them a competitive advantage on pricing.  Volkswagen has a deep China presence via major joint ventures with SAIC Motor, owner of MG and LDV, as well as FAW and Volkswagen Anhui. VW will now look to lean into this presence that has seen them build cars in China at an affordable enough price to compete with Chinese peers.  The brand has already started to sell China-developed models globally, including in Australia, such as the Cupra Tavascan mid-size SUV.  "We’ve radically rethought the vehicles and worked with partners here and there ,” Schafer said.   “We’ve set up vehicles that are completely cost-competitive in the Chinese market. “We’re starting now to export to the global south and countries that have easier access from China than Europe, such as Australia and the Middle East.” It’s unclear what China-only models are under consideration for Europe. The VW boss promised any new models would not replace the current crop of offerings on sale in Europe.  Autocar speculated new European models could include the ID. Unyx 09 electric sedan co-developed with XPeng and the ID. Aura T6 large size SUV. Schafer ruled out the ID. Era upper-large SUV for the European market as it would be unsuitable due to its size. It’s unlikely Australia will see the impacts of this move for some time. The announcement does mean some previously China-only EVs will be built in right-hand drive, easing any local arrival. China is a left-hand drive market, so engineering to right-hand drive often requires substantial and sometimes prohibitive investment.  This news follows dramatic reports in July 2026 that VW Group is targeting up to 50 per cent fewer models. A spokesperson for Volkswagen Australia told CarsGuide at the time this decision would have no immediate impact on the local branch.  It’s likely to be a similar story with this latest announcement, but any models under consideration could provide the local branch with some renewed momentum.  Volkswagen sales are down more than 23 per cent to the end of September 2026 compared to September 2025, while Audi, Porsche and Skoda have also suffered declines.  VW models imported into Australia from China should be cheaper than those imported from Europe, and could provide buyers with some further affordable European-influenced choice.

Volkswagen is under “enormous pressure” from Chinese competition, according to its boss Oliver Blume. The boss of Volkswagen Group, which includes Audi, Cupra, Skoda, VW and more, has called for help to support local manufacturing to compete with a new wave of affordable Chinese EVs, as well as evolving market demands, according to Reuters. Volkswagen is getting squeezed in Europe by ultra-affordable new entrants to the market. The German giant’s business model is to sell volume at low margin in Europe. "This business model is ⁠under ​enormous pressure in Europe," Blume said. The recent Paris motor show was awash with new Chinese brands looking to muscle in, with big dollar war chests and plenty of production capacity. This follows news that Chinese carmakers can build an electric car for $11,000 less than the equivalent European model, according to consultancy firm AlixPartners. This has squeezed European makers' margins, which limits the ability to fund the next generation of models. “Chinese brands have taken 10 percent of volume from Western manufacturers in just a few years, and in doing so have fundamentally reset consumer expectations on price, technology and innovation,” said Xing Zhou, AlixPartners co-head of automotive for Germany, Austria and Switzerland. A similar storyline is more advanced in Australia where Chiense carmakers such as BYD, Chery and GWM are regular top 10 sellers, and new brands such as Geely and Zeekr are rising fast. The company has already agreed to cut its line-up in half, reduce model variants by 75 per cent and cut 100,000 jobs by the end of the decade to make itself leaner and more agile to stave off defeat. Now VW CEO Thomas Schafer has told UK publication Auto Express the model cull wasn’t really a problem and didn’t cause much drama. This is because it is a natural cycle of renewal driven by Europe’s 2035 mandate to cut emissions by 90 per cent. A natural cull will occur because Volkswagen won’t sell for example both the petrol-powered Polo and Tiguan and the electric ID.Polo and ID.Tiguan by that time, and this contraction of its line-up can be applied across its brands. He also said there will be a refocus on the most profitable products, meaning low-wattage niche vehicles will be gone. Volkswagen Australia already went through a similar cull, where it ditched the slow selling Passat and Arteon sedans to focus on SUVs and EVs.

Petrol- and diesel-powered cars are back on the agenda in Europe. France and Germany are brokering a deal to see the European Union will walk back from its 100 per cent CO2 emissions reduction target, opting for a 90 per cent reduction instead, according to a report in Auto News. The old rules would have completely phased out petrol- and diesel-powered cars by 2035, but the EU has changed its tune. The EU is expected to also remove any offset requirements for the remaining 10 per cent that would have required carmakers to pursue expensive low-carbon steel or alternative fuels. This news means European carmakers will continue to build internal combustion cars for the foreseeable future. Rumours of the EU rolling back its emissions targets started in 2025, when multiple reports speculated the ground-breaking ban was in doubt. President of the European Parliament’s biggest party, the EPP, Manfred Weber told German newspaper Bild in December 2025, the 2035 plans were “off the table”. Weber said that “there will also be no 100% target from 2040 onwards”, ruling out a complete combustion engine ban in the future. The rules have come under extensive scrutiny from key stakeholders, including German giant Mercedes-Benz. Chief Executive Officer Ola Kallenius criticised the inclusion of offsets as part of the rules in March 2026, with offsets now all-but officially ruled out. “I know the market for green steel and how unrealistic those expectations are,” Kallenius said. He also said the rules could trigger a collapse in demand and distort the market. New cars sold that emit high levels of CO2 incur fines for brands under Australia's New Vehicle Efficiency Standard (NVES). By contrast, brands earn credits for cars that emit no CO2. The federal government has no plans to ditch NVES and is targeting five million EVs on Aussie roads by 2035, but some carmakers have criticised the rules. Ford Chief Executive Officer Jim Farley said regulations like NVES force carmakers to build cars to satisfy the rules, not buyers. “What we’ve seen around the world with this kind of pressure on pure EVs is that ultimately all OEMs develop compliance vehicles,” Farley said. “They’re not designed for customers. They’re designed for the OEM to be compliant and they’re subsidised by the OEMs and the customers have great choice. “That’s not a natural market and over time that winds up not being sustainable. “Something your government, or any government, has to be very sensitive to around the CO2 glide path. We want to reduce our CO2 footprint, but there’s a level that the customer can’t afford, and not all duty cycles can be electrified.” The NVES regulator handed down the inaugural 2025 performance period for NVES in early 2026. Mazda accrued over 500,000 emissions debits, which was the most of any brand, while Nissan and Subaru rounded out the top three. The regulator will release details of the 2026 performance period in February 2027, before the rules get even tougher in years to come. Some hybrid models will start to incur fines under the scheme, while utes will also come under scrutiny.