Discount bonanza: EV prices could be chopped because of changes to NVES CO2 reduction scheme
New federal government policy could trigger significant new electric vehicle discounts.
The EV buying bonanza is being predicted because of a change in the way Australia’s new CO2 reduction rules work.
Currently, the New Vehicle Emissions Scheme (NVES) bases an automotive brand’s combined CO2 emissions on how many vehicles it imports.
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But the federal government intends to change that to measure the emissions based on vehicles that are sold.
Fines – which are up to $100 per gram exceeding the limit per vehicle – and credits – which are issued for under-cutting limits – are assessed annually based on the calendar year.
Brands facing NVES fines because their line-ups emit more CO2 than allowed, could drop the price of low and zero emissions vehicles to encourage sales and so reduce or wipe out fines.
Under the current measuring system, manufacturers can import excess EVs to rebalance their portfolio emissions and wholesale them onto dealer balance sheets rather than sell them to the public.
It’s not a problem for electric-only brands such as Tesla and Xpeng, but big retail players like Toyota, Ford and Nissan with a heavy reliance on CO2-emitting vehicles and limited EV line-ups might have to take this course of action.
“Bringing this work forward now, ahead of a fulsome review in 2026, signals the Government’s determination to ensure Australian automotive businesses are not adversely impacted by the business practices of international car companies,” read a statement from the small business minister Julie Collins.
The change could stimulate demand for EVs – sales of which have slowed in 2024 and are going backward in 2025 – and PHEVs – which are growing strongly off a low base – or just mean a higher percentage of sales are concentrated in the final months of the year as people wait for the best deals to pop up.
“What I think will happen for quite a few brands is as we approach the compliance point they will push low and zero emissions vehicles harder and faster,” predicted Motor Trades Association of Australia CEO Matthew Hobbs.
“We may even find there is a new discount season at the end of the year.”
The MTAA has been among the automotive lobby groups pushing for the change from import to sale because of the pressure the current structure can place on dealers.
“Emissions should be counted when the vehicle is sold,” Hobbs said.
“By looking to count the impact of CO2 at the point of sale, the Government will remove the temptation for car companies to push vehicles onto dealers, no matter the demand of consumers, just to hit a compliance number for a particular year.
“Ultimately [this change] just strengthens the incentive for the OEMs (auto brands) to not just get low emission vehicles into the country but get them into consumer’s hands.”
It’s a theory that sounds great for EV buyers. The only problem is the change won’t be in-place for 2025.
The government doesn’t want to use the industry’s VFACTS sales measurement data which doesn’t include all brands and is instead understood to be keen on a bespoke system.
The VFACTS data is also managed by the Federal Chamber of Automotive Industries (FCAI), which was vociferous in its opposition to the NVES, much to the annoyance of the government.
The FCAI also opposes this proposed change in measurement.
“Since the legislation for NVES was rushed through Parliament in May last year, the industry has been working in partnership with the government to prepare for the implementation of the scheme,” said FCAI chief executive Tony Weber.
“Right now, we believe that it is too early to be contemplating changes to the administration of the NVES before it has even started.
“Any changes like this should be the focus of the review, which will commence in 2026, and done in partnership between the government and industry.”
