Australian Coalition plans to eliminate fees for cars not meeting fuel efficiency rules

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The Coalition would roll back multi-billion dollar penalties under Labor’s fuel efficiency standards if elected, branding them a “tax” on Australian drivers.

The National Vehicle Emissions Scheme (NVES) was legislated by the government in 2024 and comes into effect on 1 July.

Mirroring other international schemes, it penalises high-polluting vehicles by setting an emissions ceiling for each manufacturer’s fleet, incentivising consumers to buy low-emission vehicles including hybrids and electric vehicles (EV).

United States President Donald Trump’s tariff trade war has thrust the automotive sector into great uncertainty, and the Coalition has said the fines levied on the sector would cost voters $2.7 billion by 2029.

Opposition leader Peter Dutton said: “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.”

“We want cleaner, cheaper cars on Australian roads as we head towards net zero by 2050, but forcing unfair penalties on car makers and consumers is not the answer,” Dutton said.

The penalties under Labor’s scheme will be accrued, and fines would only have been paid after 2028.

But some makers have already flagged they would either pass these down to consumers or remove popular models from sale to minimise penalties.

In 2019, the Coalition ran a campaign critical of electric vehicles, with then small business minister Michaelia Cash pledging to “save our utes”.

A man wearing glasses and a blue suit is speaking.

Opposition leader Peter Dutton has warned US President Donald Trump’s tariff trade creates uncertainty for the automotive sector and may cost voters. Source: AAP / Lukas Coch

The Opposition says it will maintain Labor’s standards to continue to incentivise manufacturers to produce cleaner vehicles.

Opposition transport spokesperson Bridget McKenzie said the Coalition supports low-emissions technologies but added that for many families, EVs are not practical.

“We want cleaner, cheaper cars on Australian roads as we head towards net zero by 2050, but forcing unfair penalties on car makers and consumers is not the answer.”

PM labels changes ‘nonsensical’ as industry responds

Speaking in Darwin, Prime Minister Anthony Albanese labelled the Coalition’s policy “nonsensical” and would basically remove the incentive for the policy to be implemented.

“I find it extraordinary that Peter Dutton, who says he cares about the price of fuel, doesn’t want people to have more fuel efficient cars, which reduce the costs of filling up their car,” he said.

Albanese said the policy had been designed with consultation from manufacturers, saying before the laws were passed, the only nations without such standards were Australia and Russia.

The Electric Vehicle Council said the Coalition’s proposed changes to the regulations would render them “toothless,” and leave Australians to pay more for transport in the long run.

“Removing fines from the NVES is like having road rules without enforcement — no consequences for breaking the rules and no motivation to follow them,” Electric Vehicle Council chief executive officer Julie Delvecchio said.

“Scrapping fines takes us back to the bad old days we left firmly in the rear-view mirror where Australia, alongside Russia, was a dumping ground for the world’s unwanted, fuel-guzzling, inefficient cars.”

The Caravan Industry Association was more supportive.

“The NVES, as it currently stands, threatens to penalise the core of Australia’s vehicle fleet for non-compliance – families, tradies and caravanners will pay that penalty,” it said in a statement.

“The Coalition’s commitment reflects a practical approach that balances environmental objectives with economic realities.”

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