Fuel-guzzling “Big American Cars” are facing a costly future reality in Australia after new changes to vehicle emissions were approved.
See also: Toyota's performance on climate protection is disappointing
The Australian government has struck a new deal that marks one of the “biggest changes the automotive industry has seen” in decades.
The Federal Government has struck a deal with the Greens to approve new emissions standards for the automotive industry, which will force car manufacturers to offer Australian drivers cleaner and greener cars.
And those who sell large American pick-up trucks, both in volume and displacement, the so-called “Yank Tanks”, may pay the price for the growing popularity of these vehicles in Australia.
See also: Electric vehicles: Xiaomi is already preparing its second EV
On Thursday morning, the government's New Vehicle Efficiency Standard passed the House of Representatives with the support of Green MPs – which was unexpected.
It is now expected to pass through the Council, ending months of compromise and speculation, including claims by Opposition Leader Peter Dutton that it is a “tax on UTEs (Australian Vehicles)”.
In summary, the changes will create an average emissions cap on all new vehicles in Australia sold from mid-2025. Car manufacturers that exceed their emissions limits face financial penalties – and the limit set will gradually be lowered each year.
See also: Only 2% bought Tesla Full Self-Driving after month-long test
Carmakers who want to compete in the Australian market without paying for fuel-guzzling vehicles will need to introduce more fuel-efficient and lower-emission cars to balance the results.
While a fuel efficiency standard was necessary and long overdue, Motor Vehicle Association of Australia (MTAA) chief executive officer Matt Hobbs said the changes were significant.
“This is the biggest change the industry has seen in a long time,” Mr. Hobbs said. “It’s bigger than our manufacturing output because it affects all brands.”
Some car manufacturers will do better than others when it comes to emissions, especially if they produce enough electric vehicles and hybrids so that they can “balance the scales.”
See also: 2025 Aston Martin Vantage: Bold New Look & Power Increase
“Imagine a set of scales with all the green cars on one side (electric vehicles, hybrids, super fuel-efficient cars), and then the not-so-green ones on the other,” said Mr. Hobbs.
“As a company, you have to look at all your sales in a year and balance them. Every year it gets harder. In the first year, you will be able to create some credits if you have some balance. “
“But where the issue really gets tricky is in the years 2028, 2029. Many of the analyses we have done show that most companies will find themselves with exposed debt.”
A number of factors, such as the higher availability and lower price of electric vehicles and hybrids, will help many automakers naturally balance the scales.
See also: HAJJ 2024: The Islamic pilgrimage with flying taxis & drones
Significant technological advances will also drive electrification, Mr. Hobbs said.
Yesterday, Chinese brand BYD revealed its first ute, a plug-in hybrid called the Shark, which is set to arrive in Australia in late 2024 or early 2025.
Its total driving range when operating in hybrid conditions is an impressive 840 kilometers.
“If you look at what Ford with the F150 in the US, they have a full electric F150, and while it is expensive, the price will probably come down,” Mr Hobbs said.
See also: Tesla: New layoffs, including in the Supercharger team
“They’re also looking at plug-in hybrids like what BYD is doing. They have some of those coming. They have the Ford Ranger, a plug-in hybrid, coming next year.”
But he also said the automotive world is changing “very quickly” and called for regular reviews of Australia’s New Vehicle Efficiency Standard.
“We want to make sure we don’t just make a theorem and then forget about it. We need to make sure we monitor it, see what’s happening in the market and make sure that if the US changes, or Europe, or Japan, or wherever else, we have the ability to review and work on what’s best for Australia in 2030, 2035 and beyond.”
Last month, more than 97,000 new cars were sold in Australia, bringing the total for the year to date to 401,000. That's 50,000 more than the same period in 2023.
According to the Federal Chamber of Automobiles, demand for new cars has been driven by a “strong tolerance market” for SUVs and Light Commercial Vehicles.
Under the New Vehicle Efficiency Standard, popular large and gasoline-powered utes and American pick-ups will have a stricter carbon emissions limit than a small passenger car.
See also: In the Hunt for Power: The Ram 1500 RHO vs. F-150 Raptor
This is due to amendments to the government's rules negotiated during talks with car manufacturers and car-dealer lobbyists, which will classify them as "Light Commercial".
Another feature of the plan is that car manufacturers that do well and sell a high percentage of clean cars will earn credits, which they can sell to other car brands.
Furthermore, a feature of Australia's AUKUS nuclear submarine deal will see American-made cars like the massive Ford F150 enjoy even less stringent standards.
But the generous exemptions may only be enjoyed for a few years, as the gradually lowered emissions limit becomes increasingly stricter unless brands balance their Yank Tanks with cleaner, greener alternatives.
If the balance is not restored, some car manufacturers may eventually be forced to pass on the costs to consumers.
Climate Council executive director Amanda McKenzie celebrated the news, describing it as a “win for the climate, a win for our health and a win for all Australians – whether they drive a car or not.”
“Australia has locked the garage forever when it comes to expensive, polluting cars,” Ms McKenzie said.
“This law will see Australia reduce climate emissions in one of its largest sources, guiding the transport sector towards a cleaner future.“
“We look forward to seeing the positive impacts this significant change will have on our portfolios, our health and our environment.”
The Greens' head of policy and advocacy, Jennifer Rayner, said a clear message had been sent to car manufacturers to "clean up their game".
“Manufacturers can no longer treat Australia as a dumping ground for dirty, inefficient cars,” said Dr. Rayner.
“This reform is a major step towards reducing climate pollution further and faster this decade, and a great example of what a progressive parliament can achieve when it puts our children's future first. We need more action like this, more often.”
Source: news.com.au
