What will a new vehicle efficiency standard mean for EV adoption?

A New Vehicle Efficiency Standard (NVES) – also referred to as a fuel efficiency standard – is a regulation that encourages car makers to supply more efficient vehicles, including EVs.

The regulation sets an average target of carbon emissions (per kilometre) for the fleet of new cars sold each year. Vehicles can be sold both below and above this target, but overall, need to meet the average or exceed it. Manufacturers who beat the target earn credits that can be sold to manufacturers that miss the target.

Each year this target reduces, and as a result, the regulation encourages manufacturers to introduce more efficient vehicles to ensure they meet the target each year, and minimise how many credits they may have to purchase from their competitors.

Unlike over 85% of the global car market, Australia does not currently have a New Vehicle Efficiency Standard. As a result, Australia has become a dumping ground for some of the world’s most inefficient and polluting vehicles.

The Australian Government is currently developing a standard. If this standard is designed correctly, it will enable Australia to catch up to other markets like the US, and as a result, benefit from a significant increase in the supply of low and zero-emission vehicles, including EVs.

To find out more about the government’s development of a New Vehicle Efficiency Standard, go to: www.cleanercars.gov.au

You can also read more about the EVC’s public recommendations for a New Vehicle Efficiency Standard here, our detailed submission to the government here, plus independent research we commissioned on the potential benefits of a standard for Australia here.