The Australian Automotive Dealer Association (AADA) has voiced deep concern over the federal government’s New Vehicle Efficiency Standard (NVES), warning that its swift implementation threatens dealership viability, consumer affordability, and the broader automotive ecosystem.
In a recent analysis by the Centre for International Economics, commissioned by the AADA, the NVES could impose a staggering AUD 2.1 billion in compliance costs on dealerships between 2025 and 2029, depending on how manufacturers meet emission targets (Autotalk Australia). These costs—stemming from expected price hikes, margin compression, and shifts in vehicle mix—are likely to fall heavily on dealerships, particularly those reliant on internal combustion engine (ICE) vehicle sales (Autotalk Australia).
Moreover, the AADA highlights a consumer affordability crisis. Its “EV & Hybrid Vehicle Wave 2 Insights Report” finds that 67% of buyers plan to hold on to their current vehicles longer, and 62% are unwilling to pay more for an EV due to cost-of-living pressures (CarExpert). As a result, only one in four buyers are now open to EVs—underscoring the risk that tougher standards could further dampen new-car sales and limit consumer choice (CarExpert).
Dealers also caution that the push for fleet-wide emissions reductions—expected to drop average CO₂ emissions from approximately 141 g/km in 2025 to as low as 58–110 g/km by 2029—places disproportionate pressure on brands and retailers, especially without corresponding incentives or infrastructure support (CarsGuide, bdo.com.au).
In response, the AADA calls for greater collaboration with government to ensure the NVES implementation is fair, transparent, and sustainable. They urge the development of consumer incentives, support for infrastructure expansion, and measures to protect dealers from stranded assets as the market transitions (Autotalk Australia, Daily Telegraph).
Ultimately, the AADA emphasizes that while supporting environmental objectives, the government must also safeguard affordability, dealer viability, and market stability to ensure a balanced and inclusive transition toward cleaner vehicles.
