Popular car brands could pull models, lift prices due to Trump move
Some of Australia's most popular car brands are considering whether to pull models from the market from July, when the government's climate laws for the industry will become enforceable.The sector is facing great uncertainty with US President Donald Trump's announcement of tariffs on "foreign automobiles" and some in it fear the government's New Vehicle Efficiency Standard could prove another shock.The 4x2 Ford Everest and 4x2 Isuzu M-UX are two models that could be pulled, in part because the NVES classes them as passenger cars with stricter emissions rules, compared to their "commercial" 4x4 variants.Isuzu, Mazda and Great Wall Motors have all indicated to dealerships they expect to wear fines from NVES, and could raise prices in response.Two industry figures have also told the ABC that access to the Toyota LandCruiser is appearing more constrained — though Toyota has told the ABC it will ensure the supply of the "tool of trade" vehicle.And Mitsubishi says while it supports the NVES, electric vehicle uptake is not keeping pace with government hopes — the brand, like others, faces a decision of whether to bring in more EVs to be sold at a potential loss or wear the heavy penalties associated with breaching emission caps.Several car makers stood beside the government in February last year in support of the introduction of the NVES, which requires the total fleet of cars they sell to sit below an average carbon emissions ceiling or else face heavy penalties.Several car makers stood with Climate Change Minister Chris Bowen and Transport Minister Catherine King is support of the NVES when it was introduced. (ABC News: Ian Cutmore)Before last year Australia was the last major country, along with Russia, without vehicle efficiency laws, and the lack of them was leading to the country becoming a "dumping ground" for the least efficient, most heavily polluting cars.Toyota and Mitsubishi both told the ABC they remained supportive of NVES, though Toyota said its targets were "very challenging" and the company was still working through it."On pricing, the NVES has only just come into effect. We will need to assess how the market responds. Toyota always strives to be competitive in the marketplace," Toyota's vice president of sales Sean Hanley said.The government has pointed to evidence in foreign markets showing manufacturers prioritised staying competitive in their market, and so kept costs of models and vehicles the same for consumers after emissions policies had been introduced.EV sales continue to rise in Australia, with 14.25 per cent of all new cars sold in March being battery electric or plug-in hybrids.But the industry is facing great uncertainty after the election of United States President Donald Trump, who on Wednesday, local time, introduced tariffs on "all foreign automobiles" that could completely disrupt the auto makers.The industry also fears Trump administration plans to scrap auto subsidies introduced under the Biden administration's Inflation Reduction Act.A number of car makers have pulled back on previous electric vehicle commitments in that uncertain environment, even as many nations push to ramp up EV uptake.US President Donald Trump has introduced a tariff on "foreign" automobiles, though the sector is still deciphering how it will work. (Reuters: Carlos Barria)With multiple brands considering whether to raise prices or constrain supply when NVES takes force, The Australian has reported the Coalition plans to remove penalties on the brands if it wins the election as a cost of living measure.One industry figure said removing infringements could return Australia to the back of the queue when car maker global headquarters are assessing where to send their supplies of electric or low-emissions vehicles."I don't see what the point of it is if there is no stick," they said.Climate Change Minister Chris Bowen said the Coalition's reported plan was just another attempt to distract voters from its nuclear policy."Another day, another attempt by Peter Dutton to distract from his $600 billion nuclear scheme, and his cuts to pay for it, with policies copied from America," Mr Bowen said."Our policies are working to increase choice and reduce running costs. We've doubled the number of hybrids on the market and tripled the number of EVs."But Mr Dutton wants to turn NVES into the Not Very Effective Standards."But an additional industry figure said the automotive landscape was being rapidly rewritten, and while they still supported NVES it would be another impost, and delaying the start of infringements could act as a "shock absorber".They conceded removing infringements would "really make it so the thing doesn't operate in the same way", but warned brands could exit if NVES was left unchanged, with "too many" new brands entering the market just as the NVES impost was due to begin.How close should Australia be to the United States?The ABC's Vote Compass tool can help you find out where you stand.Blue Flag, which makes forecasts for the automotive sector, has estimated car makers could accrue around $2.8 billion in fines by 2029 based on current and future production and sales plans.Those penalties would be a boon to the car makers who are in the green and could sell accrued credits to those with debits.Blue Flag has also forecast about 60 new EVs are due to enter the Australian market, with the number for sale below $60,000 increasing tenfold since 2022.While NVES was tightly legislated, the Coalition could theoretically adjust the infringement rate without legislation — currently set at $50 per gram of CO2 per car over a brand's emissions limit.But doing so would mean car makers would still accrue credits or debits in the background, which don't come due until 2028, meaning that if infringements were reinstated any debits on their books would still be counted against them.Mitsubishi has urged the government to introduce a 24-month "grace period" before credits and debits are counted.
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