Car industry body accused of 'undermining' Australian new-vehicle emissions rules

03/06/2025 05:03 PM

Polestar has hit back at “ignorant” comments by the Federal Chamber of Automotive Industries (FCAI), the peak lobby group for major car manufacturers in Australia, which this week suggested just-introduced CO2 emissions rules for new vehicles “will not succeed.”

They are the same standards that recent research has forecast could cost leading car makers – members of the FCAI – as much as $2.8 billion in government fines by 2029 for not being able to meet.

Many car brands have already warned a portion of the fines – handed out if the average CO2 emissions of the new vehicles they sell exceeds the targets – may be passed onto customers in the form of price rises in showrooms.

MORE: Car brands to pay $2.8 billion in fines by 2029 under new emissions rules, claims study

A media release published by the FCAI earlier this week cited two slow months for electric-vehicle sales – led by a 66 per cent slump in Tesla deliveries – as “placing pressure” on the CO2 rules, known as the New Vehicle Efficiency Standard (NVES).

It is the use of just two months of data that Polestar claims is an unfair sample, though it is the continuation of a trend that began in the second half of last year.

The criticism comes almost 12 months to the day since Tesla and Polestar renounced their membership with the FCAI over earlier alleged “falsehoods” it made in relation to the regulations.

“We are now two months into the Government's New Vehicle Efficiency Standard, and while the supply of battery electric vehicles has risen dramatically, consumer demand has fallen by 37 per cent this year compared with the first two months of 2024,” FCAI chief executive Tony Weber said in a media statement on Wednesday.

MORE: Polestar quits peak Australian motoring body in alliance with Tesla

“We knew the supply of EVs would increase and there are now 88 models supplied to the Australian market.

“However, our grave concern has always been the rate of EV adoption and what assumptions the Government had made in its modeling around consumer demand for EVs in the NVES. This modelling remains secret.

“The easy part is to set aspirational targets but without consumers demanding EVs, the NVES will not succeed. It is time for the Government to consider the realities faced by consumers.”

Its claims are despite demand for hybrids – which can cut fuel use by up to 50 per cent, in turn reducing emissions – growing by 43 per cent this year.

MORE: NVES explained – Everything you need to know about Australia's new vehicle emissions rules

Deliveries of plug-in hybrids – which can run on electric power for considerable distances before their petrol engines turn on – have surged by 222 per cent in 2025, following 100 per cent growth across 2024.

Polestar claims using a two-month period to judge EV sales is “too limited of a sample from which to draw conclusions,” and cites the 4.7 per cent growth in EV sales last year – compared to 1.7 per cent for all new vehicles – as proof electric-car interest is growing.

However, EV sales in the second half of last year were down 6.9 per cent.

And when Tesla’s 66 per cent drop is excluded from the 2025 year-to-date total, the electric-car market is still down 15.2 per cent.

MORE: Tesla records lowest Australian sales in two years

“Efforts to undermine this legislation will only disadvantage Australians,” Polestar Australia boss Scott Maynard said in a media statement.

“The NVES was developed to lower vehicle emissions by incentivising carmakers to offer more hybrid, plug-in hybrid, and battery electric options, and we can clearly see car brands rising to that challenge.

“By the end of the year, Australian new car buyers will have over 100 battery electric vehicles available to them.

“Over 85 per cent of the global car market has a fuel efficiency standard in place, which helps deliver improved health outcomes and reduce ownership costs. We must stay the course to see these benefits realised in Australia.”

MORE: Polestar ready to sell lifeline to other car brands struggling to meet Australian emissions rules

The Polestar boss, who told Drive the company is open to selling emissions ‘credits’ – earned as it will meet the NVES – to help other car makers who cannot, said he believed the FCAI’s stance little in the past 12 months.

“The FCAI is still calling for the NVES’ demise, or at least a significant watering down of that. And in [the] press release, all but condemned it to failure. So no, I think their deposition is still pretty clear,” he told Drive.

To the surprise of some industry observers, the FCAI has elected to include Tesla and Polestar sales data for 2025 – supplied to the Electric Vehicle Council since their exit from the FCAI – in its latest calculations.

Polestar has reported 207 new cars as sold so far this year, compared to Tesla’s 2331 – and 6978 from other brands.

MORE: Electric car sales growth in Australia hits the brakes amid Tesla slump in 2024

“They still have access to our numbers, so their commentary should still include … what they know of us selling vehicles,” said Maynard.

“You’d have to say that their official view is perhaps a little bit more insular, yeah, but it’s still clear that they’re committed to their cause. And I think that that’s a bit ignorant.”

While sales of electric cars have declined in recent months – whether in early 2025 or late 2024 – the popularity of hybrid and plug-in hybrid vehicles has grown to record levels.

MORE: Which hybrid medium SUV is the best? Hyundai Tucson v Kia Sportage v Nissan X-Trail

Many of the Federal Chamber of Automotive Industries members – which cover dozens of brands, from Toyota and Ford to Kia and BYD – have committed to rolling out waves of new hybrid and electric cars in the coming years to meet customer demand.

Among them are plug-in hybrid versions of one of Australia’s favourite vehicle types, dual-cab utes, as well as electric family SUVs at lower prices in popular categories.

“Tony [Weber] mentions 88 models now on sale in BEV [battery-electric vehicles], but if you consider the range of vehicles that would meet the standards, that’s growing and growing,” said Maynard.

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“I think it would be wise for them [the FCAI] to take a more contemporary view of market demand, the demand that’s being met by their members, and try and work towards meeting the standard rather than railing against it.”

The Polestar boss would not be drawn on a forecast for electric-vehicle sales in Australia this year, saying “there are some big players in the EV market that are being tossed around at the moment,” that is “perhaps having a heavy influence on the overall number for EVs.”

“What is clear is that there are more and more electric vehicles being offered up to enter the market this year,” he said.

“There’s more and more demand for those vehicles. There’s the anticipation of demand by manufacturers that are bringing them to our shores.”

The post Car industry body accused of ‘undermining’ Australian new-vehicle emissions rules appeared first on Drive.