Climate Council expects significant fuel savings under proposed NVES

The federal government showed three possibilities for its New Vehicle Efficiency Standard (NVES) and is taking final feedback ahead of announcing its strategy.

One of the benefits claimed is savings on fuel, with more efficient vehicles proposed to save an average of $5710 over five years and $17,000 over the life of a vehicle, according to the government which has yet to release its modelling.

The Climate Council [↗] has investigated the potential of more fuel-efficient cars in Australia and found that buyers could save big on fuel bills, but perhaps not quite as much as the government is promising.

For new passenger cars, the average consumption in Australia is 6.9L/100km which compares rather unfavourably to Europe’s 3.5L/100km fleet average.

In the government’s preferred middle ground, new car sales here will be at that figure by 2027 and is better than the softest standard's final goal of 99g CO₂/km.

The Climate Council notes Aussies could save $720 per year if we match Europe’s fleet average while catching up with the US saves a still-significant $520 annually on fuel.

The modelling promises even bigger savings for light commercial vehicles, with the Climate Council calculations showing a $1105 saving for matching the US fleet (6.1L/100km) and $1250 for equalling the EU (5.6L/100km).

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How Australia's passenger vehicle fleet emissions compare | Source: Climate Council

In Australia where dual-cab utes are popular and necessary for more tasks, it may prove tricky to match Europe’s low emissions from our current 9.9L/100km.

The Climate Council sites the Isuzu D-Max as an example, as the ute only sold in the UK and Europe with an ‘RZ4E’ 1.9-litre engine that achieves 6.7L/100km.

This is a skewed comparison as to get the 3500kg towing capacity Australians demand, buyers need to opt for the 3.0-litre ‘4JJ3-TCX’ mill that consumes 8L/100km, emits 207g CO₂/km and makes up the lion’s share of Aussie sales.

Still, it’s damning that Australia remains so far behind the United States considering that market’s best-selling vehicle is the Ford F-150 full-size pick-up.

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How Australia's light commercial vehicle fleet emissions compare | Source: Climate Council

Will the NVES affect new car prices?

We won’t know until the government releases its strategy and charges but the Federal Chamber of Automobile Industries (FCAI) says any tax attracted by polluting vehicles is likely to be passed onto the customer by OEMs.

The FCAI warns that penalising emissions will therefore increase the price of vehicles that are popular today, such as utes and petrol family-sized SUVs.

However, the Climate Council denies this quite fiercely and notes that vehicle emissions standards have been in place the world over for years. In a global sense, then, manufacturers are well-versed in making more efficient vehicles including 4x4s and commercial vehicles.

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Manufacturers such as Hyundai will have an easier time than some thanks to existing EV and hybrid knowledge

What may suffer, at least initially, is the lag between standards being put in place and the reaction from manufacturers.

Brands with ranges concentrated on utes and SUVs or without significant hybrid offerings, such as Isuzu and Subaru, may struggle to meet targets initially.

Some, such as Volvo, have already made their promises while Volkswagen (also in a good position) will focus mostly on EVs and existing powertrains, choosing not to offer efficient new-gen plug-in hybrid and three-cylinder powertrains in its Golf small car range locally.