The Coalition’s claim cars will be more expensive as a result of the New Vehicle Efficiency Standard (NVES) has come under scrutiny because at least one of the opposition’s headline figures is based on a car no longer on sale.
The revelation casts doubt on a key Coalition election proposal to eliminate penalties for cars that emit CO2 beyond regulated limits to ensure “Australians save thousands when buying a new car”.
Investigations by Guardian Australia have revealed the Toyota RAV4 – a car model that the Coalition claimed in a media release is set to cost $9,700 more as a result of incoming penalties – is a discontinued model.
The Liberal party says the $9,700 figure came from “industry analysis” supplied by the Federal Chamber of Automotive Industries, the peak industry body that has been lobbying against strict emissions penalties due to come into effect in July.
Senator Bridget McKenzie, the shadow minister for infrastructure, transport and regional development, deflected to the government, claiming it had “never released the modelling to justify the carbon emissions targets and penalties underpinning its family car and ute tax”.
“The Coalition is confident in the data showing the cost of Labor’s family car and ute tax by 2029 would be up to $9,700 for a RAV4 or $14,400 for a Ford Ranger based on current models,” McKenzie said in a statement.
However, the RAV4 in question has been discontinued.
The FCAI confirmed the particular RAV4 used in the modelling – until recently the thirstiest of the vast RAV4 lineup – was no longer on the market.
Misleading claims
The Coalition’s claims about more expensive RAV4s are, in short, wrong.
Toyota would have known that (carmakers have crunched all the numbers about the effects of NVES) and the FCAI would also have known that. Yet clearly neither entity was keen to point that out, possibly because the Coalition is promising to scrap the hefty penalties.
The numbers are wrong because the particular car that was used to crunch the numbers – a non-hybrid RAV4 with a 2.5-litre engine – is no longer on sale. Its CO2 emissions according to the mandated government test are 159g/km.
All RAV4s are now powered by a more frugal hybrid drivetrain that emits as little as 107g/km of CO2.
That move to go hybrid-only for the RAV4 made them more expensive, but it also made them more popular as drivers favoured lower running costs. It was reflective of low demand for the petrol-only models, suggesting most buyers were happy to pay more to realise fuel savings that in many instances could pay back the price premium within a few years.
In the first three months of this year, the RAV4 has been the top-selling car in the country.
The perfect scare campaign
Since early 2024, the FCAI has been warning of the potential for dramatic price rises on popular models as a result of NVES penalties.
Last year it published figures that showed the Ford Ranger could attract penalties of between $11,350 and $17,950 when the strictest NVES emissions came into play in 2029, something the Coalition has not pointed out in its latest media blitz.
Back then, it was claimed the RAV4 would attract penalties between $4,460 and $11,020, depending on the model.
The figures published last week by the Coalition – using 2024 data based on 2023 models as supplied by the FCAI – have now adjusted those figures to up to $9,700 for the RAV4 and $14,400 for the Ranger (the FCAI says the change is because a RAV4 model that was even thirstier was discontinued earlier).
Since the publication of the FCAI modelling last year, electric car brands Tesla and Polestar have quit the FCAI in protest.
Tesla circulated a scathing letter at the time claiming the FCAI had “repeatedly made claims that are demonstrably false”.
Tesla added it was “concerned that the FCAI has engaged in behaviours that are likely to mislead or deceive Australian consumers”.
More to the story
Tesla’s criticism underscores the issue. While a car may exceed CO2 emissions limits, it doesn’t mean it will cost more.
Indeed, Toyota has made that point on multiple occasions.
The NVES is a complex scheme that allows carmakers to offset thirsty cars with more fuel-efficient ones. If someone still wants to buy a diesel ute or a petrol performance car in future, they can – and it doesn’t have to cost more.
Toyota plans to boost its EV sales significantly, in part to offset models such as the Tundra ute and LandCruiser four-wheel drive.
Early in 2025, Toyota Australia’s vice-president of sales, marketing and franchise operations, Sean Hanley, reinforced the NVES would not alter the brand’s available models. He also said it may not make any of those cars more expensive.
“What we will be trying to do is offset any penalties we get with EVs, hybrids and any technologies we have on the horizon,” Hanley said in January.
Asked whether prices would increase, he said: “The market is so competitive that you may not be able to do that. You never rule [out] that prices may need to rise at some point, but that would be a last resort.”
The FCAI’s sometime alarming penalties – turned into price rises by the Coalition – also don’t take into account anticipated improvements to cars over the next four years. Brands naturally improve their wares.
A new RAV4 is due for release in the next year or so with the expectation of improved fuel efficiency as well as the likely inclusion of a plug-in hybrid or EV variant.
And … Toyota wants fuel efficiency standards
Toyota – Australia’s biggest car brand by far – doesn’t expect any major effect on model line-ups and pricing from the NVES until 2029 or 2030 at the earliest.
Hanley was last month quoted as saying Toyota was at least four years away from any financial impact.
He added that “any commentary around NVES right now, it’s just speculation”.
Presumably that also includes claims by political parties.
Toyota has also repeatedly said it wants efficiency standards to encourage lower-emissions vehicles.
Yep – the brand that pumps out LandCruisers, Prados and Hiluxes is supportive of standards in place to make vehicles more fuel-efficient, making them cheaper to run.
That said, along with the FCAI and others legacy carmakers, it is calling for a delay in the penalties to make compliance easier.
