Australias stringent new vehicle emissions regulations are set to send a host of auto brands running from these shores, according to local Hyundai chief Don Romano.
The ink officially dried on the federal governments New Vehicle Efficiency Standard (NVES) at the start of this year, bringing with it legislation designed to reduce the carbon footprint of the Australian car market. While the NVES came into effect on January 1, 2025, penalties wont start being accrued until July 1.
The recent federal election brought with it some uncertainty about the NVES, with former Liberal leader Peter Dutton promising to scrap the legislation. However, in the wake of Labors win led by Anthony Albanese, theres no longer any doubt about whether it will be enforced.
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Speaking to CarExpert at the launch of the pint-size Hyundai Inster electric SUV, Mr Romano said that many automakers will be caught off guard by the punitive new regulations.
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Supplied Credit: CarExpert When it comes down to NVES, theres going to be a lot of brands that are going to start falling apart because theyre burying their heads in the sand, said Mr Romano.
Theyre not doing the math, theyre not looking at just how much this is going to cost them to stay in business in Australia.
I think youre going to see an exodus. Youre going to see a number of brands that finally say I cant do it, unless the government that we just re-elected makes the decision to go in a different direction, which I think is unlikely given the election results.
Hyundai has backed the NVES from early in the piece, expressing confidence in meeting the Australian Governments tightening CO2 targets between 2025 and 2029. However, some of its rivals have been less supportive and others including Toyota have indicated that fines would ultimately be passed onto consumers in the form of price hikes.
Having taken over as Hyundai Australia CEO just a few months ago, Mr Romano will lead the brand in its response to NVES with a focus on electric vehicles (EVs) and other future energy initiatives.
Supplied Credit: CarExpert Lets do it like Europe, [where] theyre just going, okay, weve got to live with it, lets deal with it. And guess what were seeing right now in Europe? A resurgence in EVs, he said.
While Hyundai is prepared to tackle tightening emissions regulations, Mr Romano still sees significant room for improvement in how policy is used to accelerate the transition towards greener forms of transport.
What the government is doing is half-baked, he concluded.
Theyre pushing us to move to BEVs, only us. What theyre missing, not just in Australia but everywhere, is the fact that the gas [petroleum] companies arent being pushed to put in the charging infrastructure.
If you were to do that, I think that resurgence would push even higher. Right now were at 20 per cent BEVs in Europe, with a much more robust charging infrastructure.
Supplied Credit: CarExpert Once you start doing that, then you start getting economies of scale, and then all the costs start to come down. At that point youre going to see all the advantages of BEVs, and theyll be less expensive ultimately than an ICE vehicle.
The only way to get there& is to have a more robust charging infrastructure that engenders a lot of confidence in buyers to buy.
Less than one in 10 vehicles sold in Australia last year were EVs (91,292 of more than 1.22 million), although that number was up 4.7 per cent on the previous year.
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