What Australia’s New Vehicle Efficiency Standard means for caravanners

The Australian government’s proposed New Vehicle Efficiency Standard (NVES) is going to throw the cat among the pigeons at an industry level, but what will it mean for caravanners?

There are a number of key factors still at play, but the short answer is it’s likely to lead to a wider and cheaper range of the latest battery-electric and plug-in hybrid vehicles, including more arriving down under that are suitable for towing larger caravans – plus more expensive internal combustion models, especially the utes and large SUVs that are currently used by many people to tow their caravans around the country.

To summarise the key elements of the government’s preferred NVES option, car-makers would be issued with an increasingly stringent – year-by-year – blanket emissions target to meet across their product portfolio, and heavily fined if they exceed those targets.

In contrast, those who meet and or comfortably beat their targets will receive credits that can be used to offset potential fines or traded with another manufacturers for capital.

The first of these targets are earmarked to be implemented on January 1, 2025 and will be pegged at 141 grams of CO2 per kilometre (g/km) for passenger cars and SUVs, and 199g/km for light commercials, before dropping by 12.2 and 12.4 per cent respectively per annum down to 58g/km and 81g/km.

Specifically intended to drive the local take-up of more efficient vehicles, the strategy should see an influx of new low- and zero-emissions vehicles from a wide range of auto brands, including those without any or many such models now – think Isuzu Ute, Ford and General Motors.

It should also spur the accelerated electrification of key model lines like the Toyota LandCruiser, Prado, Fortuner, Ford Everest, Mitsubishi Pajero Sport and Isuzu MU-X, given the bulk of these models are derived from light commercial vehicles yet will be subject to the stricter passenger vehicle standards.

Deployment of such electrification technologies will undoubtedly cost OEMs millions and so price premiums are likely to be passed onto consumers in order to maintain profit margins. And if a car-maker fails to meet the standard, it gets slugged a massive fine – specifically $100 for every gram of CO2 over the limit for every every sold.

By 2029 that could equate to a $17,000 fine per vehicle for the LandCruiser and $10,000 per Ford Ranger based on the their current fuel consumption and emissions.

Despite the pressure coming for its light commercial and off-road SUV line-up and the fact it’s only just released an EV locally, market leader Toyota Australia has welcomed the NVES announcement although it is now calling for the federal proposal to be changed and is threatening to pass on all emissions fines to customers.

“Toyota welcomes the policy certainty of an ambitious fuel efficiency standard,” Toyota Australia marketing chief Sean Hanley said.

“Nevertheless, the proposed transition we are seeing right now, the timing of that trajectory is too quick, especially for large SUVs and light commercial vehicles.

“It simply doesn’t recognise the technical hurdles, the lengthy times and the substantial cost of delivering commercial BEVs that are practical, that are capable and, above all, that are affordable.

“We just need time to make the adjustments.”

On the other hand low-emission brands and especially EV brands like Tesla, BYD and Polestar, will be able to trade (sell) their inevitable abundance of credits to other brands, potentially making them more profitable.

If they pass on those profits to consumers that will result in lower retail prices for their vehicles, which would be a big win for Aussies given purchase price is the biggest barrier to electrification uptake.

This in turn should accelerate the expansion and improvement of Australia’s EV charging network, reducing range anxiety – the other big worry for consumers considering an EV.

What will all that mean for caravanners?

The top three best-selling new vehicles in Australia in 2023 were diesel utes which just happen to be among the tow vehicles of choice for many owners of caravans weighing up to 3500kg.

In the absence of a step-change in ute powertrains, a New Vehicle Efficiency Standard (NVES) that better aligns Australian vehicle efficiency standards with those of ‘developed’ nations will mean that the emissions of these diesel utes will need to be offset by sales of more efficient vehicles. Or alternative emissions credits purchased. Or the cost of meeting NVES requirements (ie: paying fines) passed on to consumers.

Whichever is the case, it’s highly probable the salad days of the dual-cab 4x4 ute as both Australia’s alternative family car and Grey nomad-mobile will soon be a memory.

The Caravan Industry Association of Australia has also raised a number of concerns around any accelerated push for EV adoption.

"With a (current) lack of appropriate vehicles to tow caravans for longer distances, there is a high degree of concern that the current and emerging technology of EVs cannot yet provide the performance and range that travellers require.  Most current EVs have limited battery capacity and driving range when under load," CIAA said in an online statement.

The peak national body is calling for a government-backed "national EV charging network that covers all regions and routes and caters to the specific needs of caravan and camping travellers, such as larger parking spaces, higher power outputs and longer dwell times".

"While we acknowledge the government’s commitment to invest in EV charging infrastructure across the country, we are concerned that the current and planned network is insufficient to meet the needs of travellers, especially in regional and remote areas."  

The CIAA also referred to a recent study by the Australian Automobile Association, which found the average driving range of an EV when towing a caravan was only 100km, compared to 500km for a petrol or diesel vehicle. 

"This means that EVs would need to recharge more often and for longer periods, significantly increasing travel time and cost for travellers," the peak body said. 

"We are not opposed to a low-emissions environment or electrification. Still, we believe there is no clear path forward for regional dispersal and the caravan industry under the current policies."