Buying a new car in Australia just got a little more interesting. From 1 July 2025, a new set of rules called the New Vehicle Efficiency Standard (NVES) came into effect, and while it’s aimed at car manufacturers, not you, it’s going to change the types of cars available on Australian roads, potentially save you thousands at the bowser, and give you more choice than ever before. Here’s everything you need to know.
Read more: Australia’s NVES credit registry shows early leaders emerging
What is the New Vehicle Efficiency Standard (NVES)?
The New Vehicle Efficiency Standard is an Australian Government initiative introduced under the New Vehicle Efficiency Standard Act 2024. Put simply, it sets carbon dioxide (CO₂) emissions targets that car manufacturers and suppliers must meet for the new vehicles they bring into Australia.
Think of it like a report card for car companies. Each manufacturer has to keep their average emissions across their entire fleet below a set limit, and that limit gets stricter year by year. If they sell a gas-guzzler, they need to offset it by selling more efficient models.
The NVES covers all new passenger and light commercial vehicles up to 4.5 tonnes gross vehicle mass (GVM), so that includes SUVs, sedans, utes, vans, and 4WDs.
Read more: Toyota, BYD and Tesla lead as NVES reveals stark industry divide
When did the NVES start?
The NVES Act officially came into effect on 1 January 2025, but the compliance obligations, meaning car companies actually being measured and held accountable, began on 1 July 2025.
So if you’re shopping for a new car right now, you’re already buying in an NVES environment.
Read more: Australia’s NVES is driving positive results already
Why did Australia introduce the NVES?
Australia is committed to reaching net-zero emissions by 2050. Transport is currently responsible for 22.4% of the country’s emissions, and light vehicles make up a whopping 71% of that transport figure. That’s a big chunk of emissions coming from everyday cars and utes on Australian roads.
Until the NVES, Australia was one of the few developed nations without a fuel efficiency standard. Over 85% of the global car market, including the EU, USA, New Zealand, China, India, and Japan, already had similar rules in place. We were simply late to the party.
The good news? By 2050, the NVES is projected to deliver to Australians:
- Around $95 billion in fuel savings
- Around $5 billion in health savings (from reduced air pollution)
- Improved fuel security for the country
Read more: First NVES results show industry meets 2025 targets
What does the NVES mean for you as a car buyer?
You get more choices, more efficient vehicles, and more savings, without being told what you can or can’t buy. Car manufacturers are still free to sell any type of vehicle – utes, SUVs, 4WDs, sedans, vans, you name it!
But they’ll need to balance their lineup by offering more fuel-efficient options alongside the heavier, thirstier models. That means:
- More hybrid and electric vehicles are hitting dealerships
- More fuel-efficient petrol and diesel options across all vehicle types
- Greater price competition in the EV and hybrid space
- Long-term savings on fuel costs for everyday Australians
And for the 70% of Australians who buy second-hand? As more efficient vehicles enter the new car market, they’ll eventually flow through to the used car market too, meaning cheaper-to-run cars will become more accessible for everyone.
Will I still be able to buy a ute or 4WD?
Yes, absolutely. This is one of the most common questions we hear, and the answer is a firm yes.
The NVES does not ban any vehicle type. Utes, 4WDs, SUVs, and tow-capable vehicles remain on sale. In fact, in every other country that has introduced similar standards, like the USA, New Zealand, and the EU, utes and 4WDs remain popular and widely available.
What will change over time is that these vehicles will gradually become more fuel-efficient as manufacturers invest in better technology. Think hybrid utes, more efficient diesel engines, and eventually, electric 4WDs with serious towing capability.
How does the NVES work for car brands?
Car companies and suppliers (called “regulated entities” under the Act) are measured against a CO₂ emissions target across all vehicles they supply to the Australian market in a given period.
If a manufacturer beats the target, they earn credits (called “units”). If they fall short, they can either bring in more efficient vehicles or buy units from other manufacturers who have surplus credits, or, if they still don’t meet the target within two years, pay a financial penalty.
The targets are set until 2030 and will become progressively stricter over time, pushing the industry towards cleaner, more efficient vehicles year on year.
How can I check a car’s emissions and fuel efficiency?
The Australian Government’s Green Vehicle Guide (GVG) is your go-to tool. It covers new light vehicles up to 3.5 tonnes sold in Australia since 2004 and lets you search and compare vehicles by CO₂ emissions and fuel consumption.
It’s a free, easy-to-use resource and a great starting point when you’re researching your next purchase. You can find it at greenvehicleguide.gov.au.
The bottom line
The New Vehicle Efficiency Standard is a genuine win for Australian car buyers. It means more choice, a wider range of fuel-efficient vehicles across all segments, including utes and 4WDs, and real long-term savings on fuel and running costs.
You won’t notice any dramatic changes at the dealership overnight, but over the coming years, you’ll see a broader mix of efficient models at every price point in every category.
Thinking about your next vehicle purchase? Explore our latest new car listings to see the most fuel-efficient options available on the market right now.
Comments
New Comment