Mazda Warns New Emissions Fines Could Hit Entire Auto Industry
Synopsis
The automaker says rising emissions compliance costs may not be limited to individual brands, with industry-wide impacts possible if EV sales fail to increase.
Australia's New Vehicle Efficiency Standard (NVES) is already causing disruption across the country's car industry and Mazda Australia said a tighter vehicle emissions standard will soon impact most other carmakers.
The federal standard will make many carmakers comply at the same rate but any increase in cost would be a last resort, said Vinesh Bhindi, Mazda Australia's managing director, while other ways will be explored to comply with the regulations.
Industry Braces for Higher Compliance Costs
The NVES will come into effect on 1 January 2025 and place an upper limit on the carbon dioxide an average vehicle in a car maker's Australian fleet can emit that year. Makers whose average is higher than the set amount will need to buy credit from manufacturers with lower emitting fleets or risk monetary fines.
The shift has been more challenging for car brands that primarily sold petrol SUVs and utes "as the acceptance rate of the battery-electric vehicle has been slower than what we anticipated," he said. But it was not just a Mazda concern and would likely impact most carmakers in the country.
New car sales from electric vehicles in Australia were 7.4% in 2024, down from 8.4% in 2023 even with increased EV models available, according to data from the Federal Chamber of Automotive Industries (FCAI). Car companies would need a boost in consumer demand in order for them to be on the required levels of emissions reductions over the next few years, car industry organizations believe.
Australia to mirror global emission standards
In relation to other global automotive markets Australia is one of the few that does not yet have a vehicle efficiency standard in place but similar fleet emission rules exist in Europe, US, Canada, Japan, South Korea and New Zealand. These standards all mandate a cut to average vehicle emissions sold by a car maker.
The NVES has been implemented by the Australian Government to achieve reductions in Australia's 21% of total national greenhouse gas emissions produced by the transportation industry, says the Department of Climate Change, Energy, the Environment and Water.
As for the popularity of the car maker, according to FCAI VFACTS, Mazda sold the fourth-largest number of vehicles in Australia for 2024 with sales of 95,987 units.
For the financial year ending March 31, 2025, global Mazda Motor Corporation reported net sales of 5.02 trillion and net income of 114.1 billion which indicates a stable demand for its products worldwide, especially in major markets.
Adding that the Mazda Australia boss was looking into optimizing the carmaker’s portfolio to accommodate lower emission products. If I have to impose costs on customers, I’d look for other solutions.
Source: The West Australia
Follow Inspirepreneur Magazine for daily global business news.
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
