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While Honda Australia is in a comfortable position with NVES for now, it believes the rules will force some buyers into car-making decisions that will leave the industry worse off.
Honda Australia believes the New Vehicle Effciency Standard (NVES) – aimed at reducing fleet emissions – could have the opposite effect by keeping more polluting and less safe cars on roads for longer.
Speaking to local media, new Honda Australia President and CEO Jay Jospeh said the rules outlined by the NVES, wherein car brands will be fined for breaching ever-tightening emissions targets, will limit the choice of models that marques can bring into the country.
And with such a quick rollout and ramp-up, car brands will likely need to pass the cost of fines onto consumers – Mazda already confirmed to be doing so – leading to higher prices.
“If you make new cars unappealing by regulation, or unaffordable by regulation, you’ll almost certainly drive up the market for used cars and keep older cars on the road longer,” Joseph said.
“This may be contrary to the outcome that you want because those vehicles didn’t have emissions reductions designs or features or other things that had helped improve conditions since the days we were worried about smog 30 years ago.
“And you might actually end up in a condition where you’ve got more cars with worse fuel economy and higher emissions on the road for longer because you’ve tried to regulate taste.
“And that’s not an outcome that anybody would be really happy about because it will still be more expensive, it will be less safe … and you will have higher emissions.”
However, despite Honda’s scepticism of the NVES, the brand believes it will be safe from high-emissions fines for now as around half its sales this year have been in efficiency petrol-electric hybrid models.
At present, all its models including the Civic, HR-V, ZR-V, CR-V, and Accord are available with hybrid powertrains, but mostly only in top-spec – and pricier – variants.
From next year, more hybrid variants will rollout to the ZR-V and CR-V SUVs, and Honda predicts up to 95 per cent of its sales will be in petrol-electric powertrains by the end of 2026.
Honda is also in a unique position in not needing to factor a high-polluting model – like a V8-powered Ford Mustang or heavy-off SUV like the Nissan Patrol – into its fleet emissions total.
While the Civic Type R will be the brand’s least efficiency vehicle, it will only be available in limited numbers due to market allocation.
However, with targets tightening quickly, Honda Australia Director of Autos Rob Thorpe questioned whether the customer demand for low-emissions vehicles will be in line with government-set NVES targets.
“Any actions that are promoting emissions reductions are actions that we would, as a principle, support,” said Honda Australia Director of Autos Rob Thorpe.
“I think with the NVES emission targets, the real difficulty, practically, is balancing the consumer demand with where the targets are actually set.
“Obviously, if there is a mismatch between the target expectation and where, theoretically, the government wants the industry to look like, versus what consumers ultimately choose, what they ultimate pay money for, that mismatch, I think, is going to be there over the next two to three years.
“Meaning penalties are going to be likely in that equation.”
Tung Nguyen has been in the automotive journalism industry for over a decade, cutting his teeth at various publications before finding himself at Drive in 2024. With experience in news, feature, review, and advice writing, as well as video presentation skills, Tung is a do-it-all content creator. Tung’s love of cars first started as a child watching Transformers on Saturday mornings, as well as countless hours on PlayStation’s Gran Turismo, meaning his dream car is a Nissan GT-R, with a Liberty Walk widebody kit, of course.
