Hyundai expects an exodus of brands due to new Australian emissions regulations
Australia's 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 government's 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 won't 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 Labor's win led by Anthony Albanese, there's no longer any doubt about whether it will be enforced.
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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'When it comes down to NVES, there's going to be a lot of brands that are going to start falling apart because they're burying their heads in the sand,' said Mr Romano.
'They're not doing the math, they're not looking at just how much this is going to cost them to stay in business in Australia.
'I think you're going to see an exodus. You're going to see a number of brands that finally say 'I can't 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 Government's 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.
'Let's do it like Europe, [where] they're just going, 'okay, we've got to live with it, let's deal with it'. And guess what we're 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.
'They're pushing us to move to BEVs, only us. What they're missing, not just in Australia but everywhere, is the fact that the gas [petroleum] companies aren't being pushed to put in the charging infrastructure.
'If you were to do that, I think that resurgence would push even higher. Right now we're at 20 per cent BEVs in Europe, with a much more robust charging infrastructure.
'Once you start doing that, then you start getting economies of scale, and then all the costs start to come down. At that point you're going to see all the advantages of BEVs, and they'll 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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