
Australia's New Vehicle Efficiency Standard incentivises car manufacturers to supply cleaner and cheaper-to-run cars.
What is the New Vehicle Efficiency Standard?
The New Vehicle Efficiency Standard (NVES) commenced on 1 January 2025.
Under the NVES, each regulated entity (such as car manufacturers and suppliers that hold a vehicle type approval) has a set average CO2 emissions targets (emissions targets) for all new cars they supply, which they must meet or beat. Over time, the emissions targets are lowered meaning regulated entities are incentivised to provide more choices of fuel-efficient, low or zero emissions vehicles to the Australian market.
The NVES applies only to some new vehicles being sold in Australia from 1 July 2025. These are, light passenger vehicles such as sport utility vehicles (SUVs) and sedans and light commercial vehicles, such as utility vehicles (utes) and vans.
The target is applied nationally on average. Entities can still sell any vehicle type they choose, including sedans, four-wheel drives, utes and vans, but they’ll need to sell more efficient models to offset any less efficient models they sell.
Currently, transport makes up 22.4% of emissions in Australia, with light vehicles contributing 71% of transport emissions. Australia is committed to net-zero emissions by 2050, as part of our obligations under the Kyoto Protocol and the Paris Agreement. The NVES will help Australia to achieve its net-zero objective by 2050.
You can learn more about the development of the NVES by reading the work to date.
How does the NVES affect me?
Under the NVES, you have more choice of fuel-efficient, low or zero emission new cars. Over time, this technology will also become available in the second-hand market where 70% of Australians buy their cars. This means that a growing number of Australians will have access to cheaper-to-run cars and savings at the petrol pump.
By 2050, the NVES aims to deliver Australians around $95 billion in fuel savings, $5 billion in health savings, and improved fuel security. Australians who are in the market for a new car will also have a greater choice of cars which are more fuel-efficient and better for the environment.
What are the next steps?
The Australian Government has established a new regulator, the NVES Regulator, to oversee its operation. Read more about the regulator and key dates by visiting their website.
Find out more
- Read our frequently asked questions
- Visit the NVES Regulator website
- Sign up for news and updates
- Visit the Green Vehicle Guide for data and tools that can help you to understand a vehicle's environmental impact.