NVES is a marketing brief, not just a compliance problem

The New Vehicle Efficiency Standard came into force in January 2025, and 2026 is when it starts to bite. Passenger vehicles above 117 grams of CO2 per kilometre and light commercials above 180g/km now attract a $50 liability per gram over the limit, calculated across everything a manufacturer sells.

The first interim results gave the industry a number to look at. Across the first six months, Mazda incurred a $25.4 million liability, Nissan $10.8 million, Subaru $7 million and Hyundai $4.2 million.

Those figures are usually discussed as a compliance story. They are also, quite directly, a marketing story — because the mechanism is a fleet average, and a fleet average is just the sum of what you actually sell.

The bit that makes it a marketing problem

NVES does not ban anything. A manufacturer can keep selling large diesel utes and V8s. It simply has to sell enough low-emission vehicles alongside them to bring the average down, or hold credits, or pay.

Which means the compliance position is determined by mix. And mix is determined by demand. And demand is determined, substantially, by what gets marketed and how hard.

That is an unusual situation. Most marketing teams are asked to maximise total volume and margin. Under NVES, the business also needs volume weighted toward specific parts of the range — and those are frequently not the highest-margin, easiest-selling parts. A brand can have an excellent sales year and a worse compliance position than the year before.

There is also a timing feature worth understanding: liabilities are payable three years out, and can be reduced by selling cleaner vehicles in the interim. So an early liability is not a fine so much as a deadline. The window to market your way out of it is open, and it is finite.

What that means practically

Mix targets need to reach the marketing plan. If the compliance team knows the required mix and the marketing team is working to a volume target, those two things will diverge. The required mix has to appear in the media plan, the incentive structure and the dealer communication, or it will not happen.

The low-emission end of the range needs real support. In a lot of Australian line-ups, the hybrid or electric variant gets a fraction of the media weight of the hero ute or large SUV, because the hero sells itself. That allocation is now working against the business. The variants that improve the average need budget proportional to their compliance value, not their historical share.

Cannibalisation stops being the enemy. Ordinarily, moving a buyer from a petrol variant to the hybrid at similar margin looks like a wash. Under NVES it is a gain, and it can be a large one. Conversion between variants inside your own range is now worth measuring and worth actively engineering.

Dealer and agent incentives have to line up. A network paid on total units will sell whatever is easiest. If the mix matters, the incentive structure has to say so — and the local marketing assets have to make the low-emission variant easy to sell rather than an afterthought in the co-op kit.

The uncomfortable version

For some brands the honest position is that the current range cannot get to the target on marketing alone, and the plan is to pay or to trade credits. That is a legitimate commercial decision.

But it should be a decision, taken deliberately, with the number in front of everyone — not a default that emerges because nobody connected the compliance model to the media plan. The brands that will handle the next three years best are the ones treating mix as a marketing KPI right now, while the liability is still a forecast rather than an invoice.

Sources

• Mazda, Nissan, Hyundai and Subaru face multi-million-dollar penalties under NVES, ABC News
• Major carmakers incur millions in fines in first NVES emissions results, NRMA
• Australia’s New Vehicle Efficiency Standard FAQ, Department of Infrastructure and Transport
• How NVES will change the new car market, carsales