New research shows car owners can save $10,000 with strong fuel efficiency standards

New modelling commissioned by the Climate Council and the Electric Vehicle Council shows that Australians can save up to $1,200 per year on vehicle running costs if the federal government delivers strong fuel efficiency standards.

The study says that an effective and competitive standard can save consumers up to $10,000 over a vehicle’s lifetime.

The report titled Raising standards, cutting costs found that Australians could collectively share in up to $13.6 billion in net benefits by 2035 from reduced vehicle running costs, cleaner air and less environmental damage with well designed fuel efficiency standards.

The study shows that strong fuel efficiency standards would result in up to 31 million fewer tonnes of harmful pollution over the next decade and rapidly increase the number of low and zero emissions vehicles available to buy.

The Climate Council says Australia is lagging behind as one of the only wealthy countries lacking fuel efficiency standards, which already cover 80 percent of the global car market.

“This modelling underlines that a strong fuel efficiency standard will deliver huge benefits for Australians in cheaper running costs for vehicles, while also reducing pollution and climate harm from transport emissions,” said Climate Council head of advocacy, Dr Jennifer Rayner.

“This means Australians can keep more of their hard-earned cash – instead of watching it rapidly drain away at the petrol bowser.

“Australia cannot remain a dumping ground for expensive, polluting vehicles that cost our hip-pockets, health, and environment. Every day we wait to put in place strong fuel efficiency standards means Australians are paying more than they should for fuel, and pumping out more harmful pollution.”

The Climate Council says that strong vehicle efficiency standards should:

Set Australia on a strong pathway to a zero emissions fleet – with the objective of all new vehicles sold being zero emissions by 2035 at the latest
Align with other car markets like New Zealand, the United States and Europe as a minimum – so Australia moves up the queue for cleaner, cheaper vehicles
Deliver genuine reductions in emissions from new cars sold in Australia – avoiding credits and loopholes that undermine their effectiveness
Are mandatory and legislated – auto manufacturers shouldn’t be able to opt out
Start as soon as possible – every new vehicle sold today will likely be on the road for at
least the next 10 years, so we cannot delay.

The study shows that new passenger vehicles sold in Australia on average have 50% higher emissions that vehicles sold in the EU and 23% higher than vehicles the US.

New light commercial vehicles sold in Australia have 40% higher emissions than the EU and 25% higher than the US.

The report notes that in April the US proposed a new, more stringent standard for light vehicles sold from 2027 building on strong standards already in place for new vehicles sold up to 2026, further reducing fleet emissions by 56 per cent.

“New Zealand mandated their first efficiency standard more recently in 2022. These standards have been set to catch-up with the US and EU by 2027,” states the report.

“In stark contrast, Australia has a voluntary standard in place. This standard falls significantly short of the progress achieved by other nations. By 2030, Australia could find itself between 92% to 154% behind global peers.”

While Australia lags behind the EU, US and New Zealand the picture looks even worse when Australia’s average new vehicle emissions are compared to Norway’s.

Thanks to Norway’s strong EV policy, in May average new car emissions dropped to just 16 g/km. The Norwegian figure is ten time lower than average new vehicle emissions in Australia which was 164 g/km in 2022.

Graphing the Australian and Norwegian average new vehicle emissions over the past 20 years shows just how far behind Australia is from the gold standard Norway where plugin vehicles made up 91% of all new cars sold in May.

The study also shows how additional spend on new EVs is far outweighed by massive fuel and maintenance savings providing a $13.6 billion net economic benefit to Australians by 2035.