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News - MazdaPrice hikes to fund NVES penalties: MazdaBEVs and hybrids will arrive too late to save Mazda CO2 fleet average from NVES fines3 Jun 2025 By TOM BAKER AUSTRALIANS wanting to buy a vehicle without heavy electrification are likely to face increased prices as car-makers account for penalties issued under the federal government’s New Vehicle Efficiency Standard (NVES), according to Mazda Australia managing director Vinesh Bhindi.
Now being enforced, NVES works by holding car-makers to annual ‘fleet average’ CO2 limits. The official CO2 emissions of every vehicle delivered by the manufacturer each year are divided by the total number of units sold to determine the fleet average.
For Mazda, plug-in hybrids (PHEVs) like the CX-80 P50e (64g/km CO2) are quite helpful but high-emission internal combustion engine (ICE) utes like the BT-50 diesel (207g/km) drag the fleet average up, the latter almost in breach of the 2025 limit on light commercial vehicles.
Alarmingly for Mazda, its best-seller, the petrol CX-5, is already in breach of the 141g/km 2025 limit for cars and SUVs, producing between 161-191g/km depending on powertrain.
Until a hybrid (HEV) CX-5 lands in 2026, each ICE CX-5 sale increases Mazda’s odds of a first-year NVES penalty.
If a car-maker’s fleet average emissions are above the NVES limit, the car-maker will be issued a fine of $100 per gram of CO2 over the limit per vehicle sold. The 2025 limit is 141g/km for cars and SUVs and 210g/km for light commercial vehicles and body-on-frame 4x4 SUVs with towing capacity exceeding 3000kg, progressively tightening to 58g/km and 110g/km respectively in 2029.
If CO2 emissions of ICE vehicles cannot be offset by BEV, PHEV and HEV sales, “that would mean there is a cost,” Mr Bhindi told GoAuto.
“Whether that is passed on (to the customer) or not is a brand’s decision … it is only a matter of time before they are forced into (raising prices), because there is no other way.
“This may add significantly to cost of living issues,” Mr Bhindi warned.
“Fines for (ICE) technology are the only things at play. Whether there are (BEV purchase) incentives or softer pathways, those options are available for the government to consider.”
If a car-maker’s fleet average emissions are under the NVES limit in a given year, they are awarded credits, which can be traded (sold) within two years to car-makers that would otherwise be in breach – effectively creating a market for vehicle carbon credits, rewarding all-electric brands like Tesla and Polestar.
Not all car-makers are under as much pressure to increase prices as Mazda. Brands that already sell a high proportion of BEV, PHEV and HEV models in Australia, such as Hyundai, have told GoAuto that an NVES penalty is likely to be avoided, at least in Year 1 (2025).
The biggest problem for manufacturers under NVES is selling too many high-CO2 utes. Long a high-margin cash cow for distributors in Australia, reliance on diesel pick-ups has come back to bite.
Life is not cruisy at Toyota Motor Company Australia (TMCA). Even a decision to force car and SUV buyers into lighter-CO2 HEV powertrains (107g/km for a RAV4) will struggle to fully offset the preponderance of HiLux, Prado, and LandCruiser sales at >200g/km emissions apiece.
The common problem for Toyota and Mazda is a failure to tempt Australians into BEV offerings, with Tesla reportedly claiming Mazda as its biggest conquest brand based on the vehicles it gets traded in against the Model 3 and Model Y.
While BEV demand has stagnated at less than 10 per cent of the market, the Toyota bZ4X electric SUV is drastically underperforming against the Tesla Model Y. Mazda withdrew its compact MX-30, which had an all-electric option, from Australia some time ago.
Meanwhile, marques like Hyundai, Kia, BMW, MG and Cupra have established a reasonable trade in BEVs – with each BEV’s 0g/km official score helping those brands to sell additional internal combustion vehicles without copping NVES fines, while BYD started out all-electric but has achieved sales success by adopting PHEV tech as it expands its line-up into key segments.
Mazda is understood to be working with ute collaboration partner Isuzu on various electrification options for the BT-50, while a business case is almost finished to bring the BEV Mazda 6e sedan to Australia. A more relevant CX-6e electric medium SUV should follow; all would bring a level of NVES relief.
“We want to hold (our) offering as long as there is demand for it,” Mr Bhindi said in relation to Mazda’s broad (and ICE-rich) range.
“Then we will work out how these fines impact the pricing (and) the business.
“But the key element in this is that electrified powertrains must improve from their current (state). If (EV demand) stagnates at six, seven, even 10 per cent, it is simple maths. It is not enough to offset all of this.”  Read more2nd of June 2025  Mazda looks to value after premium experimentLower pricing for six-cylinder SUVs reflects a rejection of ‘Mazda Premium’ strategy26th of May 2025  Mazda 6e, CX-6e under review for AustraliaMazda 6e, CX-6e under review for Australia26th of May 2025  Mazda Australia gently pursuing rental, fleet salesGovernment, corporate and rental sales in Mazda’s sights, but resale is a factor |
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