Australia waters down fuel emissions standards in blow to Tesla

CANBERRA: Australia’s government has bowed to political pressure and a growing public backlash to water down planned vehicle emission standards, handing a potential win to Ford Motor Co. and Toyota Motor Corp. at the expense of electric car maker Tesla Inc.

The new fuel efficiency standards will still come into effect on Jan. 1, 2025, as originally intended, but following consultation with the auto industry, the start date for automakers accruing debits and credits has been pushed back until July 1 that year.

In addition, the government will adjust the emissions limits for heavier cars, such as the top-selling Ford Ranger and Toyota Hi-Lux utility vehicles. Some popular four-wheel drives will also be moved into the light commercial vehicle category from the passenger vehicle category, such as the Toyota Landcruiser and Nissan Patrol, allowing them to pump out more emissions.

Industry Minister Catherine King said at a press conference in Canberra on Tuesday that the government had responded to "practical suggestions” in its consultation on the policy, and has settled on an "Australian standard for Australian consumers and Australian conditions.” She made the announcement alongside representatives from Toyota, Tesla and Hyundai Motor Co.

The center-left Labor government promised to implement fuel efficiency standards at the 2022 federal election, as part of a number of measures to crack down on Australia’s carbon emissions. Countries including the US have already had fuel efficiency policies in place for decades.

The government announced its preferred option in February, which it said would cut CO2 emissions by 369 million tons by 2050. However following the announcement, the government saw pushback from parts of the automotive industry and conservative lawmakers.

Elon Musk’s electric carmaker earlier this month quit Australia’s Federal Chamber of automotive Industries - the sector’s peak body - which had lobbied against the tougher emissions standards.

Tesla accused the group of making "demonstrably false” comments about the policy’s impact on prices. Luxury electric-car brand Polestar followed Tesla in exiting the group, claiming the FCAI was waging a deliberate campaign to obstruct Australia’s path to emissions reduction.

Sport utility vehicles and light commercial vehicles accounted for almost 80% of new-vehicle sales last year. While Tesla is making inroads into the Australian auto market - selling 46,116 vehicles last year - that’s just a fraction of the combined 303,000 vehicles Toyota and Ford delivered.