NVES explained: What Fleet Managers need to know

The New Vehicle Efficiency Standard (NVES) is Australia’s first national fuel-efficiency and emissions standard for new vehicles. It is established under the New Vehicle Efficiency Standard Act 2024 and sets average CO₂ emissions targets for new vehicles entering the Australian market from 1 July 2025.

The NVES applies to:

• Light passenger vehicles (cars, SUVs)
• Light commercial vehicles (utes and vans up to 4.5 tonnes GVM)

Emissions are measured in grams of CO₂ per kilometre (g/km) and targets tighten each year from 2025 to 2029.

Who does the NVES regulate?

This is a critical point for fleets.

Fleet operators are NOT regulated under the NVES.
The NVES applies only to:

• Vehicle manufacturers, importers and suppliers
• Entities that hold a vehicle type approval and enter vehicles on the Register of Approved Vehicles (RAV)

Fleet managers, leasing companies, dealers and end-users have no compliance obligations under the NVES.

What is the NVES trying to achieve?

According to the regulator, the NVES is designed to:

“Reduce car emissions and deliver a more fuel-efficient future for Australia.” 

The legislation aims to:

• Reduce transport emissions (light vehicles account for ~71% of transport emissions)
• Increase the supply of fuel-efficient and low-emissions vehicles
• Improve fuel security
• Lower running costs for motorists over time
• Improve air quality

How does the NVES work?

Each regulated entity must meet an average emissions target across all vehicles they supply in a given year.

Key features:

• Targets get lower each year (for both passenger and light commercial vehicles)
• High-emitting vehicles can still be sold
• Lower-emission vehicles offset higher-emission ones across a brand’s total sales mix
• Battery-electric, hybrid and very efficient vehicles help manufacturers beat the target

If a manufacturer beats its target, it earns NVES units.
If it misses the target, it must:

• Earn units in later years,
• Buy units from another manufacturer, or
• Pay a financial penalty

What does this mean for fleets?

While fleets are not regulated, the NVES will shape the market fleets buy from.

Over time, Fleet Managers should expect:

• More choice of low-emissions vehicles in all major segments
• Faster rollout of EVs, hybrids and more efficient ICE models
• Increased pressure on OEMs to prioritise lower-emission variants
• Greater alignment between emissions performance, Whole-of-Life Cost (WOLC) and procurement decisions

Importantly, the NVES does not ban utes, vans, 4WDs or towing-capable vehicles. Instead, it pushes manufacturers to improve efficiency across their range.

What the NVES does not do

For clarity, the NVES:

• Does not regulate fleet operators
• Does not force fleets to buy EVs
• Does not apply to vehicles over 4.5 tonnes GVM
• Does not restrict customer choice
• Does not set vehicle prices or mandate technologies

Why Fleet Managers should pay attention

The NVES is a supply-side policy, but its impacts will flow directly into:

• Model availability
• Lead times
• Powertrain mix
• Residual values
• Emissions reporting and ESG strategies

In short, the NVES will increasingly influence what vehicles are offered to fleets, even though fleets are not directly regulated.

• 
  No Plug, No Fuss: Jaecoo J5 Hybrid Arrives
  Jaecoo has completed its J5 compact SUV range with the arrival of a new hybrid model, giving Australian buyers a middle ground between the existing petrol and fully electric versions. For Fleet Managers and novated lease buyers, the key attraction is straightforward: lower claimed fuel consumption without needing to organise workplace, depot or home charging.
• 
  GVM, payload and axle weights: Choosing the right Hyundai STARIA Load for the job
  When Fleet Managers compare light commercial vehicles, engine outputs and fuel economy often dominate the discussion. Yet one of the most important specifications sits further down the data sheet—vehicle weight. Gross Vehicle Mass (GVM), payload, axle capacities and tare mass determine what a van can legally carry and how suitable it is for different applications.
• 
  New Mazda CX-5 Sets ANCAP Safety Benchmark
  The next-generation Mazda CX-5 will arrive in Australia carrying a five-star ANCAP safety rating across every model grade, giving family, fleet and novated lease buyers another reason to place the popular medium SUV on their shortlist. Tested under ANCAP’s tougher 2025 protocols, the new CX-5 achieved a standout 93 per cent result for Vulnerable Road
• 
  Can an electric sedan still earn a place in an SUV world?
  The medium sedan might not be the dominant fleet vehicle it once was, but Kia believes there’s still room for a practical electric four-door that prioritises efficiency, comfort and everyday usability. Enter the Kia EV4 Air – the brand’s newest battery-electric sedan and one that takes direct aim at the long-standing benchmark in the segment,
• 
  Australia Has the Opportunity to Leapfrog the Next Generation of Connected Fleet Technology
  Response by Mark Whitmore, SVP Global Sales, Directed Technologies Neil Cawse, CEO and Founder at Geotab, is right to highlight the opportunity that exists within Australia’s fleet sector in the recent interview with Fleet News Group. Compared with North America and parts of Europe, Australia has been slower to adopt technologies such as OEM telematics,