The National Vehicle Emissions Standard (NVES) is now legislated and will reshape the Australian vehicle market—and fleet buying decisions—over the rest of this decade.
At the recent 2025 AfMA Summit, Matt Hobbs, former CEO of the Motor Trades Association of Australia (MTAA), provided rare behind-the-scenes insight on how the policy was shaped, where it may head next, and what fleet managers should be thinking about now.
Lobbying for Balance: How Industry Softened the NVES
Hobbs was heavily involved in the intense industry negotiations with the Federal Government in 2024 that ultimately shaped the NVES legislation.
“It was a full-contact sport,” he told the AfMA audience. “The original draft would have forced the transition in a very harsh way.”
Among the key changes secured through industry lobbying:
- Moving vehicles like the Ford Everest into the more generous LCV category.
- Ensuring body-on-frame 4x4s were treated as commercials, not passenger cars.
- Adding a formal 2026 review clause to allow adjustments based on global trends.
- Securing a more gradual tightening of targets in the early years to allow OEMs to plan.
“It was the hardest standard I’d seen anywhere—and I’ve worked on these in places like Saudi Arabia, Korea, India. We needed to soften the start or risk major market disruption.”
Matt Hobbs
The Political Landscape: The Result Means the Policy is Locked In
Hobbs also gave a clear-eyed assessment of the political environment post-election—critical context for fleet managers planning future acquisitions.
The ALP’s thumping victory means the Government can now pass legislation in the Senate with Greens support alone.
“The Coalition promised to turn the fines to zero. That’s not going to happen,” said Hobbs. “Not only that—this government will likely still be in power through the next review and next phase of NVES in 2028.”
Importantly:
- The ALP is committed to retaining the current NVES settings—no watering down.
- A point-of-sale compliance shift is coming (likely in 2026), meaning vehicle emissions will be counted when sold, not when imported—a change that will drive new sales dynamics and possibly create new end-of-year sales cycles.
- The Greens hold the balance of power in the Senate and will oppose any attempts to delay or weaken NVES or reintroduce PHEV FBT exemptions.
Global Watchpoints: US and EU Changes May Affect NVES Settings
Hobbs cautioned that fleet managers—and government—must keep an eye on global developments.
“Europe is already talking about watering down its 2035 EV-only targets because the market isn’t ready. The US election result could also derail their emissions plans,” he said.
Australia has only one planned review, in 2026. Hobbs urged flexibility.
“We need to be ready to adjust. The car companies are watching this very carefully.”
Implications for Fleet Managers: Now is the Time to Act
So what should fleet buyers be thinking about right now?
Hobbs outlined several key implications:
- Vehicle availability will change—OEMs are already deleting high-emitting models to avoid penalties. For example, some 4×2 body-on-frame SUVs are being quietly removed from lineups because they fall under the tough passenger car target.
- Fleet-friendly vehicles may become scarce—OEMs will prioritise high-margin variants. Entry-level fleet spec vehicles may become harder to secure in some categories.
- Residual value risk—with EVs and hybrids becoming mandatory to hit targets, fleets need to manage depreciation risk carefully and demand battery state-of-health certificates where possible.
- New players will emerge—brands like BYD are using NVES as an opportunity to bring affordable EVs to market. “The Shark was a rumour 12 months ago. Now it’s on the road in Melbourne,” Hobbs noted.
- New sales patterns may emerge—the shift to point-of-sale compliance could see OEMs pushing to sell EVs into fleets in November-December to meet annual targets.
“There are real opportunities here for fleet buyers who are agile and informed,” Hobbs said. “OEMs will need to find customers for EVs and PHEVs—fleets will be a big part of that solution.”
The Funding Gap: Where Are the Fines Going?
A pointed question from the audience raised another key issue: where will NVES penalties go?
“Into consolidated revenue,” Hobbs confirmed. “We pushed hard to get some of that reinvested in the industry—for charging infrastructure in particular—but the Government declined. That’s something we need to keep fighting for.”
Hobbs also highlighted charging infrastructure delays as a barrier for fleets. Even with funding, some power upgrades are taking two years to implement. “That’s got to change if we want this transition to succeed,” he said.
Conclusion: The Transition Is Happening—Be Ready
Hobbs’ core message to fleet managers was simple:
“This is happening. The targets are set. The policy is locked in. Your vehicle options will change fast.”
Now is the time to:
- Understand the emerging mix of vehicles
- Work closely with OEMs to secure future supply
- Factor in depreciation risks on EVs
- Explore new brands and new solutions
- Push for infrastructure support at every opportunity
“We’ve already seen models deleted. We’ll see more. The days of business as usual are over,” Hobbs concluded.
