Toyota 4WD, ute customers to foot the bill for fines under new Australian emissions targets


Buyers of Toyota utes and 4WDs may be stung for choosing an inefficient vehicle next year – and pay most or all of the fines the car giant could receive for not meeting proposed Australian new-car emissions targets.

Toyota Australia says customers – not head office – will pay the bill for hefty emissions fines set to hit the company’s highest-polluting utes and four-wheel-drive models if it does not meet proposed emissions targets due next year.

The Japanese car giant has reiterated its support for emissions reduction targets for new vehicles in Australia – due as soon as next year – which require car makers to meet an average CO2 emissions level across their line-ups.

However, Toyota says the government’s proposed version of the standards is moving too quickly, and excessively penalises large 4WD SUVs by placing them under the same CO2 emissions target as Corolla hybrid hatchbacks.

If car makers fail to meet the targets set, they will be issued ‘debits’ that convert to fines – which Toyota says it will pass onto customers close to, or in their entirety.

Modelling by the Federal Chamber of Automotive Industries – which are estimates based on the company’s current model line-up – suggests Toyota could rack up debits equivalent to penalties of $13,250 for a Toyota LandCruiser or $2690 for a HiLux.

“The reality is that if we were to be fined … the investments we’re putting into developing these [hybrid and electric-car] technologies is such that the customer would have to wear a good portion, if not all of it,” Toyota Australia sales and marketing boss Sean Hanley told media.

“I just can’t imagine how [car makers] can absorb these massive fines. We’re not talking a couple of bucks here, [they are] massive fines – if even Option B [the government’s preferred standard] goes through with the timing as proposed right now.”

Mr Hanley said the alternative is cutting Toyota’s model range, and removing high-pollution four-wheel-drives – which sell in their tens of thousands – from sale entirely.

“You’ve got three options when it comes to the fines. One, you pay the fines, [but] that ultimately has got to be passed on to the consumer,” the executive said.

“Two, you stop bringing those cars in. Some people would love that idea, but there’s a bunch of people – in rural Australia, grey nomads, farmers, mums and dads – who probably wouldn’t like that idea.

“Or three, you buy credits [from car makers which have met the targets]. I can tell you … we’re not buying credits.

“We pay the fine, pass it on, [and] we try to get the product portfolio right. That’s why we’re saying to government, we’re not anti [emissions standards]. We know this is challenging.

“Just give us time, and others time, for the industry to adjust, so that you leave nobody behind on the journey.”

Toyota has only just introduced its first electric car in Australia – the BZ4X SUV – though it has added 400,000 hybrids to local roads since 2001, more than half of which were sold in the past three years.

Asked if a surge in hybrid and electric Toyota sales could prevent the company from racking up fines – based on its current model line-up – Mr Hanley said: “It would certainly reduce [the fines], but it won’t offset [completely].

“I do qualify that by saying we’re still working through the finer details. We’re still looking at every single model, every variant, every grade … what does this mean for our product portfolio? What does this mean in potential fines? We’re still working through this.”

The Australian Government describes its preferred choice (Option B) of three versions of the targets – known as the New Vehicle Efficiency Standard (NVES) – it has proposed as “fast and flexible”.

It proposes a ‘baseline’ CO2 emissions target of 141 grams per kilometre for passenger vehicles and SUVs, and 199g/km for utes and vans, in 2025 – reducing each year to 58g/km and 61g/km respectively come 2029.

The exact emissions target for each vehicle is adjusted by its mass – so heavier cars are given slightly more leniency – however the government’s proposal would see new-vehicle CO2 emissions drop by about 60 per cent in six years.

Toyota believes the standards – which are due to come into force from 1 January 2025, pending any delays – do not give car companies enough time to develop and launch more efficient models to meet the targets.

Mr Hanley told Drive the car industry needs “more than three years” to prepare large SUVs and commercial vehicles which are able to comfortably meet the targets.

Among Toyota’s concerns with the government’s proposal is the categorisation of large SUVs and four-wheel-drives with small hatchbacks and sedans – which face stricter targets – rather than with utes and vans, which have more lenient targets.

“The only area of Option B that’s difficult … is the large SUVs, and the re-categorisation of those vehicles into the passenger-car [class],” said Mr Hanley.

“Now I put it to you … where are the alternative vehicles for those customers in the next two to three years, that are affordable and capable of doing what they want to do [while meeting the targets]?”

“Now I’m speaking on behalf of Toyota obviously, but I’m sure there’s other manufacturers too that are sitting there going wow, can I get that product that I’m selling now … within three years to where it’s got to be where I’m not going to be imposed with massive fines?”

Asked if Toyota believes the planned 1 January 2025 introduction date is too soon, Mr Hanley told media:

“Well, it’s 11 months [away]. I don’t know about you, but I can’t get a ZEV [electric] LandCruiser in 11 months. I’m not sure if anyone else has got one coming, but I can tell you Toyota Australia doesn’t have one coming [in that time].”

He told Drive: “We have plans in place for the future. But they’re just not in place for 11 months [from now].

“What we’re asking of government is to please consider the targeting, and the speed at which we’re bringing the emissions standard to Australia, calibrating it to the technological and [buying] needs of the consumers.”

While the executive called for changes to the government’s preferred target, Mr Hanley said the least stringent of the three proposals, Option A, “isn’t an option … because [it] essentially stays where we are and [does] not do a lot.”

Asked by Drive about the estimated fines for Toyota models quoted by the FCAI, the executive said: “What you’re seeing today … is the projected fines based on the NVES and the current product portfolio. In fairness to those industries, and government, they don’t necessarily understand the future product portfolio as well as we car companies do.

“Therefore they can only build on what they’re seeing today, and that’s fine because the reality is for the first few years, there are going to be fines.”

The standards are in their final stages of consultation, now open to submissions from the public, car companies and lobby groups until 4 March 2024 – set to include a case made by Toyota Australia.

“We don’t want to portray to either government – on either side – or the public that we’re opposing an NVES. We simply want a transition that’s workable for both the customer, the companies, and the decarbonisation journey,” Mr Hanley said.

Toyota’s position is similar to the Federal Chamber of Automotive Industries (FCAI), which says it represents new-car makers in Australia, and has called for considerable revisions to the proposed targets.

However some car brands which are members of the FCAI have broken ranks and expressed support for the government’s preferred standard, Option B, without changes to vehicle classification or the roll-out timeline, and only mild further revisions.

Among them are Volkswagen, which wants Option B with super-credits from Option A, which provides 1.5 times the emissions credits for “efficient” petrol, diesel and hybrid cars, double for plug-in hybrids, and triple for electric vehicles.

It would allow the German car giant to offset significant sales of high-pollution diesel utes with smaller numbers of electric cars to avoid paying fines.

Hyundai Motor Company Australia – the factory-backed importer of Hyundai and Genesis vehicles – has also expressed support for “Option B, and with some minor aspects of Option A introduced to it” in a media statement earlier this month.

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MORE:Search Used Toyota Cars for Sale
Alex Misoyannis

Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020.

Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family.

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