Emissions have just become very important for car brands in Australia. Photo: James Coleman.
The Ford Mustang has become another casualty of Australia’s New Vehicle Efficiency Standard (NVES), which came into effect on 1 July.
Prices for the iconic muscle car have risen by about $5000 across the range, with the base four-cylinder turbo model now starting at $71,990 and the V8 GT from $83,990.
Ford has blamed the recent shake-up of Australia’s emissions legislation as “a factor in our decision”, according to carsales.com.au.
Earlier this year, Ford pulled the cheapest rear-wheel-drive (RWD) version of its Everest SUV because it would have failed to meet the new standard – and Isuzu followed suit with its RWD MU-X.
One industry expert expects these won’t be the last to either increase in price, or disappear altogether.
The Ford Mustang GT now starts from $83,990. Photo: James Coleman.
Under the NVES, manufacturers must meet an average CO2 limit across all new vehicles they sell.
Go over the limit, and they’ll cop fines of $100 per gram of CO2. Come in under and they’ll earn credits, which they can trade or save for future years.
For instance, the Mustang belches out up to 310g/km of CO2 – well above the government’s imposed limit for 2025 of 141g/km.
But Ford has until when the fines start in February 2028 to make up emission “credits” by selling more of its low-emission models, such as the new plug-in hybrid (PHEV) Ranger or electric Transit van.
However, by 2029, the NVES target lowers to 58g/km, which even the current Toyota RAV4 Hybrid will fail to meet.
The trouble will really come, according to the Federal Chamber of Automotive Industries (FCAI), if demand for EVs and PHEVs doesn’t pick up.
“We expect brands to continue reviewing their product line-ups in light of NVES targets and consumer demand,” FCAI CEO Tony Weber told Region.
“Brands will consider the most efficient mix of low-emissions technologies, including hybrid, plug-in hybrid and all-battery EV offerings.
“Given the current level of consumer demand for EVs and their limited availability in a number of vehicle segments, we are concerned about upward price pressures on vehicles as fines accrue under the NVES.”
EV sales in Australia continue to grow, but the trajectory has plateaued over the past year. So far in 2025, they still only make up 7 per cent of new-car sales.
The Ford Ranger PHEV launched this year in Australia. Photo: Ford Australia.
“The NVES … could result in a lower-than-anticipated uptake of low-emission technologies, which could encourage consumers to hold onto older vehicles for longer,” Mr Weber added.
“This could have the opposite effect of increasing emissions rather than achieving the policy objective of reducing emissions, while making new cars more expensive.”
A Ford Australia spokesperson told Region the company had no “immediate plans to change its line-up”, relying on the Ranger and Transit PHEVs to be enough for now.
“In 2025, some in our line-up will beat the targets for their category, while some, such as Mustang, will exceed their targets,” the spokesperson said.
“A range of factors impact pricing, and from time to time we make adjustments to our manufacturer’s list prices based on these.
“Regulatory considerations are one factor, but others, such as increased shipping and logistics costs, also play a role.”
Earlier this year, Toyota pulled the V8 engine from its 70-Series LandCruiser in favour of a smaller, more efficient four-cylinder.
But the brand has said it has “no intention of discontinuing vehicles popular with the Australian public”.
“The NVES targets present significant challenges that must be addressed but Toyota is committed to meeting its obligations,” sales, marketing and franchise operations vice-president Sean Hanley told Region.
“Our plan is to build a self-sustainable model within our own product portfolio – generate our own credits, hopefully offset any penalties and continue to grow by selling capable, practical and affordable vehicles that Australians want.”
Mazda Australia, meanwhile, is already well on the way to “having some form of electrification across all models” by 2030, including PHEV and mild-hybrid tech for its best-selling CX-5.
Subaru hasn’t announced any immediate changes, but confirmed it would meet “all regulatory requirements” and monitor “market conditions and evolving customer preferences”.
Hyundai expects to import new models and drivetrain options from overseas markets. Photo: James Coleman.
It’s “business as usual” for Hyundai too, but we should expect more models to come from overseas in the coming years.
“We are planning to introduce more efficient powertrain options to meet NVES regulations, including efficient hybrid and EV models,” PR, sponsorship and event general manager Bill Thomas said.
“Some of these are already available in overseas markets, some are in development now for introduction soon.
“We expect the targets to be very challenging, but it’s the same for all brands and they are designed to change market behaviour.”
Mr Thomas added that the NVES needed to be accompanied by more government investment in public charging infrastructure to boost EV sales.
“Charging infrastructure is the key to consumer confidence – building charging convenience for everyone across Australia – and we can see how its development has driven greater EV take-up in other markets,” he said.
“There is much to be done in this area and we are doing what we can to assist.”
