I raised the issue of the new “baby” Land Cruiser FJ – a vehicle Australians would love. It’s compact, attractive, and fits our lifestyle. Yet, we are hearing that it won’t be coming to Australia because it can’t meet the new emissions regulations.

The government promised “more choice” and instead, we are seeing the death of the affordable petrol and diesel vehicles people actually want. If they’ve already killed the baby Land Cruiser, surely the HiLux is next on the chopping block.

I also questioned the department regarding BYD and the way these “credits” are being handed out. It’s a disgrace!

The department confirmed that a company like BYD gets credits just for putting a vehicle on the Register of Approved Vehicles, not for actually selling it to a customer. They can park these cars in a warehouse, collect thousands of dollars in credits per vehicle (over $7,000 for a Sealion 7) and then sell those credits to other carmakers who produce “normal” cars.

I asked directly if the department is concerned that this policy is funnelling money into corporations controlled by the Chinese Communist Party. They admitted this hasn’t been raised with the Minister.

The department claims they might look at changing the scheme to a “point-of-sale” trigger in a 2026 review, however for now, the system is wide open for exploitation.

This is what happens when you build a system based on global targets instead of the actual needs of the Australian people. It robs citizens of affordable, reliable transport while enriching foreign entities.

My position on this remains clear: the government’s New Vehicle Efficiency Standard (NVES) is strangling the choices available to everyday Australians.

— Senate Estimates | December 2025

Transcript

Senator ROBERTS: Thank you for appearing again. I’d like to take up the new ‘baby’ Land Cruiser.

CHAIR: I hear it’s not coming to Australia.

Senator ROBERTS: Yes. It’s a very attractive vehicle. It’s the size of a Suzuki Jimny. It would be very popular. Toyota knows it would be wildly popular, but it says, according to an article:

…the ‘Baby’ Land Cruiser FJ won’t make it to Australia in its current guise because its engine—shared with the HiLux—can’t meet upcoming emissions regulations, which may also see it dumped from the ute range.

When the government introduced the standard, you said it would give Australians more choice. Yet we have an example already of it meaning less choice for Australians. You’ve already killed the baby Land Cruiser. You’re going to kill the HiLux next with these standards. When are you going to admit the new vehicle efficiency standard is taking choices away from Australians who want to drive a normal, affordable petrol or diesel vehicle?

Mr Kathage: Can I just check, Senator. It may be that you’re referring to the noxious emissions standards Euro 6, rather than the new vehicle efficiency standard.

Senator ROBERTS: The NVES.

Mr Kathage: I’m not aware of those reports. I do understand that there’s been a reclassification of Toyota vehicles to meet the heavy-vehicle noxious emissions standard rather than the light-vehicle noxious emissions standard.

Senator ROBERTS: No. That’s just what’s been reported.

Senator O’SULLIVAN: If it helps, Senator Roberts, this is a new vehicle that Toyota have released, and my understanding is it will only be released in Japan. It’s a vehicle that would be highly sought after in Australia, but Toyota have said that, due to the NVES, it doesn’t fit their overall fleet requirements to be able to import them into Australia.

Mr Betts: The NVES doesn’t work on an individual vehicle level. It works across—

Senator O’SULLIVAN: As I’ve said, it’s across their fleet.

Mr Betts: Yes. So let’s look at what’s changed in the Australian market since the NVES hit the statute book. The number of brands on sale in Australia was 56 at the end of 2024; it’s now 65. It was 390 models; it’s 420 models now. The price increase of vehicles is below the rate of inflation; in other words, car prices generally have fallen in real terms. So there’s no evidence that there is a systemic diminution in customer choice or an increase in prices—as we forecast on the basis of experience in other jurisdictions.

Senator ROBERTS: Well, here’s one that’s not coming. On the new vehicle efficiency standard, you’d be aware of reporting by the Financial Review—you may have touched on some of this earlier on—from 2 November that BYD has imported far more vehicles than it has sold in Australia. Has that been raised today?

CHAIR: We have touched on that today.

Senator ROBERTS: Is it accurate that BYD receives those credits for electric vehicles under the scheme just for importing them? Do they get them just for importing a vehicle, rather than selling it?

Mr Kathage: I can answer that, Senator, if you like. Vehicles are counted in the scheme when they’re added to the Register of Approved Vehicles. That occurs during a calendar year. The interim emissions value, which is when units and other effects might occur, is actually issued on 1 February the year after. So vehicle suppliers put something on the Register of Approved Vehicles, there’s a period of time and then, at the start of the next year, effectively, the interim emissions value is issued, and credits are issued shortly after that.

Senator ROBERTS: So it’s for bringing it in and putting it on the register as being here, not for selling it?

Mr Kathage: That’s correct, yes.

Senator ROBERTS: Thank you for your succinctness. So, even if BYD don’t go on to sell those vehicles, they still get credits and then they can sell them on to another carmaker who makes normal petrol and diesel cars? They can sell the credits?

Mr Kathage: BYD can import vehicles and put them on the RAV, and then, once the IEV is issued the next year, they can then deal with those units in whatever way they want. The previous evidence we’d supplied is that it does seem the case that BYD has orders that it needs to fulfil. They’ve indicated publicly that there’s been a delay in them being able to fulfil those orders, and their warehousing strategy is a matter for them.

Senator ROBERTS: The warehousing strategy is a what?

Ms Stagg: A matter for them.

Senator ROBERTS: Reporting the money going from the government to them is a matter for us. Reporting indicated that BYD would earn $7,050 in credits for one of its Sealion 7 vehicles, for example. Can you confirm how many credits in total have been issued to BYD under the new vehicle efficiency standard?

Ms Stagg: No units have been issued. As Mr Kathage explained, that will occur on 1 February and will take into account the entire fleet from the OEM for the period 1 July to 31 December 2025.

Senator ROBERTS: I have a few short questions on structure. Are you aware of the ownership structure of BYD?

Mr Kathage: Not personally.

Senator ROBERTS: Has the department raised any issues with the minister about their policy leading to the enrichment of Communist China controlled corporations? That’s what you’re doing by giving them these credits. They’re connected to the Chinese Communist Party.

Ms Purvis-Smith: No, we’ve not raised that.

Senator ROBERTS: Has the department done any work on changing to a point-of-sale trigger for the scheme, rather than an import trigger?

Mr Kathage: That’s something that we’re looking at. As the minister indicated in her second reading speech on the bill, that is a matter that the government will consider as part of the 2026 review. We’ve done some preliminary looking at the benefits and costs of doing so. We sort of touched on this a little earlier, but there are lots of questions that we need to resolve in relation to whether that would be a good idea based on implementation challenges.

Senator ROBERTS: So there’s a lot of complexity when we introduce anything new that is not based upon people’s needs but rather on arbitrary or international targets or something like that. That’s what seems to be the issue here.

Mr Betts: That’s a statement. Mr Kathage indicated the legislation will be subject to review in 2026.