A chief executive from car giant Honda has warned the Albanese government’s electric cars policies will drive up the cost of hybrid vehicles – and have a ‘counter-productive’ effect on Labor’s ambitious emissions target.
The warning comes after the Climate Change Authority (CCA) said EVs would have to make up half of new car sales over the next 10 years for Labor to reach its emissions reduction target of 62 to 70 per cent below 2005 levels by 2035.
Labor’s New Vehicle Efficiency Standard (NVES) came into force on July 1 – with penalties handed out to manufacturers that chiefly sell petrol models.
The scheme will gift credits to companies that sell more EVs but impose penalties on those that sell a higher proportion of petrol and diesel utes and SUVs.
Honda Australia CEO Jay Joseph has warned Labor’s policies will increase the price of hybrid cars and prove ‘counter-productive’ to its emissions target.
He said objectives set by the NVES, combined with the new advice from the CCA, would force Honda to increase the cost of hybrid and petrol cars ‘over the next few years’ to cover the penalties imposed on the Japanese manufacturer.
‘Most hybrids, we believe, including ours, will start to be above the compliance threshold next July,’ Mr Joseph told The Australian.
‘We want to minimise how much we pass that along to consumers but at some point we can’t bear those costs without passing them on to consumers.’
A chief executive from car giant Honda has warned the Albanese government’s electric cars policies will drive up the cost of hybrid vehicles (Anthony Albanese is pictured)
Honda Australia CEO Jay Joseph (pictured) has warned Labor’s policies will stop Australians from buying hybrid cars and prove ‘counter-productive’ to the emissions target
Labor’s New Vehicle Efficiency Standard came into force on July 1 – with penalties handed out to manufacturers that chiefly sell petrol models (pictured a hybrid Honda model)
He said policies that pushed up the price of hybrid and petrol cars would mean Australians would drive their older, less emission-friendly vehicles for longer, which was ‘counter-productive’ to Labor’s goal of net zero.
It comes months after the Federal Chamber of Automotive Industries (FCAI) warned drivers will end up paying more for petrol and diesel cars over the next four years.
It’s estimated Labor’s new laws will add $6,150 to the price of a Ford Ranger and $2,720 to a petrol-powered Toyota RAV4 SUV.
‘The regulation is designed to distort the market to get people to buy more efficient vehicles and if you don’t buy that more efficient vehicle there’s going to be penalties in the system,’ he said.
‘Those penalties will be borne by someone, most likely the consumer.
‘We can safely assume – in the whole scheme of things – the increases in prices throughout the system ultimately will come to be borne by the motorist.’
The warnings come as the FCAI revealed that EV sales have stalled in 2025, remaining below eight per cent of new vehicle sales. Battery Electric Vehicles (BEVs) made up just 7.6 per cent of new car sales in the first half of 2025.
Honda is one of several manufacturers who have called for more public charging stations in Australia, to quell ‘range anxiety’ for potential EV buyers.
