The Australian Automotive Dealer Association (AADA) has raised strong concerns about the financial impact new electric vehicle (EV) targets will have on franchised car dealers.
The warning follows the recent announcement from the Climate Change Authority (CCA), which outlined new modelling to help Australia reach its 2035 climate goals. While the AADA supports efforts to cut emissions, it says the plan overlooks the heavy costs that dealers will face in the short term.
Dealers Facing Billions in Added Costs
Research commissioned by the AADA from the Centre for International Economics suggests that the legislated New Vehicle Efficiency Standard (NVES) will impose dealership-wide costs of between $1.1 billion and $2.1 billion over the next five years.
With around 3,200 franchised new car dealers operating across the country, this means each business could face costs between $343,000 and $656,000. The AADA says this is a major burden on businesses already adapting to changing consumer demand and stricter environmental policy.
“The AADA has briefed the CCA on the impact of the slowing adoption rate of electric vehicles and the costs this will impose on dealers,” said AADA CEO James Voortman.
“While the AADA and our members support an ambitious and achievable emissions target, it will be our members and their 70,000 employees who will have to pay for the short-term cost of our targets over the next five years.”
Supporting the Transition, But with Safeguards
The AADA says its members are already investing heavily in training, infrastructure and customer education to support the move towards low and zero emission vehicles. However, it warns that ambitious targets must be matched with careful planning to avoid harming businesses and limiting consumer choice, particularly in regional areas.
The association has called on the government to implement its 2025 Budget commitment to provide stronger franchising protections for new car dealers. These protections, it argues, will give businesses the confidence to invest in new brands and technologies while continuing to serve customers.
The AADA also confirmed it will present detailed modelling to the government as part of the 2026 NVES review to demonstrate the real-world impacts on the retail automotive sector.
Did you find this article interesting? Click the ‘heart’ button above to give it a like!
