Australia's New Vehicle Efficiency Standard (NVES) tightens sharply on 1 January 2027, and hybrids are about to feel it. The headline CO2 limit for passenger cars and most SUVs drops from 117g/km to 92g/km, and an analysis of current models suggests 51 petrol-electric hybrid variants will sit above their individual targets once the change takes effect.
According to that analysis, 32 hybrid variants that meet their 2026 targets will move over the line in 2027, joining those that are already above. Only seven hybrid variants are expected to stay under their targets next year.
The official NVES limits fall again in January
The targets below are the headline limits set under the New Vehicle Efficiency Standard Act 2024 and published by the NVES Regulator. They are measured in grams of CO2 per kilometre.
| Year | Type 1 (cars and most SUVs) | Type 2 (utes, vans, heavy off-road) |
|---|---|---|
| 2026 | 117g/km | 180g/km |
| 2027 | 92g/km | 150g/km |
| 2028 | 68g/km | 122g/km |
| 2029 | 58g/km | 110g/km |
Each vehicle's actual target is adjusted for its mass, so heavier vehicles get a slightly higher target than the headline figure. That is why some hybrids will clear their target while others with similar fuel use will not.
Very few hybrids are expected to stay under target
The analysis says seven hybrid variants are expected to remain under their 2027 targets, and it names the six below.
- Hyundai Staria Load Hybrid
- Lexus ES300h Luxury with Enhancement Pack
- Lexus RX350h Luxury 2WD
- Nissan Qashqai e-Power ST-L
- Nissan Qashqai e-Power Ti
- Nissan Qashqai e-Power Ti-L
The Qashqai e-Power uses its petrol engine only as a generator, with the wheels driven by an electric motor. The list shows how a heavier vehicle with a relatively low CO2 rating can benefit from the mass adjustment. The figure of 51 comes from an independent analysis rather than the regulator, so treat it as an estimate. Brands can also lower ratings with updated models.
NVES does not ban any hybrid
Going over target does not stop a car from being sold. The NVES applies to each brand's whole fleet, not to individual cars. A brand that sells enough electric cars and plug-in hybrids below their targets earns credits, called units, that can offset hybrids and petrol models above target.
If a brand's fleet still finishes above target, it has two years to bring its balance back to zero using units it earns or buys from other brands. Only an unresolved shortfall becomes a penalty. Under the Act, an infringement notice is calculated at $50 per g/km per vehicle, rising to $100 if the matter goes to court. As an illustration, a hybrid 10g/km over its target could carry up to $500 of liability per vehicle if the brand cannot offset it.
What it means for hybrid prices and availability
Hyundai Australia's senior manager of future mobility and government relations, Scott Nargar, has warned that the tighter targets could penalise the hybrids many buyers are being encouraged to choose. "Hybrids have been going great [over] the last couple of years," he said. "If the price of a hybrid would go up, people wouldn't consider the move, and they wouldn't move to a newer car."
For buyers, the likely effects depend on each brand's fleet.
- Brands with plenty of EVs and plug-in hybrids have the most room to absorb hybrid overruns with credits, so their hybrid prices are less likely to move because of NVES.
- Brands that rely heavily on hybrids, petrol models and diesel utes may face more pressure to raise prices, reduce discounting or adjust the mix of variants they bring in.
- Higher-emitting variants, such as heavier AWD hybrids and large hybrid SUVs, are the most exposed if a brand trims its line-up.
- Supply could tighten if brands prioritise lower-emitting models, but no brand has confirmed it will withdraw a hybrid because of the 2027 targets.
Popular hybrids such as the Toyota RAV4 remain fully available today, and hybrids still use much less fuel than equivalent petrol models. Our comparison of petrol, hybrid and electric running costs shows how big that saving can be.
Utes face the same squeeze
The Type 2 limit for utes and vans falls by 30g/km in January as well. Toyota Australia has said 2027 is the big challenge for light commercial vehicles and has called for a more pragmatic target for that segment. Our explainer on whether utes and 4WDs will cost more under NVES covers the diesel side of the story.
The bottom line for hybrid buyers is that no price rise linked to NVES is confirmed. If you find a good hybrid deal now, there is little reason to wait. If you are flexible, plug-in hybrids and EVs are where brands earn credits, and that is where discounting is most likely to continue.