Tesla has dramatically announced its exit from the peak body for car brands in Australia, criticising it for what it calls “false and misleading” comments on proposed federal emissions regulations.
In a letter addressed to the Federal Chamber of Automotive Industries (FCAI) but not signed by any particular executive, Tesla says the group over the past three weeks has “repeatedly made claims that are demonstrably false” about the New Vehicle Efficiency Standard (NVES) and its impact on new car prices.
It has confirmed it will cease to be members of the FCAI at the end of the 2023/24 financial year, but has said it will continue to report sales numbers until July through monthly VFACTS reports.
“Tesla is concerned that the FCAI has engaged in behaviours that are likely to mislead or deceive Australian consumers,” the company alleges.
“Tesla is also concerned that it is inappropriate for the FCAI to foreshadow or coordinate whether and how competitor brands implement price changes in response to environmental regulations such as the NVES.”
“Tesla has requested the Australian Competition and Consumer Commission (ACCC) consider these issues,” it adds, arguing the group’s actions “[risk] facilitating or creating the impression of anti-competitive behaviour”.
Tesla Model Y
It has called on the FCAI to issue “timely public corrections to these false claims” as well as “cease the public dissemination of misleading or deceptive information regarding the potential impact of NVES”.
Additionally, it has called on the FCAI to “cease any commentary and meetings in which the FCAI foreshadow or coordinate whether and how competitor companies will change prices or supply in response to NVES”.
It argues the FCAI is misrepresenting how penalties will be applied, by not calling out that individual vehicles won’t be penalised under the proposed legislation and that these penalties instead apply at a brand level.
“Of the 20 top-selling vehicles in Australia that the FCAI has referred to, 11 are sold by companies that performed below their target for EPA standards in the USA,” Tesla says in its letter.
“Although many of these companies still sold highly polluting vehicles in the USA, they balanced out their sales with more efficient vehicles and paid no penalties under EPA standards in 2022.”
It’s worth noting there are various intricacies with US government emissions standards. For example, regulations there have effectively incentivised manufacturers to offer larger vehicles or standard all-wheel drive to receive extra compliance credits.
Tesla Model 3
In response to Tesla’s letter, the FCAI has said it continues to support emissions regulations, but argued the timing and scope of the NVES is “unprecedented”.
“FCAI must act in the interests of the Australian automotive industry and Australian car buyers. FCAI and its members represent more than 50 brands and over 350 vehicle models from battery electric vehicles, plug-in hybrid and hybrids to petrol and diesel drivetrains. Of those vehicle models, just two are Teslas,” said a spokesperson for the FCAI.
“For more than 10 years we have been calling for an ambitious new vehicle efficiency standard that is right for Australia. It needs to reduce emissions while ensuring low and no emission vehicles are accessible and affordable to all Australians.
“FCAI cannot support a standard that in the short-term might meet the needs and pockets of those at the premium end of the market while potentially hurting businesses and families who may be forced to deal with less choice and higher prices next time they buy a new car.
“The timing, targets and penalties of the Government’s current proposed standard are unprecedented. There needs to be change, but it must be at a rate that the industry and consumers can support.
“The FCAI will continue to work with its members and governments across the country to deliver the world’s best technology in terms of engine performance, safety, environment and connectivity to all Australians.”
A Nine graphic published in Tesla’s letter
In its letter to the FCAI, Tesla also took exception to graphics published by other media outlets, based on data sourced from the FCAI, which it claims suggest Tesla would cut the price of its vehicles by upwards of $15,000 following the introduction of the NVES.
“An Australian consumer would reasonably conclude that the FCAI has knowledge and authority in claiming that Tesla vehicles will be discounted under NVES as claimed,” the company says.
“Yet these figures are falsehoods, produced without Tesla’s knowledge or approval.”
Not only does it argue that these figures mislead customers into thinking significant price cuts are coming, it argues “a reasonable consumer would conclude… that the NVES will directly fine or incentivise consumers by the claimed amounts”.
It argues this data may drive up sales of less efficient vehicles in the short-term and delay purchases of more efficient vehicles.
It also criticises news outlets for publishing figures relating to price hikes of highest-emitting variants, though it’s worth noting the data supplied to CarExpert by the FCAI displayed figures for both the lowest- and highest-emitting variants of the top 20 best-selling cars – and we published both.
CarExpert understands quitting the FCAI doesn’t necessarily prevent Tesla from publishing sales data in the FCAI’s monthly VFACTS reports.
BYD, for example, isn’t an FCAI member but its sales figures are published in VFACTS reports.
Should Tesla’s sales reporting disappear from VFACTS, however, at face value it will appear electric vehicle (EV) sales will have taken a sharp dive as the brand is far and away the market leader in EVs.
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