Australia auto lobby split widens as Tesla, Volkswagen back tougher emissions plan By Reuters

By Lewis Jackson and Stella Qiu

SYDNEY (Reuters) -Volkswagen and Toyota (NYSE:) have taken opposing sides on Australia’s proposed new rules to cut vehicle emissions, while electric vehicle makers Tesla (NASDAQ:) and Polestar (NASDAQ:) quit the country’s auto lobby in protest over the group’s campaign against tougher standards.

The German automaker said it supported the government’s plans and wanted stronger incentives for clean car importers, in stark contrast to the main lobby group, which is pushing to water down the rules.

“Our company’s position is its own – not that of any lobby group or membership organisation,” a spokesperson said in an email on Friday. Volkswagen (ETR:) remains a member of the group.

But Toyota Australia, which tops auto sales with its range of pick-up trucks and SUVs, said hours later it supported the lobby group’s position and called on the government to revisit the stringency of the plan and its phase-in penalties.

To get more electric vehicles on the road and cut emissions, Australia has proposed vehicle efficiency standards that will penalise car makers who import emissions intensive models and reward those who bring in cleaner vehicles.

The Federal Chamber of Automotive Industries has said the government’s preferred option would raise prices and limit options, especially for pick-up trucks popular in the country.

Polestar Australia, part-owned by China’s Geely Automobile, quit the group on Friday, a day after Tesla did the same, and said the lobby group’s commentary against the proposed regulations had “irrevocably damaged” public trust in the policy.

In a letter to the FCAI, Polestar said delaying or making the standards less stringent would keep Australia a dumping ground for old technology vehicles and force the emissions burden elsewhere in the economy.

“The brand cannot in good faith continue to allow its membership fees to fund a campaign designed to deliberately slow the car industry’s contribution to Australia’s emissions reduction potential,” the head of Polestar Australia, Samantha Johnson, said in the letter.

Tesla quit the FCAI on Thursday and resigned from its board, accusing it of making false claims about the proposed standards and their effect on car prices.

VW said it was concerned about the exit of both companies and was discussing the situation, the spokesperson said, without giving specifics.

In response to questions about the exits, the FCAI said on Friday it could not support a standard that met the needs of the owners of premium vehicles while leaving others with fewer choices and higher prices.

The FCAI said its members represent more than 50 brands. Its chair and two deputy chairs are from Mazda, Toyota and Mitsubishi Motors (OTC:), respectively.

Australia’s centre-left Labor government opened consultation on the standards in February, and also released a “preferred model” for the new standards.

It aims to introduce the new standard in 2025, which will become more stringent each year, with the aim to hit an average vehicle emissions intensity similar to the U.S. by around 2028.

Russia and Australia are among the only developed countries without fuel efficiency standards.