Market Insight: Older vehicles counter NVES

THE average age of a passenger vehicle in Australia has slipped behind the global average, with recent data suggesting the median age of cars and SUVs is now 11.4 years.

While the figure calls into question the safety of the Australian road fleet, it also raises concerns surrounding vehicular CO2 and other emissions, an issue the recently introduced New Vehicle Efficiency Standard (NVES) could be slow to combat.

Several other developed markets impose harsh tax penalties on the use or retention of older, less efficient vehicles, and/or incentivise the purchase of newer models, but Australian legislation makes no such differentiation.

Although registration fees vary by state and territory, existing vehicles of all fuel types and ages are taxed consistently, offering few incentives for buyers to update or upgrade – Victoria’s unsafe2safe program the only the only scheme of its kind in the country until it was scrapped in 2022.

While economic factors, including cost-of-living pressures are contributing to a higher average vehicle age, it is evident from the table below that countries offering so-called ‘cash-for-clunker’ schemes – or that otherwise incentivise the purchase of newer and/or cleaner vehicles – have a significantly lower vehicle age.

According to 2024 data supplied by the Bureau of Infrastructure and Transport Research Economics (BITRE), Tasmania possesses the oldest registered vehicle fleet in the country at 13.5 years, while the Australian Capital Territory has the youngest at 10.4 years.

BITRE data further notes a significant discrepancy in the age of passenger, commercial, and other vehicle types, noting an 11.1-year average for passenger vehicles, 11.4-year average for light commercial vehicles, 16.2-year average for trucks, and a 13-year average for buses.

According to BITRE, the majority of Australia’s ageing vehicle fleet is powered by petrol (67.3 per cent), ahead of diesel (29 per cent), hybrid (2.2 per cent), battery electric/hydrogen fuel cell (0.7 per cent), and other – including LPG and dual fuel vehicles – at 0.8 per cent.

It would seem that in spite of Australia’s desire to become a country with a higher ratio of new energy vehicles, we are now behind the developed nations’ average age of 11.3 years.

With vehicles lasting on average 11.4 years before they are retired – that average figure suggesting many vehicles on our roads are well into their second decade and beyond –  it will take until at least the middle of the current century to achieve a shift away from the petrol-powered majority, assuming no new government incentive programs are introduced.

The FCAI and MTAA have both lobbied for such programs to be introduced, calling for uniformity across Australian states and territories in “dealing with” older vehicles and the recycling of deregistered vehicles.

It is estimated that around 850,000 vehicles reach the end of their life each year in Australia, generating around 1.36 million tonnes of waste.

In 2022-23, road vehicles in Australia produced an estimated 106 million tonnes of CO2 equivalent, and are the largest source of transport emissions, making up 84 per cent of the total from domestic transport modes.

For context, in 2019, road transport was responsible for 92 million tonnes of CO2 equivalent, with passenger cars (including SUVs and LCVs) alone contributing 49.5 million tonnes, according to Access Environmental Planning.

Average passenger vehicle fleet age by country: