Skoda says its EV strategy will prevent price rises under emissions regulations

Skoda Australia says its growing mix of electric vehicles (EVs) will allow it to keep selling petrol-powered cars without passing New Vehicle Efficiency Standard (NVES) penalties on to consumers.

The Czech automaker currently sells two EVs Down Under – the Elroq and Enyaq SUVs – with the pair accounting for approximately 700 sales over the first half of 2026.

That number is expected to rise in the months and years ahead, topping 1300 for the second half of 2026 and 2500 in 2027.

Two additional models – the Epiq small SUV and Peaq large SUV – are set to join the lineup by early 2028, further bolstering Skoda's electric offering.

Combined, Skoda expects its expanding EV range to give it greater headroom under the NVES as it continues selling higher-emitting combustion-powered models.

“We all know what's happening with the NVES – the fines and penalties are outrageously high, and we need to manage that," Skoda Australia head of marketing and product Kieran Merrigan told Australian media in Queenstown, New Zealand.

“The good thing for us bringing in additional technologies that actually help us to comply with the NVES regulations, is it means that we also continue to bring in ICE cars, and we know customers are still demanding ICE cars, and still demanding hybrid and mild-hybrid.

“By having a good mix of BEVs... it allows us to continue offering ICE cars without price increases, without customers having to pay the penalties for us.

"This is a good thing for us. We've got a strategy for NVES, and it's working. And we're pretty clean coming into the next few years from a penalties and credits perspective."

Skoda’s confidence is backed by its early NVES position, with the brand finishing the first reporting period with 86,888 credits and zero liabilities.

First introduced last year, the NVES sees automakers accrue liabilities or credits depending on their performance against fleet-wide emissions targets. Brands that fail to offset their liabilities with credits ultimately face fines.

While some manufacturers are reassessing their combustion-powered lineups under the NVES, Skoda plans to use growing EV sales to offset its petrol models and preserve its broader range – including the more popular Kodiaq and Kamiq – without passing penalties on through higher prices.

The strategy should become more effective as Skoda’s EV volumes grow, particularly once the Epiq and Peaq arrive over the next two years.

By contrast, Ford Australia pointed to NVES as a factor in a $5000 price rise across its Mustang lineup in mid-2025, with a further $1000 tacked on this year.

Mazda is another automaker facing NVES challenges, having accrued 508,517 liabilities over the first reporting period – the highest of any company, and more than twice as many as second-placed Nissan (215,261).

However, it remains to be seen whether the Japanese marque will follow Ford’s lead and pass any NVES-related costs on to customers through higher prices, or purchase credits from net-positive brands such as Skoda.

Alfa Romeo, Aston Martin, Ferrari, General Motors, Honda, Hyundai, KGM, JLR, Mahindra, Maserati, Nissan, Porsche, Rolls-Royce, SAIC Maxus (better known as LDV), and Subaru also missed their emissions targets for the first reporting period.

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