As we move further into 2026, the conversation around the “death of the internal combustion engine” (ICE) has shifted from theoretical debate to legislative reality. For many Australian drivers, the question is no longer if petrol and diesel sales will be restricted, but when.
If you’ve been keeping an eye on state policy or the latest New Vehicle Efficiency Standards (NVES), the landscape is changing rapidly. Here is the current state of play for the future of new car sales in Australia.
The ACT Leads the Charge
The Australian Capital Territory remains the only jurisdiction with a firm legislative “ban” on the books. From 2035, the sale of new light internal combustion engine vehicles will be prohibited in the ACT. Their goal is clear: a 80–90% Zero Emission Vehicle (ZEV) sales share by 2030, transitioning to 100% by the middle of the next decade.
The State-by-State “Soft” Phase-Out
While other states haven’t followed the ACT’s lead with a hard ban, they are using “targets” and “aspirations” to steer the market.
- New South Wales: The state’s Electric Vehicle Strategy aims for the “vast majority” of new car sales to be EVs by 2035. For regional drivers—from the coast to the Riverina—the focus has been heavily on the “Fast Charging Masterplan” to ensure that the transition doesn’t stop at the Sydney basin.
- South Australia: They have set a vision for 100% of new passenger vehicle sales to be ZEVs by 2035.
- Victoria: A target of 50% of new light vehicle sales to be ZEVs by 2030 is currently in place.
The Real “Curb”: The New Vehicle Efficiency Standard (NVES)
While state bans make headlines, the New Vehicle Efficiency Standard is arguably doing more of the heavy lifting. As of early 2026, we are seeing the full impact of these standards on dealership floors.
The NVES doesn’t ban a specific car, but it sets an emissions “budget” for manufacturers. If a brand wants to sell a high-emitting diesel ute, they must offset it by selling a high volume of low or zero-emission vehicles. If they don’t, they face significant penalties. This is naturally curbing the supply of traditional ICE vehicles and making EVs more price-competitive, particularly through novated leasing structures.
What About Regional Australia?
One of the biggest hurdles for these government plans is ensuring that regional hubs—places like Wagga Wagga, Albury, or Dubbo—aren’t left behind. The “curb” on ICE vehicles only works if the charging infrastructure keeps pace with the policy.
We are seeing a massive influx of “Elite” level EV models (like the latest offerings from Hyundai and Tesla) appearing in regional driveways, proving that the range and infrastructure are finally meeting the demands of long-distance Australian driving.
The Bottom Line
You will still be able to drive your current petrol or diesel car for years to come. These plans almost exclusively target new car sales. However, as manufacturers pivot their production lines to meet Australian standards, the variety of ICE vehicles will naturally dwindle, replaced by more efficient, quieter, and increasingly capable electric alternatives.
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