Automotive Regulators Balance Safety and the Environment

Recent product regulation in Australia for the automotive industry has primarily focused upon matters related to safety issues and environmental impact. Many reforms in the product safety space speak to specific risks associated with e-micromobility and associated lithium-ion batteries used in such products, whilst the environmentally focused regulations largely relate to emissions.

The multifaceted source and angle of new regulations in Australia’s automotive sector have resulted in a large volume of complex and varied additional requirements. Manufacturers and suppliers must continue to be aware of and implement the growing regulatory requirements applicable to them, all with varying effective dates.

Further, the industry should be aware of the emerging patterns and trends from these changes to help pre-empt future developments and to adopt a policy-driven focus for implementation. This approach is always recommended when businesses have demands to comply with multiple competing priorities.

Product safety regulations

The sweep of vehicle safety reforms in Australia have largely developed in response to both domestic incidents and concerns further abroad. In particular, regulators are looking at those repeated or serious incidents that indicate systemic issues that warrant a policy response.

Autonomous Emergency Braking Regulation

Following a number of recent amendments to Australian Design Rules (ADR) as part of an overall push for road safety, several design rule changes have been implemented to mandate the inclusion of Autonomous Emergency Braking Regulation (AEB) systems in new vehicles. Specifically, from 1 March 2025, ADR 98/00 requires all new vehicles in Australia equipped with AEB systems to meet specific technical standards. The purpose of the legislation is to reduce road collisions.

As a result of these new regulations, several manufacturers have withdrawn from sale or discontinued production of several affected models that do not currently comply with the standards.

E-Micromobility Safety Standards in NSW

The New South Wales (NSW) government has recently implemented new product safety and information requirements for e-bikes, e-scooters, e-skateboards, self-balancing scooters, and the lithium-ion batteries used to power these devices.

There is a staged approach to the implementation of the standards. The new standards were announced and gazetted in August 2024. New product criteria were released on 1 February 2025 with enforcement for the information requirements starting on 19 February 2025. Enforcement of mandatory testing and certification will begin in August 2025, followed by mandatory labelling requirements being enforced in February 2026.

The reforms regulate these products from multiple angles. For example, the new manufacturer standards and safety standards regulate issues relating to design and manufacture. In comparison, the information standards address consumer-facing material provided at points of sale.

Safety Standards

The e-micromobility products identified above are now classified as ‘declared electrical articles’ under the Gas and Electricity (Consumer Safety) Act 2017. From 1 February 2025, such products therefore need to comply with mandatory safety standards attached to this classification before they can be sold in NSW.

Several products, including e-bikes, e-scooters, e-skateboards, hoverboards and batteries for e-bikes, e-scooters, e-skateboards, and hoverboards, must comply with one of a list of applicable technical standards. These requirements are a combination of technical and commercial standards developed jointly by Australia and New Zealand (AS/NZS) and European standards (EN), as well as third-party standards from International Electrotechnical Commission (IEC) and Underwriters Laboratories (UL). The relevant products must undergo sample testing by an accredited test laboratory, such as the Australian National Association of Testing Authorities, to be considered in compliance with these prescribed technical standards.

The testing documentation should be submitted to NSW Fair Trading or any other recognised external certification scheme, which includes other state-based electrical safety regulators. That certifying body, once satisfied with the documentation, will issue a certificate of approval for the product in line with the required product marking. This marking must be legible and permanent and show the model reference code of the device. The cost of certification processes, which is in addition to testing costs, is approximately AUD1,200, and the process spans a week if all the correct information is provided at the start.

The aim of these requirements is to ensure products are manufactured to the highest safety standard. This approach mitigates the significant fire risk these products otherwise pose. Further, the standards aim to ensure only safe and compliant products are sold in NSW.

Information Requirements

NSW has also introduced a complementary Information Standard for lithium-ion e-micromobility devices sold in NSW under the Fair Trading Act 1987. The standard came into effect on 19 February 2025 and regulates the information provided to consumers at the point of sale or supply.

Under the standard, suppliers must provide clear and accurate information at the point of supply, including details of safe use, charging, storage, fire prevention, and disposal of devices and their batteries. In addition, they are required to prominently display the following statement on websites or near vehicles: “Before using this vehicle, check the applicable local laws relating to your intended use of the vehicle on roads and road related areas.”.

Whilst NSW Fair Trading has produced an exemplar template for suppliers to follow, there is no prescribed format or wording.

Environmental regulations

Introduction of a New Vehicle Efficiency Standard

The New Vehicle Efficiency Standard Act 2024 (NVES) came into effect on 1 January 2025. The new standard requires vehicle manufacturers to meet a set average CO2 target for the new vehicles they produce. This target will become progressively stricter every year from 2025 to 2029 to encourage the sale of lower emissions vehicles.

Key applicable requirements will apply from 1 July 2025 following the intervening implementation period.

Conclusion and commentary

Whilst there is interoperability and a complementary aspect to the two regulatory areas of safety and protecting the environment, many of the reforms implicitly speak to the growing tension between the two. For example, the increased use of e-micromobility products based on consumer’s environmental concerns has been cited by regulators as the source of increased risks uniquely presented by use of these products categories. These hazards include thermal runaway events of the lithium-ion batteries that tend to be larger within the e-micromobility product category. As a result, there is more regulation of these products.

Further, there has been a move towards state-based product safety regulation in Australia. Historically, the remit of state-based regulators has been minimal. NSW’s use of powers to create distinct regulatory requirements, such as those around e-micromobility, is potentially indicative of a shift in approach and a more complex and layered regulatory enforcement environment going forward.

Additionally, these legislative reforms have recently come under criticism from industry and consumers alike. Whilst the societal aims of the legislation may be considered admirable, the multifaceted approach taken to regulation and general increase of requirements on the automotive sector has been criticised by both industry and consumers as potentially stifling the market or innovation.

In particular, given the reliance on vehicles as a core component of Australian transport infrastructure, the increased price associated with the higher regulatory burden may be seen as prohibitive for those attempting to secure low-cost vehicles in Australia. Further, the discontinuation of certain popular cars in Australia based on new obligations, such as the new AEB requirement, has been seen as problematic in a jurisdiction where supply of products is more limited already. In addition, access to affordable vehicles is not just a luxury but a necessity given the country’s heavier reliance on cars as a mode of transport than elsewhere in the world.

This article was originally published as part of the Sedgwick brand protection Australian Recall Index.