TL;DR: Australia's automotive industry is caught between two transitions: a persistent workforce shortage driven by skills attrition and weakening apprenticeship pipelines, and an accelerating shift toward low-emission vehicles driven by the NVES. High worker mobility can drain the pool of experienced technicians available to retrain, while EV qualification enrolments remain critically low. As various OEMs expand their presence and emissions targets tighten through to 2029, the risk of a skills gap between the vehicles on Australia's roads and the workforce equipped to service them is growing. Addressing this requires coordinated action across training, industry and policy.
This month, the Research Bulletin covers:
Australia's automotive industry is navigating a dual transition, one that is reshaping both the vehicles on its roads and the workforce behind them. The National Vehicle Efficiency Standard (NVES), now in its first year of operation, is beginning to alter which vehicles enter the Australian market and at what cost. At the same time, persistent skills shortages, declining apprenticeship pipelines, and shifting worker mobility patterns continue to strain an industry that employs more than 310,000 people. These pressures do not operate in isolation; the commercial decisions of manufacturers are increasingly shaping the skills demand employers face on the workshop floor. This bulletin examines the intersection of these forces: the labour market conditions confronting automotive employers today, and the regulatory and market dynamics that will define the workforce challenges of tomorrow.
Preparing Australia’s workforce for the next transition
Australia has navigated a major automotive workforce transition before. When the last locally manufactured passenger vehicle rolled off the production line in 2017, the end of mass car manufacturing triggered significant job losses across South Australia and Victoria, as major manufacturers closed operations and supply chains contracted.
The policy response included adjustment packages, retraining initiatives, and regional support programs to help re-integrate the workforce. Many re-entered the workforce but in less secure roles with fewer entitlements. Australia faces a wave of industrial transition driven by electric vehicles, automation, and new energy systems, which is steadily reshaping skills across automotive-linked industries and mining.1
Ongoing challenges in the automotive industry
The automotive industry still struggles to fill key roles, with a significant proportion of positions remaining unfilled for extended periods, highlighting persistent recruitment challenges. Around 38% of vacancies remain unfilled despite being open for an extended period or are withdrawn due to a lack of suitable applicants, and 31% take longer than 3 months to fill, and fewer than 9% of roles are filled within four weeks.2 Employers are facing sustained difficulties in attracting suitable candidates (Figure 1). There has been a decline in participation in traditional trade pathways, alongside intensifying competition for skilled workers across sectors such as mining, construction, and energy.
Figure 1: Why employers struggle to fill positions, reasons by frequency cited
Source: MTAA, “2026 Occupation Shortage List consultation”, March 2026.
Is one person’s mobility another person’s attrition?
Job mobility is an important feature of any economy, allowing workers to move between industries in response to changing demand and wages. This can allow for the movement of skills to careers with acute shortages. But it can also create shortages; what is mobility for the worker is attrition for the employer. For trades such as motor mechanics, this can mean shifting to higher-paying roles in sectors like mining, construction, agriculture or other sectors where their skills are transferable.3 While this movement supports overall economic flexibility, it also reduces the availability of qualified workers in automotive roles (Table 1).
Motor Mechanic (general) represents 22.06% of all occupations within the automotive industry, making it the largest single occupation in the sector and a key indicator of broader labour conditions.4 The job mobility data shows that inflows (88.74%) and outflows (92.07%) of Motor Mechanic (general) are heavily concentrated within this occupation, suggesting that workforce movement is largely centred around the motor mechanic occupation itself (Table 1). However, there is still inflow from related trades such as Motor mechanics nfd5 (23.09%), Diesel Mechanics (0.63%), and Truck Drivers (0.18%), highlighting the transferability of technical skills across the broader automotive sectors.
Table 1: Job mobility of Motor Mechanic (General), 2020 - 2021
Source: JSA, “Data on Occupation Mobility: Unpacking Workers Movement”, 30 January 2024. Note: Motor Mechanic (General) is included because it demonstrates notable workforce mobility within and outside the automotive industry. Inflow of occupation refers to the number of workers transitioning from other occupations into a Motor Mechanic (General) role. Outflow of occupation refers to the number of Motor Mechanic (General) transitioning to work in other occupations.
Automotive occupations draw workers from a mix of roles, including service roles, labouring, transport, retail, and related technical occupations. Strong inflows come from roles such as Labourers nec,6 Storeperson, Truck Drivers (General), and Sales Assistants (General), indicating strong mobility from general labour, logistics, transport, and retail pathways. There is also notable movement from other technical trades, such as Motor Mechanic (General), into specialised automotive roles (Figure 2).
Figure 2: Inflow of key Automotive occupations, 2020 - 2021
Source: JSA, “Data on Occupation Mobility: Unpacking Workers Movement”, 30 January 2024.
Automotive workers mainly move into related technical, transport, retail, labouring, and management occupations. Motor Mechanic (General) has the highest retention within the same role, while common transitions include moves to Truck Driver (General), Storeperson, Sales Assistant (General), and management positions (Figure 3).
Figure 3: Outflow of key Automotive occupations, 2020 - 2021
Source: JSA, “Data on Occupation Mobility: Unpacking Workers Movement”, 30 January 2024.
The workforce pressures outlined above do not exist in a policy vacuum. NVES, which came into effect in January 2025, is set to materially reshape the composition of Australia's vehicle fleet, and with it, the skills employers will need. This matters particularly for occupations like Diesel Motor Mechanic, where high outflow rates already signal a workforce that is mobile and responsive to opportunities elsewhere, leaving automotive employers with a narrowing pool of workers to retrain as vehicle technology evolves. As the NVES progressively tightens CO₂ emissions targets through to 2029, it will accelerate the shift toward electrified and lower-emission vehicles, intensifying demand for technicians qualified to service them. Yet, enrolments in EV-specific qualifications remain critically low relative to projected fleet growth. The risk is that a regulatory framework designed to change what Australians drive outpaces the workforce system's capacity to train those who will keep those vehicles on the road.
Current performance against emissions reduction targets
In February, the NVES Regulator published the results for its first partial performance report, which ran from 1 July 2025 to 31 December 2025.7 Overall, 68% of manufacturers beat their targets and generated over 17 million NVES units (or credits), while some like General Motors, Hyundai, Nissan and Mazda accrued comparable liabilities (or debits).8 Notably, Ford actually accrued an allocation of 426,261 NVES units,9 despite its criticism of the NVES.10 For comparison, this volume of units was roughly the same as the highest number of NVES liabilities allocated, which was 508,517 accrued by Mazda.11
The New Vehicle Efficiency Standard's targets for Type 2 vehicles12 were revised downward before implementation to address industry concerns,13 which may have allowed some such vehicles already coming to market to generate compliance credits in early years rather than requiring genuine emissions reductions (Figure 4).14 In practice, certain popular Type 2 vehicles like utes and SUVs already sat below the revised Type 2 thresholds,15 meaning manufacturers could accumulate credits early before facing potential liabilities as targets tighten in later years. Ford's decision to discontinue its 2WD Everest variants, which would have faced stricter Type 1 emissions standards, also illustrate how manufacturers are navigating such rules rather than necessarily changing the emissions profile of their fleets.16
Figure 4: Originally proposed and final emissions targets for Type 2 vehicles
Source: Originally proposed targets adapted from ‘Option A’ in Department of Infrastructure, Transport, Regional Development, Communications and the Arts “Cleaner, Cheaper to Run Cars: The Australian New Vehicle Efficiency Standard – Consultation Impact Analysis,” February 4, 2024. Final targets adapted from Department of Infrastructure, Transport, Regional Development, Communications and the Arts, “Complying with the NVES: Your obligations”, 13 January 2026.
Future considerations for emissions reduction targets
As the NVES tightens through to 2029, the composition of Australia's vehicle fleet will shift materially toward electrified and lower-emission models. This will cascade into transitions in diesel diagnostics, transmission servicing, and exhaust system work, which will gradually give way to battery management, thermal systems, and high-voltage safety protocols. Occupations like Diesel Motor Mechanic, which already show high outflow rates, face a compounding challenge: not only are experienced workers leaving the trade, but the technical content of the role itself is changing underneath those who remain.
The NVES is also reshaping which manufacturers are best placed to compete. As countries with clear emissions targets become more attractive destinations for low-emission vehicles, the local market is expected to see increased availability of EVs and plug-in hybrids alongside a gradual reduction in higher-emission models. With 12 Chinese OEMs already representing 26 brands in the market, and that number expected to potentially double within 3 to 5 years, brands with strong electrified line-ups are well positioned to benefit.17 Each new OEM entering the market brings vehicle technologies that workshops may be unfamiliar with, adding another layer of skills demand on top of the broader EV transition.
Australia's automotive industry has weathered significant disruption before. But persistent vacancy fill challenges, structural worker mobility, tightening emissions targets, and the rapid entry of new OEMs are all converging on an industry whose training pipeline is already under strain. The partial NVES performance data offers an early signal that the market is beginning to move. The skills supply pipeline needs to be agile, responsive, and develop flexible teaching and learning mechanisms to ensure we are able to maintain, service, and repair our fleets.
The way forward
For government
- Improve labour mobility and vacancy fill rates through national training harmonisation
- Provide transition support packages for displaced workers in declining industries to reduce financial barriers to switching jobs
- Share public reporting of progression outcomes in government-funded training and employment programs
For research
- Measure the effectiveness of VET and employment programs using longitudinal data like career growth, job quality and retention rate
- Case studies on the skills gaps in addressing job transition challenges
- Research in declining apprenticeship uptake in some automotive trades
- Develop clear career progression frameworks within the automotive industry supported by structured upskilling pathways that enable workers to move from entry-level roles into advanced and supervisory positions.
For industry
- Explore solutions to formal reskilling pathways that allow workers to transition between roles within firms
- Partner with VET providers to provide job-linked training pathways
- Track career progression timeframes within and across roles to understand average duration for advancement to identify bottlenecks.
1 Contemporary Social Science, “Just transitions in the Australian automotive sector?”, 5 March 2024.
2 MTAA, “2026 Occupation Shortage List consultation”, March 2026.
3 Explore Careers, “Uncover Exciting Alternative Careers for Mechanics!”, 28 July 2025.
4 ABS, “2021 Census data”, 2022.
7 Department of Infrastructure, Transport, Regional Development, Communications and the Arts, “2025 NVES performance period results,” 13 March 2026.
10 Drive, “Ford threatens end of Australian engineering without government help,”, 6 March 2026.
11 Department of Infrastructure, Transport, Regional Development, Communications and the Arts, “2025 NVES performance period results”, 13 March 2026.
12 Note: Type 2 vehicles include SUVs, 4WDs, and some light commercial vehicles like vans and utes. Type 1 vehicles include sedans, hatch backs and all other light passenger vehicles. Heavy vehicles, in contrast, are fully exempted from the NVES.
13 MTANSW, “Government listens to the MTAA advice to develop a workable Fuel Efficiency Standard”, 26 March 2024.
14 Department of Infrastructure, Transport, Regional Development, Communications and the Arts, “Complying with the NVES: Your obligations”, 13 January 2026.
15 Carsales.com.au, “New Ford Ranger fuel consumption figures confirmed,”, 28 June 2022.
16 CarsGuide, “Ford forced to axe cars due to government emissions regulations: 2025 Ford Everest 2WD ditched in Australia as NVES bite, with the Isuzu MU-X in danger too,”, 25 February 2025.
17 Pitcher Partners, “The tightening pathway – compliance challenges and strategic decisions”, 9 January 2026.
About the author
Kayley Ooi
Kayley is a Research Analyst in the Workforce Planning and Policy team. She turns complex data into forward-looking insights.
About the author
Sam Hughes
Sam Hughes is the Senior Research and Policy Adviser in the Workforce Planning and Policy team. Sam specialises in all things policy with a strong motivation for working out the unknown and determining policy impacts.
About the author
Dr Aneeq Sarwar
Dr Aneeq Sarwar is Senior Manager, Workforce Planning and Policy at AUSMASA, overseeing our research, workforce planning, and policy functions. Dr Sarwar is an experienced research leader who has managed quantitative and qualitative research projects across industry, academia, and for government.