In its submission to the government, the FCAI this week said it supported introducing a fuel efficiency standard, but was deeply critical of the proposed five-year timeframe to meet the targets, which it argued was too tight.

The chamber said the plan in its current design would significantly lift the price of new cars and force manufacturers of models facing the harshest penalties, such as utes, to consider limiting their offerings in Australia or leaving the country entirely.

“Implementation of the proposed targets on the proposed timeline with the proposed penalties will have a disastrous commercial impact on many original equipment manufacturers [OEMs] and may result in the exit of some models from the Australian market, if not the withdrawal of some OEMs entirely,” it said.

The FCAI did not respond to a request for comment.

The Albanese government rejects the industry group’s claims, saying there is no evidence of fuel efficiency standards lifting consumer prices elsewhere in the world, while lower fuel and maintenance costs for more efficient and cleaner models could save motorists an estimated $1000 per vehicle on average each year.

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In Polestar’s letter on Friday, Johnson pointed to independent modelling from the Grattan Institute think tank, which suggested new car prices were likely to rise by an average of 1 per cent due to the policy, while “lower fuel and maintenance costs mean that consumers will quickly be better off than they otherwise would be – and will be far better off in the long term”.

“When the FCAI commits to representing all voices in the automotive industry fairly, Polestar will consider returning as a full member,” she said.

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