Consumer law failing drivers as EVs and high-tech cars flood market, dealers say

Dealers warn EV drivers of repair and refund delays under warranty from new brands Fri 17 Jul 2026 at 5:31am In short: Dealerships are sounding the alarm over long waits for repairs and refunds for cars under warranty from new overseas brands. More than one in three cars sold in Australia were hybrid or electric in June. What's next? The industry is calling on the government update Australian Consumer Law, which it argues is not fit for purpose regarding modern cars. Drivers are being left stranded without transport for months waiting for repairs, refunds or loan cars under warranty from overseas brands new to Australia and "inexperienced" with local consumer protection laws. Dealerships are sounding the alarm about their growing struggle to get timely authorisation to fix faults and repairs in cars from new manufacturers that have been bringing electric vehicles (EVs) and other heavily software-reliant cars into the market. More than one in three cars sold in Australia were hybrid or electric in June, while the number of models available has grown to more than 150 across more than 40 brands. But dealers have warned Australian car owners are typically being left waiting six to eight weeks for consumer rights to be enforced due to delays for parts, authorisation or other warranty issues that must be signed off by manufacturers. There are now calls on the federal government to update Australian Consumer Law to ensure they are fit for purpose to handle the complexities of modern car repairs and a more diverse market. Problems ranging from language barriers when dealers attempt to make a warranty claim, to delays in securing spare parts — especially EV batteries — due to new manufacturers not having stocks on shore, are outlined in a report commissioned by the Australian Automative Dealer Association (AADA). The report, authored by University of New South Wales emeritus professor Jenny Buchan, found Australia's consumer laws place legal responsibility on dealers, while practical control over car defects increasingly sits with manufacturers. This ultimately has left car owners with uncertainty despite having strong legal rights, with the report warning dealerships may start refusing repairs or offering loan cars as they cannot take on the financial burden. Car owner with disabled children left stranded The issues are related to a range of new brands that have entered the Australian market, impacting customers who purchase EVs and hybrids, as well as conventional petrol and diesel cars with complex computing software. In one de-identified case in the report, a car owner with two disabled children was left without transport for more than six months because of engine troubles. The customer had unknowingly purchased a car with a replacement engine and was told by the dealer who sold the vehicle that it was up to the manufacturer to fix. But soon that car company, described as "new to Australia", stopped replying to emails and was not communicating "at all" until a new dealer trying to help the customer threatened to terminate their dealership. The manufacturer then delivered a "brand new $55,000 car" for the customer to loan and started to communicate with the customer again in line with Australia's consumer laws. In another example, a dealer said a customer was effectively stranded waiting "several weeks" for parts to arrive from overseas to complete a repair as the manufacturer did not keep stocks in Australia. The manufacturer had initially refused to fund a loan car for the customer until the dealer drew the company's attention to their consumer law obligations. The report found delays are even more prolonged if the part required is a replacement EV battery, as they can only be transported by sea. "This means some dealers decide they need to keep one in stock — it's that or wait weeks or months for a replacement to come by ship," the report said. Carrying expensive inventory to limit liability and ensure quick repairs also puts financial pressure on the dealers. Manufacturers attempt to avoid responsibility Under Australian consumer laws, manufacturers must indemnify dealers for costs incurred fixing defects. The report said many manufacturers use "complex flowcharts to avoid responsibility for claims" that could be covered by warranty. It found the administrative burden for a dealer to claim reimbursement for the cost of a repair under warranty was "often inordinate compared to the value of the work". "One dealer quoted that it took six hours to make a warranty claim,"the report said. Some manufacturers also require prior approval for every single warranty claim, and failure to obtain that even for minor repairs results in an automatic denial of compensation for the dealer. Dealers reported long wait times for these approvals, "especially with overseas headquarters". "For instance, [for one brand] issues over $5,000 must go to China for an eight-week approval process," the report found. Language barriers can also "exacerbate" delays, which impact both the customer and dealer. The report said dealers "often feel like the meat in the sandwich because they are legally required to provide remedies to consumers but struggled to get reimbursed by manufacturers for that work". Dealers also cannot recover legal fees even if they win a case in a tribunal. The report warned dealers under pressure from "underpaid warranty work and horrendous loan car experiences" may soon refuse to service certain vehicles or stop offering loan cars altogether. Consumer laws not fit for purpose Australian Automotive Dealer Association (AADA) chief executive James Voortman said Australia's current consumer laws were not fit for purpose for modern cars, particularly electric vehicles (EVs). "We've seen a huge surge of electric vehicles backed up by so many new brands coming into this market — brands you wouldn't have heard about five years ago, and that's a great thing," he said. "It's good to have competition … but those new brands have to support the vehicles they're selling with really good parts supply, with customer service and with guarantees they'll be able to fix a vehicle, replace it, or provide a refund if the vehicle's not working." Mr Voortman said the big problem at the moment was the dealer sits between the manufacturer and customer but was "often hamstrung in terms of what it can offer". "There needs to be changes," he said. "The global manufacturers that operate in Australia need to step up, they need to fulfil their obligations to customers, and they need to work closely with their dealers." Mr Voortman said he believed government intervention was required to provide more clarity in consumer laws as the issue was not going to "resolve itself". "Whether they're electric or petrol or diesel, customers deserve to have vehicles that run smoothly, that do what they're supposed to do," he said. "I think with the growing number of brands entering this market who are inexperienced, frankly, when it comes to the Australian consumer law, we're going to see a lot more customer detriment and that's what we're trying to avoid." Manufacturers insist they can meet demand Aman Gaur is the head of policy at the Electric Vehicle Council, which represents manufacturers, and said members were "confident" they had the supply of parts in place to meet demand in Australia. "These massive manufacturers who are operating in different jurisdictions across the world need to ensure that when Australia, which is theoretically at the end of the supply chain in our part of the world, parts are required, that there is inventory there," he said. Mr Gaur said a benefit of EVs was that they had fewer parts and required less servicing. "So, compared to a traditional ICE [internal combustion engine] vehicle, that will in principle be a shorter period and less of a hassle because you're not searching for as many parts." Professor of Transport, Technology and Sustainability at Swinburne University Hussein Dia said manufacturers that did not rectify issues would face reputational damage and could lose market share as a result. "It's already becoming a very competitive market, especially with the new entries from the China market," he said. "It's not really just about selling more numbers or more cars, it is about making sure the consumer experience throughout the life of the vehicle is a positive one." Professor Dia said he expected there would be a shift in focus to servicing, but warned Australia's EV transition could be hindered if that did not happen. "Word of mouth is very important," he said. "A satisfied customer will probably tempt other customers to follow suit." Push for insurance bonds, locally held financial security The report recommends solutions including requiring local trust funds, insurance bonds and locally held financial security to protect consumers, particularly if newer entrant manufacturers disappear from Australia. It also suggests Australia have specific legal duties for manufacturers, including timely warranty and buyback decisions, bans on retaliation against dealers and presumptions that avoidable manufacturer delays breach good faith. The report also looks at a proposal to establish a national database to record recurring faults, which would help identify systemic manufacturer defects earlier. In making the case for this, one dealer told the report he was aware a certain model of diesel car had a problem with its engine, and another type of car the "airbags continually fail". "Now, there needs to be a database on that, so [dealers] know that it's a manufacturer problem," the dealer said. "Not if it occurred to two cars, but if it's occurred to 10,000 cars, it's obviously a problem." Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh said the Albanese government was "delivering" on its agenda to make markets fairer, boost competition and give Australians a fair go. "The government will consider the report along with other feedback as we progress the 2026 Consumer Ministers' priorities, including work to strengthen the consumer guarantees and supplier indemnification provisions," he said.