The proposal will place a pollution cap on all new cars below 3.5 tonnes, with small cars limited to 141 grams of carbon dioxide equivalence (CO2-e) per kilometre and 199 grams for large cars, vans and utes.

It comes after the Australian automotive industry has failed to meet its voluntary emissions targets for the past three years.

Carbon Zero Initiative principal Jack Redpath said Tasmania was particularly in need of the NVES, with the state being home to "some of the oldest and highest emitting vehicles" in the country.

"The average age of vehicles is 13.2 years, and the emissions per person is 3.3 tonnes per year, with 88 per cent of Tasmanians using their cars daily," he said.

"That means Tasmanians stand to save around $500 million and 1.74 million tonnes of CO2-e per year by making the switch to electric vehicles (EVs) and low emission vehicles."

Transport emissions account for 19 per cent of Australia's greenhouse gases, while in Tasmania that figure climbs to 25 per cent.

Mr Redpath said Tasmanians would stand to benefit from the proposal in a future without fossil fuels.

"With abundant clean energy, the island is an ideal place for electric vehicles and the savings they unlock," he said.

"The shift to low emissions vehicles not only slashes pollution but also opens avenues for local job creation, economic growth and sustainable tourism whilst demonstrating Tasmania's leadership in the clean energy transition."

EVs are a rapidly growing industry in Australia. Sales accounted for 7.2 per cent of the market in 2023, up from 3.2 per cent in 2022.

But of the 21,150 vehicles sold in Tasmania last year, the highest ranking models were all powered by petrol or diesel.

Although the Tesla Model Y cracked the top ten in New South Wales, Victoria, Queensland, Western Australia and the ACT, Tasmanian buyers preferred larger vehicles.

The Toyota HiLux, Isuzu D-Max, Mitsubishi Outlander and Subaru Outback filled out the rankings, with the Ford Ranger topping the sales figures.

Its base model produces about 200 grams of CO2-e per kilometre while its double cab Raptor four wheel drive variant can exceed 300 grams in urban environments.

Ford and Toyota recently came under fire for producing the most emissions of any automotive manufacturers in Australia, contributing 309,560 CO2-e and 547,919 CO2-e respectively.

Data released by the Climate Council revealed that the emissions were comparable to large-scale coal mines such as Narrabri Underground Mine and Hunter Valley Energy Coal.

Climate Council Chief Executive Officer Amanda McKenzie said the brands were "getting off scot free" because their emissions weren't being regulated.

"They've used Australia as a dumping ground for their most polluting vehicles for years, while offering more efficient vehicles in countries that have regulation," she said.

"That's why Australian vehicles use 20 per cent more petrol than American vehicles, which we pay for with our wellbeing and at the hip pocket."

Head of advocacy Dr Jennifer Rayner said all leading brands had made public commitments to reduce climate pollution from their fleets.

"At the same time, they are trying to water down an effect New Vehicle Efficiency Standard that could help them get there. It's hypocritical and dishonest," she said.