Australia Waters Down Fuel Emissions Laws in Blow to Tesla (1)

Australia’s government has bowed to political pressure and growing public backlash to water down planned vehicle emission standards, handing a potential win to Ford Motor Co. and Toyota Motor Corp. at the expense of electric car maker Tesla Inc.

The new fuel efficiency standards will still come into effect on Jan. 1, 2025, as originally intended, but following consultation with the auto industry, the start date for automakers accruing debits and credits has been pushed back until July 1 that year.

In addition, the government said Tuesday it will adjust emissions limits for heavier cars, such as the top-sellingFord ...