Sales of electric vehicles nearly tripled in Australia last year but average emissions from new cars only decreased by two per cent.
The commission's report, released on Thursday, said that was partly due to increasing sales of SUVs and utes where there were fewer cleaner vehicles options.
More than 43,000 utes were sold in Australia between 2020 and 2021, while large SUV sales rose by about 25,000.
Many of those vehicles emit more than 210 grams of CO2 per kilometre.
Australia is falling behind other countries when it comes to its average vehicle emissions, the report states, with 45 per cent of new cars sold emitting 160 grams or less of CO2 per kilometre.
That's compared to 90 per cent of all new cars sold in Europe.
More needs to be done to encourage Australians to purchase electric vehicles, the commission said in its report.
"Increasing investment in public recharging stations, preferential tax arrangements and other incentives, and the adoption of emissions standards can lead to significant uptake in greener vehicles," the report states.
Battery and plug-in hybrid electric vehicles represent just 0.23 per cent of Australia's 18.4 million vehicles.
About 2.8 per cent of Australia's 2021 car sales were electric.
That's compared to 17 per cent in Europe, 16 per cent in China, five per cent in the United States and 4.4 per cent in New Zealand.
"The National Transport Commission continues to collaborate with governments and industry to develop the data needed to support the commitment of all jurisdictions to transition to a zero emissions fleet," the report said.
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