Drive to survive: Toyota, Mazda, Ford and more, we rate the best-selling brand's chances to boom or bust under the new emissions standards

Despite their best efforts to buy more time, the Australian car industry is now on the clock to cut emissions or face millions of dollars in penalties by the end of the decade.

As I wrote last week, industry insiders say the implementation of the Federal Government’s New Vehicle Efficiency Standard will mean some car brands will simply not be able to meet the CO2 targets and will likely exit the Australian market.

So, this week we’re taking a look at how the best-selling brands are shaping up as the countdown to 2029 and its targets of fleet average of 58g/km of CO2 for passenger cars and 110g/km for light commercial vehicles looms large.

Each brand has a variety of techniques they can use to reach these figures, from the obvious (selling models with zero or very low CO2 emissions) to the more complex, such as buying ‘credits’ from rival brands. In a nutshell, manufacturers who beat the government’s targets will be awarded ‘credits’ which can then be sold to brands who don’t make the CO2 figure. This puts all-electric brands such as Tesla and Polestar in the box seat to sell ‘credits’ to other brands with fewer low emissions vehicles and make a profit from NVES.

What that really means, is the brands that either cannot, or choose not to, hit the official target, can still avoid fines and punishment for emitting more.

However, regardless of NVES, the reality was always that the Australian new car market was always going to look very different in 2029 than it does in 2024, in the same way it looks different than it did in 2019. For example, back in 2019 Holden was still a top 10 selling brand and Tesla was still a relative minnow. Fast forward to the 2023 sales charts (the last full year results) and not only is Holden gone but Tesla is now the eighth best-selling brand in the country and brands like MG and BYD have emerged to give the more established players a shake-up.

So, who has studied for the NVES test and who needs to start cramming to catch up? 

Toyota

On the surface Toyota looks to be in a difficult position. Despite leading the market in hybrid vehicle sales, hitting the 2029 target will still be no easy feat as the brand has a singular electric vehicle and a strong dependence on utes and large SUVs.

However, there are several factors that play to the brand’s strengths, namely its size and resources, but also the concession that body-on-frame SUVs (such as the LandCruiser and Prado) can be measured to the light commercial vehicle (LCV) standard. Toyota may be a latecomer to the EV party, but it has the money and resources to rapidly accelerate in the second half of the decade.

The bZ4X may be the first Toyota EV but it certainly won’t be the last, with the company already openly discussing additions including an SUV with the LandCruiser badge and confirming it should have three more on sale locally by 2026.

And, worst case, if the brand is struggling to wean off its diesel-powered SUV and ute dependency, it has the capital to pay for credits to keep it in the government’s good books.

Mazda

Mazda is arguably the brand with the biggest question mark as we head into the NVES future. It’s thriving under the current market conditions, selling its wide array of SUVs in huge numbers and comfortably sitting second on the sales chart.

However, it only has two plug-in hybrids (PHEVs) and has already dropped its sole EV, which does not position it well for NVES and its stricter emissions standard. What’s more, Mazda Australia is an outlier in the brand’s global fortunes, performing well above its usual position in any other market. It’s a minnow in the USA and Europe, so it lacks the depths of resources that Toyota can draw upon to accelerate its progress towards a lower emissions future.

On the plus side, it’s expected both the incoming CX-70 and CX-80 will add to its PHEV range and the high-volume models, such as the next-generation CX-5, will introduce hybrid powertrains too.

It has signed a partnership with China’s Changan Automobile to develop EVs and has publicly committed to adding a new scalable electric architecture for a range of battery-powered models starting in 2027. However, that’s a global figure, so there’s no confirmation on when they will reach Australian showrooms.

There is a pathway for Mazda to reach the NVES targets, but it will take a lot of hardwork and a huge investment in new technology to get there.

Ford

On the one hand the Blue Oval brand is almost entirely dependent on its Ranger ute and Everest SUV spin-off, which is bad. But, on the other hand, the brand has invested billions in EVs globally and has already begun introducing them locally (Mustang Mach-E and E-Transit).

The Ranger and Everest will be classified as LCVs and have a PHEV powertrain already on the way, with potential for an all-electric version too (if rumours are accurate), so there’s reason for optimism there; assuming consumers embrace a PHEV ute. 

However, the passenger vehicle side is much less clear-cut, with Australian consumers already avoiding Ford’s non-Ranger products with internal combustion engines, so convincing them to try their EVs will be challenging. They should have options though, with the Mach-E set to be joined by the Puma Gen-E and the all-electric Explorer an option. 

But, almost 90 per cent (89.3%) of its total sales in 2023 were Ranger and Everest, so that will be the brand’s priority if it wants to survive this decade and thrive beyond 2030.

Kia

The South Korean brand is one of the better-placed brands, as it has already begun its EV expansion, has introduced more hybrid models and is reportedly readying an electric ute.

With the Niro, EV6 and EV9 already on sale and the EV5 and EV3 set to join soon, Kia is arguably ahead of the curve for the established brands. Further EV growth will only help drag down its fleet average, even with the introduction of its diesel-powered Tasman ute. That’s because the Tasman will be its only LCV and an electric variant - or alternative - is believed to be on the way.

Like most brands, Kia is heavily reliant on SUVs but it has remained in the smaller passenger car segments, which potentially give it flexibility.

Hyundai

Hyundai is in a similar position to its stablemate, Kia. Having made an early move into the EV space, Hyundai is well-placed to expand its EV line-up (the full-size Ioniq 7 is due later in 2024) and will also expand into the lower end of the electric market soon too; with a version of its Casper small SUV.

The company is also positioned to move into the LCV market with an all-electric ute, which will help its situation on that side of the equation.

Mitsubishi

Mitsubishi was one of the first brand’s to introduce an electric car (the i-MiEV) and embraced PHEVs long before anyone else (Outlander PHEV). But the i-MiEV came and went quickly and the brand’s line-up is ageing (the ASX is 14 years old) with no clear confirmation of what’s coming in the future; at least publicly. 

The good news is the brand is part of the ‘Alliance’ with Nissan and Renault, so there is EV technology to draw on to support the existing PHEV knowledge. Just how fast Mitsubishi can react and evolve remains unclear but no established brand will meet NVES without some pain.

MG

As a newer brand in the Australian market, and one with deep resources from its Chinese headquarters, MG should have little trouble offering the products it needs to meet the NVES goals. The real test will be, can it get enough EVs and low emissions vehicles to market for a price that remains appealing to customers?

MG’s initial success has, with all due respect to the brand’s engineers and designers, been led by its value. Transitioning to more EVs and hybrids will potentially push the cost up, as we’re already seen signs of, with the MG4 creeping up from its initial sub-$40k ask.

Tesla

The American brand is in the box seat for NVES. It produces zero CO2 emissions and therefore will rack up credits it can then sell to make profit from. It’s been a key part of its business model since the beginning so NVES will only improve its Australian operations.

The bigger question is - what will Tesla be offering in 2029? Because as popular as the Model 3 and Model Y are now, it will need to evolve and potentially expand to maintain its sales numbers.

Subaru

Subaru has publicly confirmed it will launch three new EVs, sharing development with Toyota as it did on the new Solterra. Precisely what those models will be and when they’ll arrive remains an internal secret for the brand, but it does help its NVES outlook.

The difficulty for Subaru, like so many brands, will be convincing its buyers to make the switch from ICE to EV, particularly if the sticker price doesn’t come down sharply in the near-future.

Isuzu

The decision to classify the MU-X as an LCV is a big win for Isuzu, but the company is still up against it getting its current diesel-only line-up to the 110g/km 2029 target. Which is why it recently revealed both a mild-hybrid and an all-electric version of the D-Max, dramatically improving its NVES outlook.