Fuel-efficiency standard will drive more electric Toyotas

Toyota is prepared to expand its petrol-electric hybrid vehicle (HEV) range, accelerate its battery-electric vehicle (EV) plan and introduce plug-in hybrid (PHEV) models to Australia if an upcoming commonwealth Fuel Efficiency Standard (FES) demands it.

But Australia’s auto market leader remains a staunch advocate for the diesel-powered utes and heavy-duty 4x4s it sells by the tens of thousands annually in Australia and seems increasingly confident the new rules will allow it to continue doing so.

Around 2700 submissions on the proposed FES were submitted by the May 31 closing date, with the federal government promising to detail its plan by the end of 2023 ahead of the introduction of legislation to parliament next year and possible introduction in 2026.

Toyota made a submission on the FES, but the federal government has not published it.

The FES will impose a CO2 emissions cap on internal combustion engined (ICE) vehicles and encourage the purchase of zero-emissions battery-electric vehicles.

The debate is how stringent the CO2 cap would be and how soon. While some FES submissions urge a ban on the sale of new ICE vehicles by 2035 – as per proposals in Europe and the Australian Capital Territory (ACT) – Toyota is arguing for a “technology agnostic” stance that would allow ICE to continue far longer.

“We don’t debate the need to get to carbon neutrality,” Toyota Australia sales and marketing chief Sean Hanley said. “We just debate how and when to get there.

“We just want to get to a [FES] position where it’s fair for the Australian public and the Australian motoring public and what they do with their cars. And I think they [government] are making inroads into that.”

Toyota’s position has drawn flak from environmental group Greenpeace in particular.

Currently, Toyota Australia has committed to launching three EVs by the end of 2026, led by the freshly delayed bZ4X mid-size SUV. It has also committed to electrify more than 50 per cent of its sales by 2025.

Hanley said both commitments remained unchanged at this time, but could be modified by the requirements of the FES.

“FES will play a role somewhere in the future, it’s meant to,” he said.

In relation to the 50 per cent target, Hanley specifically nominated PHEV as part of the electrified mix.

“It is our ambitious target, but one we are expecting [to achieve],” he said.

“What we are talking about are hybrids, plug-in hybrid and BEVs, and hydrogen fuel-cells to a lesser extent.”

Toyota has yet to launch a PHEV in Australia, preferring to focus on hybrids, which it has sold here for more than 20 years.

However, at last week’s new product showcase in Melbourne, Hanley specifically acknowledged the possibilities of a petrol-electric PHEV version of the new Prado coming to Australia next year.

Hanley also acknowledged the FES increasing the chances of a move by Toyota Australia to an all-hybrid line-up of passenger cars and SUVs. Toyota will only sell electrified vehicles in western Europe by 2030.

Petrol-electric hybrids already dominate the sales of models like the RAV4, Corolla Cross and Camry. The new C-HR will be exclusively hybrid when it arrives in 2024.

“It’s quite conceivable that at some point we will move, [but] I don’t think that would be a massive impact on [sales]… for passenger cars and SUVs,” he said.

But Hanley argued the opposite would be true for diesel-engined commercial vehicles such as the HiLux ute and LandCruiser 4x4. Making it too restrictive for them to be sold affordably – or at all – would prompt owners to hang on to older, dirtier vehicles, rather than trade-up to newer models, he said.

Toyota Australia will soon introduce mild-hybrid 48-volt diesel technology in some members of its light commercial vehicle range. But there are no signs of diesel-electric hybrid or plug-in hybrid powertrains, while battery-electric LCV powertrains are only being shown in concept form.

“It’s about taking everyone on the journey and doing it in a way that’s sustainable, practical and affordable,” said Hanley of the transition away from ICE.

“If you don’t, who is going to get rid of those LandCruisers that are doing those 800km ranges… they are going to keep them and keep them for a long time.”

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