Hyundai ditches diesel for its ute

Traditional turbo-diesel power has been ‘95 per cent’ ruled out for Hyundai’s upcoming Ford Ranger and Toyota Hilux rival that’s due to arrive in Australia before the end of the decade.

The abandonment of the orthodox ute powertrain in favour of electrification appears locked in despite the current tariff uncertainties trigged by President Trump slowing down the finalisation of Hyundai’s long overdue ute plan.

“I would say it’s … less than five per cent chance of something like that (diesel) happening,” Hyundai Australia’s new CEO Don Romano told carsales.

“More likely, we’re going to take the higher road and go for an alternative drivetrain.

“I don’t think Australia needs another diesel ute. I don’t think the world needs another diesel ute.”

Romano was speaking during and after last week’s Hyundai Ioniq 9 launch (review coming later this week), where he offered an update on his May promise to get a dual-cab ute on-sale in Australia by 2029.

He stressed the urgency of the ute decision for Hyundai.

“We’re working at full speed on this [ute program],” Romano said. “I’ve just got back [from overseas] and this is the highest issue next to getting the tariffs resolved.

“Get the tariff issue resolved, and the ute is right under it. And not just for Australia. Australia is a big part of it, but we also have a lot of other markets that will also be part of it.

“The US will be part of it, they sell a lot of trucks in North America.”

The lack of a contender in the popular ute segment has been an ongoing saga for Hyundai in Australia for years and one Romano, at his first meeting with the Aussie media in May, vowed to fix.

Now, he says, a number of issues are discouraging the take-up of diesel:

Emerging Australian ute sales trends show diesel is down in 2025 as models such as the BYD Shark 6 petrol-electric ute take a chunk of the market.

Australia’s newly introduced NVES CO2 reduction rules will penalise diesel engine CO2 emissions heavily by the end of the decade.

The plan is to sell the Hyundai ute in the US market, where it would fight the Ford Ranger, Toyota Tacoma and Chevrolet Colorado in the mid-size segment – US ute buyers don’t like diesel.

“I think I know where I want to go with it (ute powertrain) and I believe there’s a lot of other countries that want to go in the same direction. So I'm pretty confident that it will not be a diesel,” Romano said.

He also reaffirmed the favoured development path was to use the same ladder frame chassis as the Kia Tasman, topped off with Hyundai’s own tuning and design.

Option two is a joint-development program with General Motors.

The Tasman has launched in Australia powered exclusively by a 2.2-litre turbo-diesel engine but is eventually expected to add a new 2.5-litre petrol-electric hybrid powertrain, and there’s a decent chance this will be the debut powertrain of the Hyundai ute, just as it was for the new-generation Palisade SUV.

“That is an option, yes, an option,” Romano confirmed. “You know it could be a hybrid. It could be a plug-in hybrid. It could be a BEV. All the options are on the table.

“So we're just … collaborating with the other countries that also need a ute, so that we can find sort of the place at which they overlap and that we can get the best economies of scale.”

Romano added that the tariff-driven delay in signing off the Hyundai ute related to a lack of an agreement between South Korea and the US.

“That’s going to have ripple effects across the globe for us if that is not resolved,” he said.

“There are a lot of issues in play right now with our company that have to be resolved before I can say definitively, we will have this resolved in X number of months or years.”

In the days after Romano spoke to the media, the US announced a 15 per cent tariff on South Korean imports, down from a previously threatened 25 per cent rate.

The deal also requires South Korea to accept automotive imports from the USA without any tariffs imposed.

The silver lining is a delayed decision on the Hyundai ute program won’t necessarily impact the arrival timing late in the decade.

“There is wriggle room,” Romano said.

* Lead image generated by AI

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