Toyota to lobby Canberra for softer ute emissions targets

Toyota Australia has warned it “cannot rule out price increases” on its workhorse utes and 4x4s once the New Vehicle Efficiency Standard (NVES) targets for light commercial vehicles tighten from 2027.

Speaking at the brand’s quarterly business update, Toyota Australia Vice President of Sales, Marketing and Franchise Operations John Pappas said Toyota would use the upcoming NVES review to push the federal government for a softer, “more pragmatic” ute target.

When NVES kicks up a gear in 2027 and CO2 emissions regulations tighten, it could make business very challenging for many car brands.

Toyota isn’t anti-NVES, Pappas insisted, but the light commercial targets are where the wheels start to wobble.

“First and foremost, we are and have always been very supportive of a new vehicle efficiency standard. And we’ve been de-carbonising for over 20 years with hybrid technology,” he said.

“The big challenge comes from 2027 when it comes to light commercial vehicles.”

The problem is who buys Toyota’s utes.

Across the combined HiLux and LandCruiser family, nearly 54 per cent are purchased by customers outside the major metropolitan cities, and Pappas says diesel remains the only practical option for many of them.

“When you talk about rural and regional Australia, it’s not exactly like that. For all the reasons we all sort of know around charging infrastructure, long distances and all these things, they’re all real challenges,” he said.

“Diesel powertrains and these types of powertrains are the right tool of trade for regional and rural Australia,” he stated.

The sales charts back him up.

September 2026 VFACTS data shows diesel still accounts for 155,040 of the 184,328 light commercials sold year-to-date, or 84%. Electric light commercials found just 1630 buyers.

That’s a big ship to turn, even as the segment shrinks.

The 4x4 ute market is down 13.6% year-to-date to 140,410 sales, with the HiLux 4x4 off 6.2% to 32,238, trailing the Ford Ranger 4x4 on 35,744.

Asked whether Toyota would buy credits from competitors rather than pass costs on, Pappas didn’t say no.

“We want to be self-managed as much as possible,” he augured.

Currently the HiLux 4x4 range starts at $45,990 plus on-road costs (ORCs) for the Workmate single cab-chassis and runs to $71,990 plus ORCs for the Rogue and Rugged X.

The electric HiLux costs $74,990 to $82,990 plus ORCs – and that’s the kind of gap that NVES penalties could start to close from the other direction.

Toyota will make its case through consultation on the NVES review, and Pappas was clear about the ask.

“We fully support having an ambitious, albeit equitable and pragmatic NVES. And when you look at the LCV segment, you can see that you’re going to be leaving customers behind because they need those vehicles,” he said.

“We’ll be consulting government to be able to really look at a more pragmatic, realistic light commercial vehicle target under NVES that is more equitable to the Australian market.”

Whether Canberra gives any ground is another matter.

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