Hyundai can ‘see merit’ in proposed NVES

UPDATED: 20/02/2024

HYUNDAI Motor Company Australia (HMCA) is in the process of expanding its hybrid powertrain offering and bolstering its range with new battery electric vehicles, with further changes to the brand's local line-up flagged if the federal government’s New Vehicle Efficiency Standard (NVES) is adopted as proposed.

The proposed annual tightening of fuel-efficiency requirements are set to shape Hyundai’s range of models, as well as the mix of powertrains offered across different product lines, as the HMCA chief operating officer John Kett considers the brand’s position as a top-five brand in this market.

A release from the brand following the launch of the new Hyundai i30 hybrid sedan stated that the company “welcomes the federal government’s Impact Analysis for the New Vehicle Efficiency Standard (NVES)”, and that it is “committed to working with government and industry to ensure Australian consumers get access to the widest range of affordable low- and zero-emission vehicles”.

HMCA’s position contrasts with much-publicised negativity toward the proposed NVES from the Federal Chamber of Automotive Industries (FCAI) and Australian Automotive Dealers Association (AADA), as well as Mitsubishi Motors Australia Limited (MMAL).

However, Volkswagen Group Australia (VGA) has joined HMCA in issuing a statement broadly supporting the federal government's proposal.

Mr Kett said the new era of transport and mobility for Australia is “an intriguing challenge” and that the brand looks forward to responding to the federal government’s call for feedback from automotive OEMs.

“We think we will soon have a world-class efficiency standard in Australia and we’re excited by that,” Mr Kett was quoted as saying in the release.

“With the standard in place, Hyundai dealers will still have great vehicles to sell, customers will have great vehicles to drive, and we will be doing our bit to reduce emissions in line with Australia’s commitment to decarbonise.”

The Australian government’s NVES proposal includes three options. Option A is described as “slow start” that “causes the least disruption of all the options, with the lowest benefits and also the lowest costs” to businesses and consumers.

Option B, the “fast but flexible” take on things, is said to provide a “strong, ambitious and achievable policy”, to “avoid extremely high costs, with an opportunity for suppliers to invest to support the transition, and delivers considerable abatement and fuel cost savings to Australians”. 

Option C, “fast start” is the most ambitious and seemingly disregarded by Mr Kett, despite offering a “high net benefit and greater abatement, but also higher technology costs”.

In the NVES proposal, the Albanese government admits that “adopting an aggressive emissions reduction trajectory and more stringent targets than the US, this option risks unavailability of technology and undesirable consumer outcomes”.

“We only have five years to catch up to other advanced markets which have had efficiency standards in place for decades, and that’s a challenge,” said Mr Kett, who added that HMCA can “see merit in the government’s preferred Option B”.

“With some minor aspects of Option A introduced to it, we can hit the proposed target and bring accessible, affordable and efficient vehicles to the market.”

It is a similar take to VGA, which said it “would suggest the possibility of an NVES modelled on Option B with elements of Option A super credits for full battery electric vehicles and plug-in hybrid electric vehicles".

“This outcome should be of the most benefit to the Australian consumer,” concluded the VGA position statement.

Mr Kett said HMCA has a long history of offering models that reduce the brand’s fleet emissions, from the Ioniq EV, PHEV and hybrid range, to the Nexo hydrogen fuel-cell vehicle, not to mention the current crop of Ioniq (5, 6, and 7 coming this year), and the popular Kona Electric.

“When we think about our progress shaped by history, we’re constantly willing to invest in those emerging technologies – almost regardless of the short-term commercial gains we get,” said Mr Kett. “We feel really well positioned, and we feel like it really is our time to shine. 

“We want to be the beneficiary of the previous work we’ve put into a powertrain segment that’s largely been left to itself for such a long time,” Mr Kett said, calling out the Korean company’s focus on new-energy vehicles, and its future hybrid range additions in the updated Tucson with hybrid power available, and the new-generation Santa Fe seven-seater, which will launch as a hybrid-only model. 

“We certainly see the merit in terms of the options that the government has presented going forward,” said Mr Kett.

“We will have a long conversation with the government in our submission in terms of what that looks like. That’s all we can say at the moment. There’s a lot of noise. There’s a lot of challenges there. 

“But we feel like what we’ve embedded over the last 10 years has taught us so much in terms of the volume of which the EV portfolio can lead towards our north star,” said Mr Kett, before going on to suggest the brand’s aim is still for zero-emissions range of vehicles in Australia by 2040. 

HMCA general manager of corporate communications Bill Thomas said the nuts and bolts of implementing changes to the brand’s line-up are still being sorted, but was frank in his assessment of the current range and powertrains on offer.

“There’s no way we would be able to meet that reduction of 12 per cent per year without making changes to the portfolio,” said Mr Thomas.

“We just have to be smart about it. Without change, we just don’t get there. That’s what fuel efficiency standards do, is to make manufacturers change the way they bring products to market.

“We’re still very much focused on full EV, we want to make that our north star. We’ve offered EVs for quite some time now, and hybrid is a transition,” he said. “It also gives a way of extending for ICE vehicles at the lower end of the price segment, so we’ve got a mix of EV and hybrid that allows us to offset the ICE.”

The Hyundai range has expanded with the new i30 sedan hybrid range, which kicks off from $33,000 before on-road costs (or $35,990 drive-away nationally) for the base model version, which employs a petrol-electric powertrain capable of 3.8 litres per 100km and CO2 emissions of just 92g/km on the combined cycle.

There will be more feature-rich versions of the i30 sedan hybrid with Elite and Premium grades incoming, but pricing is still to be confirmed for those versions. They have been delayed for launch as Australia is the only market that takes them with a 17-inch alloy wheel and summer-tyre combination, which has been tested locally.

Hyundai has a big year ahead for its electric and electrified vehicle model lines, with the new Ioniq 5 N performance model due soon, as well as the Ioniq 7 large SUV later this year, while the hybrid line-up will expand to include a first-ever Tucson hybrid in the coming months, as well as the aforementioned new-gen Santa Fe which will be initially sold as a petrol-electric model only.