Isuzu Australia weighs in on incoming emissions standards as some of the most popular diesel utes feel the crunch: 'Vehicle brands that cannot increase vehicle pricing to cover the penalties may be left with no option but to exit the Australian market'

Isuzu Ute Australia has weighed in on the incoming emissions standards proposed by the federal government, urging policymakers to "protect the interests of all Australians living in metro, regional and rural areas".

The brand, which only fields two large-displacement diesel passenger vehicles in Australia, says the current NVES (New Vehicle Emissions Standard) proposal "doesn't take into consideration automotive technology development cycles", saying instead "the comparative US standards set their targets based on a forecast in alignment with emission technology developments".

It says the government should consider giving manufacturers more time to lower the emissions of their vehicles, as well as classify large vehicles and 4x4s separately from smaller passenger cars, as "[4x4s and SUVs] are built on commercial principles to be fit for purpose, be it carrying loads, towing a trailer, or getting off-road".

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Isuzu Ute also says the penalties proposed by the government for not meeting emissions targets are "excessive" and that many vehicle brands may be forced to increase vehicle pricing to cover penalties incurred.

"Vehicle brands that cannot increase vehicle pricing to cover the penalties may be left with no option but to exit the Australian market," it said in a statement.

Isuzu Ute's comments are perhaps the most drastic response from a manufacturer so far. A select few manufacturers – including Australia's biggest seller of cars, Toyota – say the NEVS scheme will spell big changes for the Australian market, including the end for diesel dominance.

Meanwhile, the industry peak body, the Federal Chamber of Automotive Industries has also weighed in calling the NVES proposal "disappointing, saying the targets proposed under the leading 'Option B' model are "extremely aggressive".

Both vehicles are well within Isuzu’s rather long product cycles, with the current-generation D-Max having been released in 2019.

But not all automakers are against the standard, with both Hyundai Group and Volkswagen Group speaking out in favour of the introduction of emissions standards. VW in particular has been calling out for both an emissions standard and improved fuel quality standards as it has become increasingly difficult for the group to source vehicles for Australia in recent years.

The statement by the FCAI has triggered a rebellion in its ranks, with EV-only automakers Tesla and Polestar announcing that they will pull out of the FCAI as a result of its response to the NVES.

Meanwhile, out-of-industry bodies, like the Climate Council have thrown their support behind the proposal, saying it will lead to "cleaner, cheaper vehicles." The Climate Council predicts that more efficient vehicles will save buyers an estimate $5710 in fuel over five years, or $17,000 over a vehicles average lifetime. It argues that while some vehicles will become more expensive, it won't be by a significant amount and that buyers will ultimately be better off in the long run.

The leading 'Option B' model of the NVES requires automakers to reduce their emissions for passenger vehicles by 61 per cent by 2029 (to just 58g/km), with penalty-free emissions vehicles capped at 141g/km (essentially Euro6 standards) starting on the first of Janurary 2025.

Isuzu's D-Max ute using the most popular 3.0-litre four-cylinder turbo diesel option in automatic form consumes 207g/km (compliant with much older Euro 5 emissions standards), while its only other vehicle, the MU-X large SUV produces even more emissions at 220g/km.

A 48-volt D-Max variant is also in the works, although it is unclear to what degree a mild-hybrid system will help the brand's fortunes.

Both vehicles are well within Isuzu's rather long product cycles, with the current-generation D-Max having been released in 2019. The previous two generations of the D-Max lasted ten years before being replaced.

However, there is some light at the end of the tunnel for Isuzu should the Option B proposal be adopted, with Nikkei Asia reporting mid last year that an electric vehicle "based on the D-Max" is slated for launch as early as 2025 to appeal to European markets. A recent investor report to the Japanese market had Isuzu investing the equivalent of AU$5.82 billion in "R&D in new areas different from diesel engined vehicles".

A 48-volt D-Max variant is also in the works, although it is unclear to what degree a mild-hybrid system will help the brand's fortunes.

The brand also has a partnership with Honda on developing next-generation hydrogen fuel cell stacks for use in commercial applications.