Cheaper petrol-powered cars are disappearing from Australian showrooms as automakers scramble to adapt to the Albanese Government’s controversial emission standards, with Kia becoming one of the latest brands to confirm a major model will go to a premium hybrid-only model.
The Korean auto giant, like many other rivals, has been balancing demand for high-emissions vehicles with a growing bank of low-emissions hybrid and electric models.
Speaking to Australian media in Seoul, Korea, Kia Senior Vice President of Product Spencer Cho confirmed the company has specifically considered the government’s New Vehicle Efficiency Standard (NVES) when deciding how the Kia Seltos range should look in Australia.
It’s a change that could push the popular model from its current starting point of $33,990 to about $40,000 drive-away.
It follows Kia’s decision to ditch petrol versions of the Carnival and Sorento, pushing customers toward hybrid versions that cost an extra $5000.
“The upcoming NVES, our subsidiary there carefully considered which powertrain might be the right direction. From that perspective, Kia Australia has decided to come with hybrid-only choices,” Mr Cho said.
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“I believe they have a wide range of models lines. They have [Internal Combustion Engine] ICEs, they also have EVs, and this is another model line for them. So, from a complexity standpoint, this is a very consideration choice and decision.”
Under NVES, brands must reduce the average emission out put across the vehicles they sell or risk accumulating penalties.
The policy creates a credit system, where low-emission and electric vehicles help offset higher-polluting models such as diesel utes and large SUVs.
Few vehicles are more important to Kia Australia right now than the Tasman.
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The new dual-cab ute, powered by a 2.2-litre turbo-diesel engine producing 154kW and 450Nm, is expected to dramatically increase Kia’s fleet sales and become one of the brand’s biggest growth drivers.
Kia Australia reportedly promised its headquarter to sell 20,000 Tasmans annually as it attempts to take on the Ford Ranger and Toyota HiLux.
But the Tasman has proved less popular than expected, returning an average of 415 sales per month this year – which would be about 5000 over 12 months.
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And the ute currently lacks a hybrid or electric option, making it a headache for Kia under the NVES scheme.
By the end of 2025, Kia Australia generated more than 730,000 credits and accrued zero liabilities after aggressively growing sales of hybrids and electric vehicles including the EV5 and Sportage hybrid.
Without those credits, automakers can face fines that can reach $100 per gram over the emissions limit per vehicle.
The Seltos, one of Kia’s most important global models with nearly 300,000 sold worldwide in 2025, has now become part of that balancing act.
The company also acknowledged the global EV transition has becoming increasingly unpredictable, with slowing EV demand in some market pushing brands to lean harder into hybrids.
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“No one can expect this kind of world will happen,” Mr Cho said, referencing global instability.
“But what we are doing is carefully monitoring the market demand and market changes.”
Despite the shift away from petrol-only variants in Australia, Mr Cho said the company was not abandoning combustion technology.
“One of Kia’s strengths is we have all the technologies: diesel, gasoline, hybrid, plug-in and EVs,” Mr Cho said.
“In a certain market where hybrid is rising, we can provide hybrid models; if EV is coming, we can provide EVs.”
According to April 2026 industry data, hybrid sales in Australia jumped 27.1 per cent year-on-year, while plug-in hybrid sales exploded by 270.2 per cent.
Recently, in the United States, hybrid sales surged 37 per cent in just two months, outpacing EV growth as fuel prices climbed.
Industry insiders say hybrids are attractive because they deliver fuel savings without requiring buyers to change their lives.
Hybrids are also an affordable option.
“The overarching theme right now in the auto industry, not only for your market [Australia], but the rest of the world, is affordability, that is the key thing,” Mr Cho said.
“Pricing is the key thing.”
