NVES triggers Kia range revamp
BY NEIL DOWLING | 24th Jan 2025
KIA Australia has embarked on changes to its model mix – and perhaps the end of some variants – as the full weight of the New Vehicle Efficiency Standard (NVES) starts to hit from July.
NVES became mandatory from the beginning of January but will not be enforced until July 1 this year and is designed to encourage car-makers to reduce the number of big CO2 emitters sold in favour of more fuel-efficient alternatives.
It is already changing the product mix of all vehicles sold.
Car-makers can offset the CO2 units of some models against those of low-emitting models, such as Toyota’s popular hybrids offsetting the brand’s large diesel off-roaders and utes.
The NVES CO2 threshold, and the penalties for exceeding it, will be increased each year from 2025.
For Kia, the introduction of NVES means a rejig of the model mix and the potential for changes to the vehicles available.
Speaking at the launch of the K4 model that replaces the Cerato in Melbourne recently, Kia Australia CEO Damien Meredith said he was confident that meeting NVES would not impact on customer choice or model performance.
“Meeting the requirements of NVES will mean that the BEV, hybrid and plug-in hybrid models in our range will have to represent 25 per cent of our total product range,” he said.
“Our percentage now is 12 per cent, so we have started to change the model mix.”
Kia Australia markets 12 models, five being pure battery electric vehicles (BEVs) and three models that have hybrid variants. It will soon add the all-electric EV3 small SUV and the diesel-engined Tasman ute.
In the bigger-engined models, which may have the highest CO2 emissions, Kia’s Carnival people mover and Sorento large SUV are both available with a 3.5-litre V6 petrol or 2.2-litre turbo-diesel while only the highest-priced variants of both can be optioned with a 1.6-litre petrol hybrid that carries a hefty price premium.
The Tasman ute, when it arrives in July, will be sold exclusively with a 2.2-litre diesel.
Mr Meredith said that although Kia Australia has requested more low-emission models from the parent company – and noting that the parent is actively assisting Australia to achieve this – global demand is stifling supply.
One example is the Seltos small SUV that has unexpected demand from Europe and the US which is curtailing supply in Australia.
Asked why the K4, launched this month in Australia, was not available with a hybrid option as in Europe, he said it was purely about availability.
The K4, made exclusively in Mexico for world markets, is optional as a hybrid for some European markets.
Clarifying the response, Kia Australia chief operating officer Dennis Piccoli said the hybrid K4 was being looked at for an addition to the Australian line-up.
“It’s in Europe so we see that it could come to Australia,” he said.
Mr Meredith is confident about meeting customer demand for its models saying, “we believe that with what's available and what's occurring, we'll be able to get there with the mix”.
“We know it'll be a challenge, but at least we know what the pathway is, and we've got to fulfil our responsibility to the NVES rules,” he added.
He said Kia has some options, including reducing the volume of large petrol-fuelled models, such as the Sorento.
“There’s lots of options. We can reduce our volume dramatically, but we don’t want to do that,” he explained.
“We believe we can still build a volume, build a market share, continually making the brand stronger by selling the right mix of cars. That’s what we believe we can do.”
Mr Meredith agreed that the Australian market was “highly competitive” but was adamant there was room to grow Kia’s market share.
“We have been able to grow in the last decade from 28,000 units a year to 81,000 in 2024 and an expected 90,000 units this year,” he said.
“We’ve got a good pricing strategy, and we’ve got a great dealer network. I think people undersell the importance of a great dealer network when it comes to distribution.
“So, we're very, very confident that we can do it, but it’ll be challenging and competitive.”
