The Ford Ranger and its arch-rival the Toyota HiLux are the two most popular new vehicles sold in Australia and the ute segment is worth around 20 per cent of all sales.
And while the traditional ute image is of a white single cab with a council sticker on the door, high-end 4x4 dual cabs priced above $60,000 is where the serious sales action is.
There’s also sizable demand for full-size US pick-ups such as the legendary Ford F-150 that are priced above $100,000.
This is lucrative territory for car companies because utes are relatively simple to build and therefore have lots of profit margin.
Recent arrivals such as the latest Mitsubishi Triton and next year’s Kia Tasman stick true to the traditional technical package of grunty diesel engine, sturdy ladder frame, generous 3500kg braked towing and plenty of payload.
But there are the first signs on the horizon that things are changing.
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The New Vehicle Efficiency Standard
The most obvious is the New Vehicle Efficiency Standard (NVES) designed to incentivise vehicle manufacturers to offer model ranges that produce lower overall emissions. This means higher emitting vehicles are likely to become more expensive.
The requirement for manufacturers to offset the emissions of their higher emitting models with low or zero tailpipe emissions vehicles has made it hard for car makers that only have large, non-electrified vehicles in their ranges.
One example is Isuzu, which only sells the D-Max ute and MU-X large wagon. One alternative is the pay the financial penalties, which raises the possibility of higher prices and/or making the brand less viable. Another option, of course, is to add some electrified models to their range.
Thankfully, Isuzu has responded by revealing plans to launch an electric ute here as soon as 2025.
Industry leader Toyota has also announced the end of production of the venerable V8 diesel LandCruiser 70 Series. It has refused to blame the NVES specifically, alluding more hazily to “community sentiments”.
“We believe that the community expects that we will reduce our CO2 footprint,” Toyota Australia’s marketing and sales chief Sean Hanley said. “We need to be able to show definite steps and definite product countermeasures to do that.”
The next thing to consider are the tax write-offs that incentivise the purchase of utes.
Changes to tax incentives
The next thing to consider are the tax write-offs that incentivise the purchase of utes.
They have artificially driven up sales. If those incentives were to be reduced or axed that would impact demand immediately.
Significantly, the federal government has recently tightened instant asset depreciation from $150,000 to a maximum $20,000.
It also introduced fringe benefits tax incentives for electric and plug-in hybrid vehicle purchases that help bridge the gap for orthodox vehicles purchasing costs. Though if you’re considering taking advantage of this, keep in mind the FBT exemption for plug-in hybrids expires from 1 April 2025.
Then there’s the influx of Chinese brands. They have already had a major impact across the mainstream Aussie car market. That impact is set to increase with more brands coming to Australia.
The arrival of Chinese-made utes
The LDV and GWM brands have tested the local ute waters with diesel models that are lower-priced and better-equipped but lacking in refinement compared to the best of the established players.
LDV also currently sells Australia’s only electric dual-cab ute, the eT60. It’s two-wheel drive, ridiculously expensive at about $100,000 and, to be frank, not much good.
But there are many more utes coming from China, some of which will be electrified.
“There certainly will be change in the ute market,” says Ross Booth, the global chief of vehicle valuation and forecasting experts Red Book. “We believe with government intervention, that then impacts the market.”
In the short term over the next few years Booth expects a rise in price for used diesel utes that drop out of new car showrooms.
“In Western Australia there is a lot of cashed up people who want to buy a ute. What’s an extra $10,000?” asks Booth.
Stage two, predicts Booth, will be a shift to petrol-electric plug-in hybrids that offer appealing range and capability. “Plug-in hybrids will be the stepping stone to EVs for utes,” he says.
Stage three will be the shift to electric utes once they can deliver true diesel-like capability and pricing is competitive. But Booth forecasts that won’t happen until the early 2030s. He says that if an electric ute does what people want it to do - such as offering diesel-comparable driving range with good payload and towing capacities – then the market will change.
So the message is clear. Significant change is coming to the Australian ute market. To help you ponder what you might soon be shopping for, we’ve plucked out some incoming models that we think capture the evolving market.
Kia Tasman
While there are utes headed our way that have electrified powertrains, the Kia Tasman is expected to be completely orthodox. Rather than break new ground, the Korean giant is determined to launch a vehicle that can compete with established players in the segment when it launches in 2025.
Local Kia management has even declared a goal of selling 25,000 Tasmans in a full year – that would account for about 40 per cent of all production planned to come out of Korea annually.
The essentials of the Tasman dual-cab formula read familiar. It will come with a ladder frame, a four-2.2-litre cylinder diesel engine, a traditional leaf spring rear suspension, 4x2 and high and low range 4x4 for off-roading and single-cab, dual-cab, cab chassis and pick up bodies.
The Ford Ranger-rivalling 3500kg braked towing, full one-tonne payload capacity and a five star ANCAP safety rating have been described as “non-negotiables.”
The challenge will be how well Kia can mesh all these elements together into a viable and competitive vehicle. While it’s never built a ute like this before, its product development has continuously improved through recent decades.
Kia Australia has a strong reputation for tuning vehicles to suit local tastes and conditions, and the Tasman has been extensively tested here, so here’s hoping.
There are some positives and negatives emerging as spy photos of the Tasman are published. Firstly, the interior looks like it could set a new standard for ute technology and quality.
But if the pictures are accurate, the exterior styling may be more controversial. Time will tell.
After launching the orthodox Tasman in 2025, Kia is expected to join the new wave with an electric ute as soon as 2026, but little is known about that at this point.
Toyota Tundra
When Toyota Australia couldn’t convince its global bosses to build a right-hand drive version of the full-size Tundra ute, it took matters into its own hands.
Now, a locally converted (the industry calls it ‘remanufactured’) right-hand drive version of the Tundra is in the final throes of development. However, it’s not yet confirmed when it will go on sale.
Toyota Australia is going down the same path to local sales as the Tundra’s rivals in the US market where these full-size utes flourish – the Chevrolet Silverado, Ford F-150 and RAM 1500.
It’s even chosen the same engineering house, Walkinshaw Automotive Group, to partner with for engineering and remanufacturing as RAM and Chevrolet.
Toyota is getting involved in the full-size pick-up market because a sizable number of cashed up Aussies love them and seem happy to spend huge amounts of money to get into them.
None of these vehicles is less than $100,000 and the Tundra is tipped to retail for $125,000. With the NVES coming, they certainly won’t get any cheaper either.
The appeal of these big trucks is in their massive towing capacity that can reach 4500kg braked, acres of interior space and high levels of equipment.
But they are specialised. On average they are around six metres long and more than 2.0- meters wide, which makes them too big for many car park spaces and difficult to manoeuvre in narrow streets.
All that has triggered a real backlash against them in some sections of the Australian community.
And despite their size, they don’t offer as much payload as the smaller one-tonne utes like the Ranger.
Then there is the massive amount of fuel often consumed by these big beasts. They are all powered by V8 or turbocharged six-cylinder petrol engines. Yep, no diesels here.
The Tundra is slightly different in being a fuel-saving hybrid. That’s something local Toyota execs are trying to lean into to counter criticisms of its anti-social size.
BYD Shark plug-in hybrid
As the first plug-in hybrid ute to be sold in Australia, it’ll be interesting to see how the BYD Shark fares against the traditional ute favourites.
After a long lead-up to the Shark arriving in Australia, it’s expected to finally arrive in late 2024 or early 2025.
BYD is one of China’s biggest car companies and one of the globe’s most successful makers of battery electric and plug-in petrol-electric vehicles.
The Shark is scheduled to be the first plug-in hybrid ute to go on sale in Australia either late 2024 or early 2025, beating the Ford Ranger PHEV onto the market by a matter of months.
The PHEV promises cleaner, greener motoring for the ute segment, a 100km claimed EV range and 850km combined range courtesy of its battery-assisted four-cylinder petrol powertrain and even Vehicle to Load (V2L) accessory and emergency charging capability that will be an obvious boon for tradies and campers.
As a PHEV, the Shark will also qualify for a Fringe Benefit Tax exemption until April 1, 2025, if it’s priced under the luxury car tax threshold.
In fact, pricing is one of the question marks over the Shark. In Mexico, where it’s already on sale, it’s priced around $80,000. That’s in LCT territory and right at the top of the market.
In Mexican spec, the Shark has only a 2500kg braked towing capacity and an 835kg payload. The latter number is not great, but the former is a disaster if BYD wants to tap into the local grey nomad caravanning market.
But BYD have promised the pricing will start lower than that. They also expect local testing to help improve the towing and payload as well as making sure the Shark can cope with local conditions.
They can then turn their attention to the battery electric Shark, which is also promised for Australia within the next couple of years.
Riddara RD6
Geely is one of China’s most prominent automotive groups and Riddara (it’s Radar in China, but trademark conflicts block that overseas) is one of its profusion of brands.
When we say profusion, we mean it: Volvo, Polestar, Lotus, Smart, Proton, Lynk&Co, Zeekr, Galaxy… the list goes on and on and on.
The Riddara RD6 is listed because its electric, is expected to be affordable and it could be here before the end of 2024. And it will have a lot of mates from China headed our way in coming years.
Given the incentives available to EVs via FBT exemptions and the way the NVES is designed to encourage their uptake, the Riddara RD6 could find homes among business and private buyers who appreciate the financial benefits of zero emissions and don’t need to go off-road.
Having said that, the specifications aren’t that stunning for a ute the size of a HiLux – 815-865kg payload, a 3000kg braked towing capacity and battery choices that will provide a claimed range up to about 500km.
Deviating the Riddara further from ute norms is that it’s actually car-based rather than sitting on a ladder frame. It is offered as both 4x2 and 4x4 in China, but so far only 4x2 overseas. That would probably need to be addressed for it to become popular here.
Hyundai Ioniq T7 and T10
While some rivals such as the Kia Tasman double down on orthodoxy, Hyundai is giving diesel utes a miss and developing two battery electric utes.
We know that because the Ioniq T7 and Ioniq T10 names have been trademarked in Australia.
To translate that: Ioniq is Hyundai’s battery electric sub-brand, T stands for truck and the numerals denote the size of the vehicle (the bigger the number the bigger the vehicle).
As we understand it – and information is limited – the T7 will be more of a runabout in the vein of the old Subaru Brumby and Proton Jumbuck (remember them?), while the T10 will be the real working ute deal, complete with ladder frame and broader off-roading capabilities.
That should mean 3500kg braked towing, a one tonne payload and a substantial range well beyond the 300-400km most EVs manage.
The over-riding challenge will be to deliver that at a competitive price against orthodox utes. And one thing that’s become apparent over recent times is battery electric vehicles aren’t at that point yet.
But if it achieves its targets - and Hyundai has the engineering nous to do it – this could be the breakthrough vehicle that turns electric utes mainstream.
