Toyota says it has no plans to stop developing diesel engines even as emissions regulations tighten around the world and is not ruling out introducing diesel hybrids.
Speech at a conference in connection with the Japanese mobility fair (JMS) said last week in Tokyo, the company’s powertrain chief Takashi Uehara said there was no timetable for the end of diesel-powered Toyotas.
“As far as diesel engines are concerned, we have no deadline – we are continuing our development and have no deadline to finish production or development,” Uehara-san told Australian media.
“We are still seeing high inquiries and expectations from our customers in Australia, Europe and the Middle East – there is continued demand in these markets.”
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Diesel vehicles accounted for 48.4 per cent of Toyota Australia’s sales between January and August 2025 – up from 2024 (42.6 per cent) but down from the previous year, when the figure was a dominant 52.6 per cent.
However, Toyota reiterated its commitment to “decarbonization” at JMS, particularly through its signature gasoline-electric hybrid vehicles. Although the company would not confirm that it is developing a diesel-electric hybrid powertrain, it did not rule out electrifying diesel engines.
While the company’s range of hybrid models is dominated by petrol engines, the HiLux and Prado “V-Active” 48V mid-hybrid models launched in Australia in 2024 were the first electrified diesel vehicles to hit local showrooms, although Toyota does not describe them as hybrids.
“There is great potential for internal combustion engines (ICE) – the fuel mix that takes different types into account to a great extent,” Uehara-san said.
“Some regions want battery electric vehicles and (also) have internal combustion engines – we don’t have a specific deadline or a specific year; I think that kind of demand will always be there.”
“The same goes for gasoline and diesel fuels, and as we look to expand options and availability, we need to look at the different engine availabilities, not just the engine alone.”
Regarding diesel engines specifically, Uehara-san said: “We do not have a specific deadline by which we will complete development or production, but emission regulations will become stricter in the future.”
This includes Australia’s New Vehicle Efficiency Standard (NVES), which introduced penalties for car manufacturers that exceed set CO2 emissions limits.
Launched this year, NVES has already resulted in rear-wheel drive versions of the Ford Everest and Isuzu MU-X SUVs being removed from Australian showrooms.
The commitment comes after Sean Hanley, Toyota Australia’s vice president of sales, marketing and franchise, suggested in announcing the LandCruiser Hybrid, which uses a petrol-electric V6 hybrid powertrain from the Tundra pickup, that the diesel powertrain will need to run for about a decade before hydrogen takes over.
Toyota is committed to a “multi-pathway approach.” The company uses this term to describe its strategy of offering different drive types – petrol, diesel, hybrid, electric (EV) and fuel cell electric drive (FCEV) – across its entire model range.
Toyota, the world’s largest automaker, has been criticized for being slow to adopt electric vehicles and for not committing, like many of its competitors, to switching exclusively to electric vehicles within a specific period of time. However, many industry experts now believe this approach is prudent as other automakers are scaling back their commitments to pure electric vehicles and incurring significant financial losses due to excess electric vehicle production capacity and/or unplanned development of internal combustion engine vehicles.
“The cost of entry will be higher and that could undermine the popularity of diesel in the future – that is a possibility,” Uehara-san added.
“We will advance our electrification and also CO2 reduction, but maintain – and maintain – the high torque of the diesel engine as we continue our research and development.”
If Toyota introduces diesel hybrid technology, it won’t be the first automaker to do so. And while several European brands have previously offered diesel-electric powertrains, Chery Australia’s first ute is expected to be powered by a diesel-electric plug-in hybrid system, which would make it the first vehicle of its kind Down Under.
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