The German automaker’s global sales chief Audi says Australia presents an excellent opportunity for the brand’s electrification plans, with a focus on hybrid models that could ultimately replace diesel models here.
Audi sales boss and board member Marco Schubert said last weekend at the 2026 Formula 1 Australian Grand Prix, where the company unveiled the new Audi RS5 plug-in hybrid, that hybrids will be the brand’s focus Down Under.
“We believe particularly, as in Europe and also in other markets such as here in Australia, that electrification is the right path,” said Schubert.
“The RS5 is a good implementation of the hybrid, although Australia also has a great interest in Audi Sport products.”
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The new RS5 is powered by a 470kW/825Nm plug-in hybrid powertrain (PHEV) with a 2.9-litre V6 petrol engine paired with an electric motor integrated into an eight-speed gearbox and quattro all-wheel drive.
“This also helps us with the CO2 content, so of course it not only affects the performance measurement, but also the CO2 content. For a market like Australia, which is also moving towards zero-emission vehicles, this is really super important for us,” said Mr Schubert.
Audi originally aimed to sell only electric vehicles (EVs) from 2033 (except in China), but announced last year that it had scaled back EV targets – like Mercedes-Benz, Volvo and a number of brands including Porsche, another member of the Volkswagen Group, and the Volkswagen brand.
Some car manufacturers, such as Hyundai, have used hybrid powertrains to replace diesel engines in their product range.
“That is of course something we strive for when it comes to compliance with the laws in certain countries,” said Schubert Daily Sparkz.
“We really need to watch and monitor very closely what the demand is from a customer perspective, but also what the legislation will derive from it.
“We continue to have diesel in our product portfolio – we offer it depending on market size and will continue to offer it for the new Q7.”
In addition to the Q7, Audi continues to offer diesel versions of the Q5 and Q8 SUVs in Australia. However, no diesel versions of the latest A5 will be offered, as is the case in Europe, while other oil burners such as the A6 and A8 have been phased out locally.
The increasing popularity of hybrid models, particularly in the United States, one of Audi’s largest markets, led the brand to abandon its goal of offering only electric vehicles in most markets by 2033.
Hybrid sales have also exploded in Australia over the last two years, with more hybrids being sold here than electric or PHEVs – although these other two powertrains continue to grow in popularity.
Australia’s second best-selling vehicle in 2024 and 2025 was the Toyota RAV4 Hybrid, although the predominantly diesel-powered Ford Ranger was the most popular vehicle overall.
Audi Australia introduced its first PHEV, the A3 e-tron hatchback, back in 2015. The current range offers PHEV powertrains for the A5 – including the new RS5 – as well as the Q5 and Q8 SUVs, with a Q3 PHEV offering an opportunity for local showrooms.
Overseas, Audi also offers PHEV versions of the A3, A6 and Q7, and is also preparing the Q9 three-row large SUV – not yet officially confirmed for Australia – with a PHEV powertrain option.
Current battery-electric Audis on sale in Australia include the Q4 e-tron, Q6 e-tron and e-tron GT sports cars, with the previous Q8 e-tron now out of production.
“I think due to the fact that we have a large product range – so a lot of electric vehicles as well – and also focus on the hybrids, because I’ve learned that hybrids work well for you here from a tax perspective, we see a good opportunity for us to develop the electric market,” Schubert said.
The Volkswagen brand is also expanding its PHEV range here: In addition to the Touareg R PHEV, PHEV versions of the new SUV generation Tiguan and Tayron are also in the showrooms this year.
Production of the Touareg, which shares its platform with the Audi Q7/Q8 and other Volkswagen Group SUVs, will end this year, with Australian order books scheduled to close this month.
The push toward hybrid vehicles has been exacerbated in 2026 by regulatory changes, such as the Trump administration’s recent easing of emissions rules in the United States.
Europe is also in the process of reducing its previous mandate that all new cars be 100 percent emission-free by 2035 to 90 percent so that internal combustion engines (ICE) can continue to exist in hybrid models.
As Audi scaled back its electric vehicle ambitions, it said it had planned to offer internal combustion engines into the 2030s, but had not set a date for when that would end.
However, emissions regulations have become stricter in Australia with the introduction of the New Vehicle Efficiency Standard (NVES) last year, which has seen various brands launch new electrified options to meet CO2 targets.
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