Is this diesel doomsday? Popular utes and SUVs such as the Toyota HiLux and Isuzu MU-X stumble in Australia as workhorse fuel begins to phase out

Predictions of a diesel doomsday from auto giant Toyota seem to be ringing true, with 2025 already seeing a dramatic decline in diesel sales across all categories, including dual-cab utes and SUVs.

In its place, hybrids - both conventional and plug-in - are skyrocketing, largely in the SUV space.

But electrification will soon appear en masse in the ute segment – led by the BYD Shark 6 and followed by the Ford Ranger PHEV, and an expected plug-in version of Nissan's new Navara and the Mitsubishi Triton – heaping more pressure on the once-untouchable workhorse fuel.

Also complicating diesel sales in 2025 is the introduction of the New Vehicle Efficiency Standard (NVES), which slaps a (variable by vehicle weight) emissions target on vehicles sold in Australia. While the policy is unlikely to have had any impact on sales or demand so quickly, it does put pressure on carmakers to introduce newer engine types to meet the tightening restrictions.

But demand appears to be simply falling at the moment, with official figures from the Federal Chamber of Automotive Industries (FCAI) revealing diesel sales fell a total 12.3 per cent in January when compared to the same month in 2024 — or 3552 vehicles.

Some individual segments faired worse still, with passenger vehicles falling 23.9 per cent (albeit from a small base), SUVs dropping 14.6 per cent (from 9694 to 8279 sales) and utes falling 10.6 per cent (from 18,546 to 16,573).

To put those numbers into perspective, total petrol sales fell eight percent, while hybrid (+51.5 percent) and PHEV (+88.5 percent) sales soared market wide.

“Sales of hybrids and plug-in hybrid vehicles continued to grow and now make up nearly one in five of new sales representing 17.1 per cent and 2.2 per cent of sales respectively," says FCAI Chief Executive Tony Weber.

Enhancing the falls is a general dip in ute sales (a segment in which diesel is by far the most dominant fuel source), with over all sales in the light commercial segment falling by 10.5 per cent year on year.

No big names were immune, with the Ford Ranger dropping 10 per cent, the Toyota HiLux falling 19.3 per cent and Isuzu D-Max falling 17.9 per cent – though the three utes still hold spots two, three and six on the sales charts.

Of all the 4X4 utes sold in Australia, only the Nissan Navara (sales up 69.1 per cent) and the Mazda BT-50 (sales up 6.4 per cent) truly bucked the negative trend, with everyone else posting a loss in January.

2025 Toyota HiLux

All of which makes comments from Senior Toyota Australia executive, Sean Hanley, made to CarsGuide in March 2024, seem awfully prophetic.

"To be honest, I was talking about the end of diesel way back when before NVES was even a thought," Mr Hanley told us then.

"I think diesel will be around for a little bit, but we've got synthetic fuels coming, we've got hydrogen coming, we've got BEVs coming.

"You'd think out of all of (the fuel types), it's probably the one at the greatest risk. But we have diesel because it's relatively cheap and capable, and we have infrastructure and we have ICE engines that take it.

"But we're also now finding out that petrol-turbo four cylinder engines aren't bad either. So technology is moving on.

"Well we'll have to wait and see. I think diesel in the fullness of time will be a fuel that will be eliminated from the Australian market. But it's not immediate. It has still got some time to go."