Hyundai says N cars caused its NVES fine, defiantly vows to keep selling them alongside EVs

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Hyundai racked up the fourth-largest inaugural New Vehicle Efficiency Standard (NVES) penalty in the vehicle CO2 law’s first year of operation, and the company has revealed how and why it happened.

A spokesperson for Hyundai Motor Company Australia (HMCA) told Chasing Cars that the “vast bulk” of the penalty was chalked up by the CO2 contribution of petrol-powered, high-performance Hyundai N cars.

NVES penalties are issued when the average CO2 emissions of all vehicles sold by a car manufacturer in a calendar year exceed a legislated government limit.

In 2025, the headline NVES limit was 141g/km for cars and SUVs. There are higher limits for utes and heavy-duty 4WDs, but Hyundai does not sell any vehicles in that class in Australia.

Petrol-powered N cars cop the blame; Hyundai promises to keep them

Nearly all of Hyundai’s N models emit considerably more than the 2025 limit.

The ‘dirtiest’ of the lot is the original, with the i30 N hatchback officially rated for 197g/km while the slightly slipperier i30 Sedan N sliding in at 194g/km. The pint-sized i20 N emits 157g/km.

The only exception is the fully electric Ioniq 5 N which, like all BEVs, emits 0g/km for NVES purposes. 

Still, HMCA chief operating officer Gavin Donaldson told Chasing Cars that the petrol-powered N cars aren’t going anywhere.

“N is fantastic for Hyundai, and we have a great N community, as we’ve seen from our N festivals and track events. N owners are our best brand ambassadors.

“We will always sell Ns in Australia,” said Donaldson.

Still, plans are afoot at HMCA to boost the proportion of sales of battery electric vehicles (BEVs) to offset the emissions of the N cars more precisely, in the hopes of avoiding future NVES penalties.

“We just need to do better with EV sales to help absorb the penalty we receive for ICE-powered N performance cars,” Donaldson said.

Other non-N Hyundai models are not pulling their weight

Left unsaid by HMCA sources was that there are other vehicles in the local Hyundai lineup that are not pulling their weight on the NVES front.

Entry-level powertrains used by Hyundai for the popular Kona small SUV and Tucson midsize SUV emit CO2 in excess of the NVES limits, at 184g/km and 149g/km apiece.

Then there’s the 2.5-litre turbo petrol version of the reigning Chasing Cars Car of the Year, the Hyundai Santa Fe, which is Hyundai’s thirstiest SUV — with CO2 emissions of 212g/km.

Those numbers breached the 2025 limits, and they are deep into the red for 2026, with NVES headline CO2 limits tightening considerably for cars and SUVs to 117g/km.

Shifting buyers into hybrids is a convenient solution for 2026

HMCA will soon need to decide what to do about high-CO2, non-N powertrains.

The brand already sells hybrid options for several of its models, with the partially electrified powertrains making a big difference: the Kona Hybrid and Tucson Hybrid emit 121g/km and 88g/km respectively.

Likewise, the hybrid version of our COTY winner slashes CO2 emissions to 128g/km — a 40 percent improvement.

Expect to see HMCA pull levers to shift demand further to the hybrids.

Elexio leads charge to build sales of fully electric Hyundais

Operations boss Donaldson’s acknowledgement of the need to sell more EVs kicked off earlier this week.

Priced from $59,990 driveaway, Hyundai’s new Chinese-built Elexio midsize SUV is a BEV the brand hopes will pinch some private and fleet business away from the Kia EV5 and Tesla Model Y.

Hyundai needs to make a good stab at making the Elexio a success as sales of the brand’s revolutionary Ioniq 5 BEV remain niche: just 626 were delivered last year.