If the timeless Ioniq 5 (2021) was an orbit-shifting moment for global Hyundai design, and the new-generation Santa Fe marked next-level elevation in product excellence for what was once a bargain-basement brand, then the gen-two Palisade is Hyundai shooting for the stars.
It acts as the perfect counterpoint to the Car-of-the-Year-winning Santa Fe – being a larger, more conservative, yet also more sophisticated seven- or eight-seat SUV for around 15 grand more than its smaller sibling – as well as a brilliantly judged stepping stone between the Santa Fe and the premium-priced Ioniq 9 electric large SUV.
With these three large SUVs, Hyundai has nailed its ‘chess pieces’ design ethos – creating a trio of uniquely styled, but intrinsically related vehicles spanning a $70,000 price bracket that are so well-engineered they deserve to succeed in capturing the attention of the buying public.
Because the previous Palisade Calligraphy flagship accounted for such a large proportion of sales (83 percent), this new-generation SUV launches in top-spec Calligraphy guise with a new-generation hybrid powertrain.
This efficiency-focused arrangement replaces the now-defunct 2.2-litre turbo-diesel with a 2.5-litre turbo-petrol four-cylinder engine combined with two electric motors for an impressive 6.8L/100km official combined fuel-consumption figure. This compares to 7.3L/100km for the outgoing diesel and 10.7L/100km for the old front-drive 3.8-litre V6 petrol.
Where the Palisade’s new hybrid powertrain really strides ahead is in terms of performance compared to the old diesel (power jumps from 147kW to 245kW, while torque rises by 20Nm to 460Nm). And that impression also applies to the Santa Fe Hybrid, which cedes 73kW/93Nm to the Palisade thanks to a smaller 1.6-litre turbo-petrol/single-electric motor specification.
The new Palisade Hybrid isn’t quite as silkily refined as it could be – when working hard, it’s clear there’s a four-cylinder petrol engine zinging away up front rather than a more suave V6 – and it seems slightly odd that there’s only six gear ratios instead of eight. Yet the way it behaves in general driving is effortlessly strong and pleasantly calming.
While the new Palisade has expanded in size – it rides on a 70mm-longer wheelbase and is 70mm-longer overall, distributed to the rear (to benefit luggage space) because the front overhang is shorter – it only weighs around 70kg more than an equivalent Santa Fe, meaning there’s significantly more accelerative grunt (and a modest 1.2L/100km penalty).
And while the Palisade’s platform is essentially a development of the Santa Fe’s underpinnings, enough has been changed to make it feel like a significantly different, more luxurious vehicle.
It features a full Australian suspension tune that includes frequency-selective front dampers, self-levelling rear dampers and a unique power-steering calibration.
The result is a large, luxurious SUV that is confidence-inspiring to place on tight, winding roads – delivering impressive precision and communication while retaining its smoothness and fluency.
Indeed, the way the Palisade instantly transitions its cornering load onto its outside rear tyre – a good-quality Pirelli Scorpion 265/45R21 – is so satisfying, it’s borderline fun! And its body control is totally on point, too, despite there being a degree of body roll. It makes this 2175kg SUV both surprisingly sporting to drive and a really enjoyable large unit to waft along in.
The ride quality feels impressively luxe 95 percent of the time – only occasionally do the 21-inch wheels thump home in large potholes – and the Palisade backs this up with tangible refinement, using its new acoustic laminated glass, tighter door seals, more extensive under-carpet sound-deadening, and sound-absorbing foam inside the tyres to great effect.
While the bargain-Range Rover styling, punchy hybrid powertrain and excellent dynamics lift the new Palisade considerably, it’s inside where these generational gains really hit home.
The dashboard and interior treatment match the Palisade’s refinement elsewhere – simple and sleek, yet beautifully constructed and individually designed. It’s clearly a Hyundai interior but it’s also clearly not a Santa Fe – as well as clearly more luxurious. Never has the Genesis influence shone through stronger.
The way Hyundai has disguised the curved dual 12.3-inch screens into the broad, flat-topped dash architecture gives the Palisade cabin an imposing sense of strength.
For another $295 over the standard all-black leather interior, you can have it in a dark charcoal (that has a dark-chocolate tinge, as well as brown stitching), a light grey (with constrasting navy-blue panels and inserts) or an uber-brown that is all-pervading in its depth of rich colour and texture.
The second row is configurable with either a three-seat bench or a pair of individual ‘captain’s chairs’, though our preference is the two buckets because they’re more comfortable (if not as good as the ‘Relaxation’ front pair), enable a slim walk-through section to the third-row bench, and provide extra storage depth between the backrests when they’re folded.
As for the three-position third row … it’s brilliant. Access from the second row in the seven-seat version is fully electric (albeit quite slow), while seated in the third row you get loads of room and forward vision.
Features wise, the third row offers electric cushion slide and backrest tilt, three-setting seat heating, roof-mounted air vents, four cupholders, two USB-C ports and a pair of stereo speakers – all of which is staggering for any vehicle with this configuration.
The backrests of both two rows can be electrically folded and raised from the boot – at which point the Palisade delivers enormous cargo capacity – while even behind the second (712L) and third (300L) rows, there’s a tonne of luggage space, plus lovely carpeting and quality. And a full-size 21-inch alloy spare wheel below the floor!
Indeed, almost everywhere you look, the new-gen Palisade in its top-spec Calligraphy Hybrid AWD form goes beyond expectation.
About the only areas where it seems relatively mediocre is in its braked towing capacity (only 2000kg, with 160kg maximum tow-ball weight – though it is pre-wired for a trailer) and its capped-price servicing cost ($2600 for five years/50,000km, which isn’t cheap but then isn’t too expensive either).
There are more variants coming in 2026 – an off-road-biased Palisade XRT Pro with extra ground clearance (213mm versus 187mm in the Calligraphy), unique drive modes (Mud, Sand and Snow), and bespoke 18-inch alloys wearing knobbly Continental Cross Contact tyres.
A lower-spec variant (likely to again be called Elite) and a non-hybridised 2.5-litre turbo-petrol version with an eight-speed automatic are also in the local release pipeline.
Price wise, the XRT Pro is likely to approach the Calligraphy Hybrid eight-seater’s $89,900 list price (the seven-seater adds $1000) given its similar equipment, if it retains the Hybrid powertrain.
The Palisade Elite is likely to be priced at $79,900 as a Hybrid AWD, and perhaps $74,900 (both prices before on-road costs) as a regular petrol-powered version with all-wheel drive.
All those things are yet to be decided. But what remains undisputed is that the new-gen Hyundai Palisade has become one of the stars of late 2025.
It’s a cracking sequel to the similarly stunning, COTY-winning Santa Fe.