BMW Australia has so far avoided withdrawing any models under the country’s New Vehicle Efficiency Standard, and chief executive Vikram Pawah credits the brand’s electric vehicles for that position. Speaking about the company’s emissions standing, Pawah said EV sales have given BMW a compliance cushion, and he suggested this could leave room for the combustion engines the brand still builds, including V8 models.
Under the NVES, manufacturers must meet fleet-average CO2 targets that are adjusted for vehicle mass, with penalties applied for every gram per kilometre above the target. Electric vehicles count as zero emissions in the average, which means higher EV volumes can offset the output of petrol and diesel models. For passenger cars and SUVs the target is 117 g/km this year, but it falls to 92 g/km on 1 January 2027, a cut of 21 per cent that will tighten the pressure on every manufacturer selling in Australia.
Electric vehicles made up around 19.3 per cent of BMW Australia’s sales in 2025, with 5,187 EVs sold across the country that year. The iX1 was the best-seller in the category with 1,888 units, followed by the iX2 with 1,194 units. In some model ranges, 35 to 40 per cent of orders are now for electric versions, a share that will be central to whether BMW stays within the tightening targets.
The timing matters for BMW’s combustion line-up. The new G65 X5 arrives in Australia this quarter with two six-cylinder mild-hybrid variants, the 40d and the 40 xDrive, priced from AU$143,900 and AU$145,900 before on-road costs. A plug-in hybrid X5 50e and an electric iX5 60 are due in early 2027. BMW has globally confirmed a V8 version of the X5 for 2027, likely to be called the X5 M60, but the company has not committed to bringing that model to Australia.
The engine question extends beyond the X5. BMW M’s chief executive has said that the brand’s inline-six and V8 engines meet the Euro 7 standard, and that the engines could stay in production into the 2030s. The M350 xDrive, which replaces the M340i, keeps the B58 3.0-litre inline-six and uses a 48-volt mild-hybrid system to produce 437 hp (326 kW). It is priced at AU$128,900 before on-road costs and arrives in early 2027.
Several questions remain open. It is not yet clear whether BMW Australia will import the V8 X5, whether emissions costs will eventually be passed on to buyers through higher prices, or whether the electric share of sales will hold up as the 2027 targets come into force. How BMW answers these questions will show how far electrification can carry the brand’s petrol engines in one of its key markets.