Toyota Kluger to continue in Australia, could go electric

Key highlights:

• Toyota confirms the Kluger nameplate will continue in Australia
• An electric Kluger BEV remains unconfirmed for right-hand drive
• Kluger sales have fallen 45.8% year-on-year in 2026 so far locally

The Toyota Kluger will live on in Australia, but its future powertrain remains a mystery. Toyota could replace the seven-seat family SUV with an electric model, introduce a larger hybrid or continue with the current hybrid through a different production source. 

The clock is ticking, too: production of the current Kluger hybrid in the US is due to end in December 2026.

Toyota Australia confirmed it has no immediate plans to introduce a Highlander EV version of the Kluger, and the factory is not currently building it in right-hand drive. Local executives also noted that Australia’s EV infrastructure and seven-seat EV market demand need further development.

Toyota confirms the Kluger nameplate will continue

Toyota Australia sales and marketing boss John Pappas mentioned to Drive Australia that the Kluger badge will remain, but the company has yet to reveal its next iteration or confirm its Australian powertrain.

He said. “We’ve got nothing to confirm on the powertrain for Australia, but the nameplate will continue.”

The current Kluger hybrid is built in the US, where production will wrap up in December 2026, and in that market, Toyota sells the Kluger as the Highlander, and an electric replacement is on the way. However, Toyota has not confirmed the electric Highlander for Australia, or even committed to building it with right-hand drive

The current Toyota Kluger lineup in Australia has a single, hybrid-only powertrain layout across all three model grades, with a 2.5-litre Toyota Hybrid Electric System paired with an electronic all-wheel drive / e-Four system.

Option 1: An all-electric Toyota Kluger

The Highlander BEV is the most obvious electric alternative, but Australian supply remains uncertain. Toyota will replace the US Highlander with the Highlander BEV, making it a logical candidate for Australia’s next Kluger.

The catch? Toyota has not confirmed a right-hand-drive version. Pappas said there was “nothing to confirm on [a] right-hand-drive BEV for Kluger at this stage”.

Demand for three-row electric SUVs from established car brands has also been modest in Australia: Kia EV9 had 13, while the Hyundai Ioniq 9 had 7 average monthly sales so far in 2026.

The Tesla Model Y L six-seater has bucked that trend, accounting for about half of all Model Y sales. Its price of $74,900 plus on-road costs sits $22,000 below the entry-level Kia EV9.

Even so, Toyota sees an opportunity for larger electric SUVs as Australian buyers increasingly consider electric vehicles. Pappas said electrified SUVs were gaining traction, particularly among people driving in cities and metropolitan areas and he described an electric SUV as a good alternative for buyers covering suitable distances around town.

The Kluger also serves fleet customers, giving Toyota another factor to consider when deciding between a fully electric vehicle and a broader powertrain strategy. Pappas said Toyota would assess whether the next Kluger should use battery-electric power or follow a “multi-pathway approach”.

Toyota also has a related electric SUV in its wider plans. The Lexus TZ, the luxury sibling of the Highlander BEV, is planned for right-hand-drive production for Australia and the UK.

However, Lexus will build the TZ in Japan rather than at the Highlander BEV’s production plant in Kentucky, US. That gives Toyota another model to consider when assessing its electric SUV strategy, although it does not confirm that the Toyota-badged Kluger will follow the same path.

Option 2: A larger Grand Highlander hybrid

Another possibility is the Toyota Grand Highlander, a family SUV built in Indiana, US, which is larger than the Kluger and could provide Australian buyers with more space. However, Toyota does not currently build it in right-hand drive.

The Grand Highlander launched more than three years ago and is approaching a mid-life facelift, expected next year, and developing a right-hand-drive version now would leave Toyota with less time to recover the investment before the model’s next major replacement. Toyota has not ruled it out, though.

“We’ll always consider if these vehicles are made in right-hand drive and are meeting our requirements for our market, and then we’ll obviously confirm those at those timings. But nothing at the moment,” Pappas said.

Also read: Toyota Australia says diesel remains critical for regional buyers

Option 3: Keep the Kluger hybrid and source it from China

Toyota could retain the current Kluger hybrid but shift production to China. The model is built at a factory in Guangzhou, among other locations, and that factory is now producing right-hand-drive vehicles.

Such a move would mark an unprecedented step for Toyota: building a vehicle in China specifically for the Australian market, and it could also give Australian buyers access to upgrades planned for China, including a new range-extender hybrid drivetrain due in 2027.

Pappas addressed the possibility of sourcing Toyota vehicles from China more broadly, rather than confirming a China-built Kluger.

He added that Toyota would assess each option on its merits and the company has nothing to confirm about vehicles coming from China at present, but it will not rule out that possibility.

Pappas said Toyota would consider vehicles regardless of where they were sourced, provided they suited the Australian market and met customer needs in the relevant segment.

Toyota Kluger sales have fallen sharply

The Kluger has a long history in Australia, but the current generation has lost ground in the sales race. Toyota launched the current model locally in 2021, following its US showroom debut in 2019, and the company has reported 3577 Kluger sales so far in 2026, down 45.8% from 6598 over the same period in 2025.

Sales have also fallen well below the equivalent totals for earlier years.

The Kluger sold 8098 units in 2025, down from 12,562 in 2022, the current generation’s best result since launch. Its all-time Australian nameplate record remains 13,955 sales in 2015

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