The future of Holden will be on the agenda of a meeting between Prime Minister Tony Abbott and South Australian Premier Jay Weatherill on Thursday.
Media reports suggest the board of Holden's American owner General Motors has already decided to pull out of Australia from 2016, but won't announce the final decision until early in the new year.
Weatherill, whose state is home to Holden's operations, says the federal government needs to restore $500 million in assistance to the industry.
"The future of Holden is in the hands of the prime minister," he told Sky News on Monday.
Labor says the federal government has advice that a $150 million annual boost to industry support would keep Holden in Australia until 2025.
The government is waiting on a Productivity Commission report due by the end of March before deciding its next move.
Weatherill says the governments of other car-making nations spend more per person than Australia on automotive subsidies.
Federal Environment Minister Greg Hunt says the government's plan to remove the "deadweight" cost of carbon tax would assist Holden.
"We could give Australian vehicles a level playing field," he told reporters in Canberra, adding car exporters in Japan, Korea and Thailand paid no carbon tax.
Parliamentary secretary Steven Ciobo said there was a "billion dollars" in assistance already and a "further billion dollars to flow".
However, the Parliamentary Budget Office costing of the coalition's election commitment to the automotive transformation scheme puts the figure at a total of $500 million in the period to 2016/17, including $48 million in 2013/14.
South Australian Labor MP Nick Champion said he was confident Holden would stay in Australia if the government put forward the right suite of policies.
There was no reason to think Holden was planning on pulling out.
"The only people who are saying that are unnamed cabinet ministers, who don't have the guts to come out and put their name to their claims," Mr Champion said.
Abbott has said the government will not provide a "blank cheque" to Holden and the company owed its workforce, suppliers and the public an explanation about its future.
The company told its workers in a bulletin last week they would be the first to know of any decision.
Holden boss Mike Devereux is due to front a Productivity Commission inquiry hearing in Melbourne on Tuesday.
The car maker last year agreed with the Labor government to a $275 million assistance package in return for developing and building two new model cars in Australia from 2016.
However, it is now thought to need as much as $500 million and repeatedly has warned that its local operations are not sustainable without ongoing support.