Toyota, the leading global car manufacturer, introduced the first successful mass-market hybrid electric vehicle, the Prius, in 1996. The company now focuses on a groundbreaking idea that goes against the norm. Toyota’s CEO, Akio Toyoda, previously shared his thoughts on electric vehicles and the reasoning behind their belief that their technology is superior. But why is this even important? Well, Toyota makes up 10.5 percent of total vehicle sales. In 2021 alone, the automaker sold 10.5 million vehicles globally. To put this into perspective, Volkswagen came in second with 8.6 million sales, while Ford followed with 3.9 million sales worldwide. Not only that, but it also overtook General Motors to become the number one automaker in the US, ending the latter’s 90-year reign as the top seller of vehicles in America. Basically, anything Toyota does carries a significant impact. It’s a company that offers various vehicles, including ICE, hybrid EVs, and hydrogen-powered cars, instead of specializing in one class. You may have also heard about Toyota’s investment of 35 billion in 30 all-battery electric vehicles that will be released by 2030. It sounds like a major move. However, compared to some competitors, this figure is low, considering Toyota’s influence. So, why is Toyota, a giant in the industry, reluctant to fully embrace electric vehicles while competitor automakers have pledged only to offer electric vehicles?
Outgoing Toyota CEO’s Thoughts on Electric Cars
Outgoing Toyota CEO Akio Toyoda previously said that “Battery electric vehicles are just going to take longer than the media would like us to believe.”
“The company’s goal remains the same pleasing the widest possible range of customers with the widest possible range of powertrains,” Toyoda furthered.
He also said that the powertrains would encompass hybrid models like the Prius and hydrogen fuel cell vehicles and conventional gasoline-powered models with internal combustion engines. The company will remain committed to this strategy, which is based on the fact that not every country will adopt EVs at the same speed due to the high cost of the vehicles and inadequate infrastructure.
“We want to leave all people with a choice, and rather than where or what we will focus on, we’ll wait a little longer until we understand where the market is going,” Toyoda said.
Toyota Criticized For Lack of Optimism on Electric Vehicles
Experts and consumers are re-evaluating Toyota’s position. Eco-activists and investors have criticized Toyota for being slow to embrace EVs and for potentially hindering the efforts of other global automakers to become more environmentally friendly. Even other car companies are criticizing Toyota, including the Polestar Head of Sustainability, Fredrika Klaren, who made a comment when asked about Toyota’s hybrid strategy.
“It’s not possible. We cannot continue using fossil fuels,” she said during a trip to Sydney.
Like Toyota, Klaren also believes that electric vehicles aren’t the only answer to climate issues, but said that hybrid technology won’t be too much of a help.
“To me, you’re still putting gasoline in the car, so don’t focus on that technology at all. If you keep focusing having that in your business plan, you’re not going to level up in the way you need to do in terms of this new technology,” she said.
“All companies need to have that strategy to enable us to combat climate change in time. So that’s our predicament here. We know this. We know there is no place for non-EVs on a large scale after 2030 in that scenario,” she added.
According to CNBC, Greenpeace now ranks Toyota last among ten automakers in their efforts to reduce carbon emissions. Critics argue that Toyota relies too heavily on its 25-year-old hybrid technology represented by the Prius and that today’s hybrid vehicles are not considered environmentally friendly. Katherine García, director of the Sierra Club Clean Transportation for All campaign, stated that just like any gasoline-powered car, the Prius hybrid operates using a pollution-emitting internal combustion engine.
“The fact is: a hybrid today is not green technology. The Prius hybrid runs on a pollution-emitting combustion engine found in any gas-powered car,” she said in a blog post published in 2022.
Garcia also noted how Toyota has been blatantly against the progression of electric vehicles.
“In fact, Toyota is actively blocking the transition to electric vehicles through its hardline stance and lobbying on a global scale against them. In just the past three years, Toyota lobbied against clean car regulations twice, once in 2019 and again in 2021. Toyota even refused to sign the global pledge made at the U.N. Climate Change Conference in 2021 to phase out dirty, gas vehicles by 2035,” she wrote.
Needless to say, it’s surprising that Toyota, despite being an early adopter of battery-powered transportation, is secretly working to impede progress on EV-friendly policies. So, does this mean that Toyota would ultimately give up on the EV market?
Toyota Is Big on Alternatives
Toyota executives have stated that the company is investing extensively in electric vehicles to respond to global warming. But as mentioned before, the company doesn’t believe that this alone would do much to address issues associated with climate change. The automaker continues to explore alternative fuel technologies such as the Prius hybrid and Mirai hydrogen fuel cell vehicle, which only emit water as a byproduct. Toyota is one of only two manufacturers of hydrogen fuel cell vehicles, the other being Hyundai. The Mirai, introduced in 2014, was the world’s first hydrogen fuel cell electric vehicle (FCEV), followed by Hyundai’s Nexo in 2018. The variety of alternate fuel-powered vehicles highlights Toyota’s commitment to meeting the United Nations’ sustainable development goals and the company’s goal to achieve carbon neutrality by 2050. The automaker’s electrified vehicle models are expected to reach around 70 by 2025. The CEO’s current focus on all types of vehicles instead of just one specific niche or category is a practical approach, as Toyoda has always shown flexibility in making decisions regarding the company’s future. Toyoda’s recent statements reflect Toyota’s stance of offering a variety of powertrains to customers rather than dictating a specific product.
Akio Toyoda’s Decision To Resign as Toyota CEO
But why has Toyoda decided to step down as CEO? Is it because of Toyota’s slow welcoming of electric vehicles? Well, according to him, “To advance change at Toyota, I have reached the decision that it is best for me to support a new president while I become chairman,” Toyoda told reporters.
Toyota announced that Toyoda will become the Chairman, while Chief Branding Officer Koji Sato will take over as CEO. Sato oversees the Lexus brand operations and motorsports for the Toyota group. Another reason why Toyoda is stepping down is that he thinks younger talents can come up with viable solutions to further progress the automotive industry.
“Younger people should be placed in the right job so they can come up with the answer to what the future of mobility should be.”
Toyota To Establish New EV Platform?
Following the sustained success of electric vehicle manufacturers such as Tesla and BYD, there are reports that Toyota is contemplating constructing an entirely new EV platform. A specialized EV platform could improve efficiency and enhance competition in the growing electric vehicle market. However, Sato must act quickly to catch up with other automakers who have already established a strong presence in the EV market. With no prior experience in EVs, Sato may face challenges in this field.
Toyota’s global reach is driven by its presence in developed and developing countries and its focus on a “learn locally, act globally” approach. Despite obstacles like the lack of infrastructure in some countries, Toyota remains dedicated to providing mobility to everyone. It has a strong global presence with over 370,000 employees and over 170 countries. Toyota also prioritizes knowledge-based approaches, with 20 design and R&D centers worldwide, and aims to contribute to reducing CO2 emissions and promoting clean energy for all as part of the UN’s sustainable priorities. To reach its goals, global implementation of electrification is crucial. Advances in connected, autonomous, shared, and electric cars are transforming the automobile industry. Toyota, as a mobility company, will continue to offer comprehensive transportation services in the future. Akio Toyoda highlights the importance of having a diverse range of vehicles in Toyota’s global strategy. The company’s goal is to achieve carbon neutrality by 2050 and make mobility accessible to everyone worldwide.