Without the world’s largest car company, any shift to electric vehicles will likely be incomplete, even if promising start-ups and legacy rivals try to fill the gap. Toyota, which sold 11.3 million vehicles globally last year, is by far the largest automaker by sales volumes. But in recent times, environment advocacy and pro-EV groups have accused it of being slow to accept the urgency of zero-emissions vehicles.
In a recent interview with Automotive News, Toyota Motor North America’s CEO Ted Ogawa reaffirmed the brand’s "consumer-dependent" approach to EVs. Ogawa said that Toyota was planning to increase the share of its pure electric car sales, which were just 0.7% in 2023.
Still, the company believes EVs will only be 30% of the U.S. market by 2030. And that figure is far less than the EV market envisioned in Environmental Protection Agency proposals, not to mention the Biden White House's own goals.
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Toyota's "multipath" approach to electrification.
Toyota has long held the stance of offering customers the choice of hybrids, BEVs, PHEVs, and FCEVs. Toyota believes in a cautious approach, but environment experts believe otherwise. They say climate urgency requires aggressive EV adoption. If not, it could be too late for the planet to heal.
"I know that EPA is now reconsidering what the regulation level should be. However, again, our starting point is what the customer demand should be. So, for example, 2030 regulations said the new-car market, more than half of it should be BEV, but our current plan is like 30 percent," Ogawa told Automotive News. "We are respecting the regulation, but more important is customer demand."
Toyota has long been accused of slow-walking and even lobbying against EV adoption, but in this case, it's not alone.
After vigorous lobbying by automakers, dealer groups, and oil companies, the Biden administration is reportedly considering relaxing the EPA rules. In the initial proposal, the EPA required two-thirds of new light-duty passenger car sales to be electric by 2032. An alternative ruling that the EPA might finalize would still require more than 50% EV penetration—again, far lower than what Toyota is gearing up for.
But Ogawa further endorsed Toyota’s stance. He said 2024 would be the “starting year” of Toyota’s plans to truly broaden its plug-in line-up. As per Ogawa, Toyota is "catching up" in not only offering more EVs but also in establishing an ecosystem around charging and energy management. He added that his company would continue pursuing a multi-pronged approach. This includes offering consumers the choice of hybrids, BEVs, PHEVs, and FCEVs.
At last year's Japan Mobility Show, Toyota revealed a variety of electric concepts, including a sports car, a Land Cruiser, a compact SUV and a truck—some of which seem likely for production. Toyota is also working heavily on solid-state batteries and plans to build a three-row electric SUV in the U.S. that would compete with the Kia EV9 and the like.
Ogawa added that Toyota would respect the upcoming regulations, but more importantly, it would keep an eye on what the customers want. A blanket EV adoption would equal a “wasted investment,” worse than purchasing carbon credits, which is one way entities can offset their carbon emissions, by indirectly funding projects that reduce emissions elsewhere.
The 86-year-old Japanese automaker has manufactured gas-powered and hybrid cars for most of its existence. It pioneered lean manufacturing in the 1980s, which involved streamlining supply-chain, minimizing production errors, maximizing worker efficiency at the assembly line, and reducing costs—something all its major rivals, including American carmakers, ended up adopting.
The upcoming elections and the EPA's final ruling would undoubtedly impact the whole industry. But whether Toyota’s "multipath" approach to electrification matches consumer demand or leaves the automaker behind remains to be seen.
