The chairman of Toyota is most definitely not all-in on EVs—or the idea that they might even be a third of the market, perhaps ever.
In comments published Tuesday in Toyota’s own Toyota Times corporate newsletter, Toyota chairman Akio Toyoda said in an event earlier this month that he does not see battery electric vehicles reaching more than 30% market share—no matter how much technological or cost-reduction progress is made with them.
The remaining 70%, Toyoda argued, will be taken up by hybrids and hydrogen fuel-cell vehicles, with internal-combustion engines remaining part of the mix.
2022 Toyota Mirai XLE
Earlier this month, Toyoda also announced two new potential internal-combustion engine programs. In these recently published comments, he noted that there is so much opposition to new engines as a path forward that banks might not even lend money to engine-related suppliers.
The top executive's new 30% ceiling for EVs runs counter to the automaker’s recent plans, as partly already mapped out with manufacturing agreements. Last year Toyota announced that it aimed to sell 1.5 million battery electric vehicles (BEVs) by 2026 and 3.5 million BEVs by 2030—both global targets. That effort includes EVs due for U.S. production starting in 2025, plus at least one other new U.S.-bound EV due in 2026.
Toyota EV manufacturing plans - 2023
Toyota made 8.69 million vehicles in the fiscal year ending March 31, 2023. If Toyota’s output remains about the same, that target for 2030 would see EVs making up about 40% of the market. Given Toyoda’s comments and the manufacturing plans released last year (above), it's unclear if this reflects a pending retraction in the company’s EV plans through the decade.
Currently EV battery packs reflect about 40% of the total cost of a battery electric vehicle. But an analysis last year from the Rocky Mountain Institute, taking into account the idea that battery costs will likely halve through the decade, anticipated that EVs will amount to two-thirds of global sales by 2030. Looking ahead to 2040, Bloomberg New Energy Finance forecasted that EVs will make up 75% of new-vehicle sales by then, and account for 44% of the vehicles on the road.
2024 Toyota Prius
Cost may be part of it, but it's not the nut of the argument. The chairman again stressed that the primary target should be CO2 reduction—not converting specifically to battery-electric or fuel-cell tech. Toyota has long argued that a push toward more hybrids and plug-in hybrids instead would make more of a difference in CO2 over a vast number of global sales, and in recent years it’s continued to increase that hybrid percentage.
Toyoda pointed out that about a billion people in the world live without electricity, and a battery electric model won’t work for them. How a country tackles carbon neutrality depends on its own energy situation, he argued.
Toyota EPU concept
But it’s not just Toyota's position for elsewhere in the world. Toyoda has called the U.S. target of 50% EVs by 2030 “very difficult,” while a range of entire brands from Volvo and Bentley to Cadillac and Buick have said they’ll go entirely electric by then. If cost does come down, will Toyota the company still be saying the same in five years?
