Toyota CEO Bashes EVs with an Aggressive Statement, Buy Why?
H. Karan Kumar
Updated on Sept 19, 2023 | 6 min read
In the rapidly evolving world of automotive technology, the transition towards electric vehicles (EVs) has become a key focus for many automakers. However, Toyota CEO Akio Toyoda has taken a contrarian stance, investing in a range of electrified vehicles rather than going all-in on all-electric cars and trucks. In this article, we delve into Toyoda’s perspective, exploring his views on the adoption of EVs, the challenges faced by the industry, and Toyota’s unique approach to powertrain technology.
Toyota’s Electrified Vehicle Investment Plan
Despite criticism from investors and environmental groups, Toyota remains committed to investing in electrified vehicles. Over the next nine years, the automaker plans to invest $70 billion, with half of that amount allocated to all-electric battery vehicles. While some may argue that Toyota’s investment is smaller than its competitors, its global footprint and commitment to a diversified powertrain approach set it apart in the industry.
Toyoda’s strategy revolves around pleasing the broadest possible range of customers with the widest possible range of powertrains. Toyota’s electrified vehicle lineup includes hybrids, plug-in hybrids, hydrogen fuel cell vehicles, and a planned expansion of 15 all-electric battery models by 2025. By offering various powertrain options, Toyota aims to cater to different customer preferences and regional variations in infrastructure development.
Slow Adoption of Electric Vehicles
Toyoda has expressed his belief that the adoption of electric vehicles will be slower than anticipated by policy regulators and competitors. He cites several reasons for this, including the lack of adequate charging infrastructure, pricing concerns, and regional variations in customer preferences. Toyoda acknowledges that while fully autonomous cars are expected to be mainstream by now, the reality is that the transition to EVs will take longer than projected.
Moreover, Toyoda points out that meeting the regulations set by some states and countries to ban internal combustion engines by 2035 will be challenging. He references California and New York as examples and suggests that the timeline may be overly ambitious. Despite these challenges, Toyoda remains optimistic about the future, emphasising that customers still have many options while the industry navigates the transition to electric mobility.
Addressing Infrastructure and Supply Chain Challenges
One of the key hurdles in the widespread adoption of electric vehicles is the lack of charging infrastructure. Toyoda recognises this issue and highlights the need for significant investment in charging stations to support the growth of EVs. Additionally, he raises concerns about the future availability of essential materials like lithium and battery-grade nickel, which could lead to production and supply chain challenges in the next five to ten years.
Toyota’s Carbon Neutrality Goals
Toyota has set an ambitious goal of achieving carbon neutrality by 2050. While the company acknowledges the environmental benefits of electric vehicles, it also emphasises the importance of a holistic approach to reducing carbon emissions. Toyota highlights the positive impact of its hybrid vehicles, which have sold over 20 million units worldwide and saved approximately 160 million tons of CO2 emissions, equivalent to the impact of 5.5 million all-electric battery vehicles.
The automaker argues that the production of plug-in hybrids can result in lower overall carbon emissions than fully electric vehicles. According to Toyota, the ability to produce eight 40-mile plug-in hybrids for every 320-mile battery electric vehicle allows for significant carbon savings. This perspective challenges the notion that all-electric vehicles are the sole solution for achieving carbon neutrality.
Toyota’s Commitment to Franchised Dealerships
Unlike competitors planning to overhaul their franchised dealership networks, Toyota is committed to maintaining its existing model. Toyoda reassures dealers that the franchised model will remain intact despite the industry’s transformation. This statement comes in response to dealers’ concerns about the impact of direct-to-consumer sales by electric vehicle startups like Tesla.
While some manufacturers have offered buyouts to dealers who do not wish to invest in EVs, Toyota stands by its franchised dealership network. Toyoda’s message to dealers emphasises stability and continuity, reassuring that the existing model will persist amidst industry changes.
Celebrating Success: Toyota’s Achievement Over General Motors
In a lighthearted moment during his speech, Toyoda expressed his joy at Toyota outselling General Motors (GM) in the United States for the first time. Despite recognising that this success may not be sustainable, Toyoda celebrated the achievement by performing a happy dance on stage. This anecdote showcases Toyota’s competitive spirit and Toyoda’s pride in the company’s accomplishments.
Conclusion
While many automakers are betting heavily on all-electric vehicles, Toyota CEO Akio Toyoda’s contrarian stance highlights the importance of a diversified approach to electrification. Toyoda believes that the adoption of electric vehicles will be slower than anticipated, and challenges such as infrastructure development and material shortages need to be addressed. Toyota’s commitment to investing in various electrified vehicles reflects its goal of pleasing many customers with various powertrain options. As the automotive industry navigates the future of mobility, Toyoda’s perspective provides valuable insights into the complexities and opportunities inherent in the transition to electric vehicles.
