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With 12 million cars sold, the Toyota Group has been the world’s largest automaker for five straight years. Contrast this to its EV production: Toyota sold just 104,000 battery-electric vehicles in 2023, less than what Tesla sells in a month. Has Toyota missed the EV train - or are they playing an entirely different game?
Tesla and BYD dominate the world’s EV market. Toyota does not even make it into the top 15. Can Toyota close the gap?
BEVs make up a mere 1% of Toyota’s sales. Hybrids (HEVs) now account for 33% of Toyota’s total sales, and demand is growing. Ever since introducing the Prius back in 1997, Toyota has been pioneering the electrification with hybrid vehicles (HEV).
Toyota has been riding on the hybrid wave for years. This is why they have been enjoying record profits quarter after quarter. But for how long? Is Toyota trapped in an innovator’s dilemma? HEVs are expected to grow even further before peaking out in 2030.
Toyota never went all in on EVs. Instead, Fuel Cell cars powered by hydrogen were always in the center of Toyota’s vision. But its Mirai Hydrogen car never really took off. Its high price and missing H2-charging infrastructure have been impediments to growth.
Toyota also underestimated the speed of the global EV market. So far, it offers only two pure EVs: the bZ4X and the Lexus RZ, and it had to delay the start of electric SUV production in the US to 2026. Is Toyota really serious about the pivot to EVs?
When you look at the numbers, Toyota has ambitious goals for BEVs:
The question is not: can, but how fast will Toyota pivot to EVs. Based on Nikkei reports, Toyota already had to revise this target down by 30% to 1 million in 2026.
The truth is: Toyota does not have a choice with emission-regulation slated to become stricter from 2026. The new management has started to confront the EV shift heads-on. The key initiative so far: Toyota’s “BEV Factory” that coordinates the new battery-electric strategy.
Stay tuned for Part 3 where we’ll discover the BEV Factory and their dream of a 1000 km range EV.
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