Toyota to plow $35 billion into accelerating electric car shift

River Davis
Bloomberg

Toyota Motor Corp. wants the world to know it’s serious about competing in the market for battery-based electric vehicles.

The world’s biggest carmaker is planning to invest 4 trillion yen ($35.2 billion) to supercharge its EV push, with a target to sell 3.5 million units annually by the end of the decade, Chief Executive Officer Akio Toyoda said at a briefing Tuesday. Toyota will roll out 30 electric models by 2030, a step up from a prior plan to introduce 15 EVs globally by 2025.

The new targets show Toyota intends to compete seriously with Tesla Inc., Volkswagen AG and other global rivals as the car industry shifts away from combustion engines and into a new era of greener automobiles. The announcement also reflects a more aggressive push into the electric arena by Toyota, which has for years questioned whether the world — outside of parts of the U.S. and Europe — is truly ready for EVs.

Akio Toyoda speaks during a news conference on Tuesday, Dec. 14.

Toyota will also pour another 4 trillion yen into hybrid and fuel-cell car investments, bringing the total amount dedicated to electrification efforts to 8 trillion yen. That compares with a recent announcement by Nissan Motor Co. to invest 2 trillion yen in/on developing EVs and a commitment by VW to invest around 52 billion euros ($58.6 billion) in the development and production of new electric vehicles, the industry’s biggest push.

“Instead of predicting the future, we want to be ready for any change,” Toyoda said. “Until the path ahead is clear, we want to provide our customers with a range of options.”

Asked why Toyota decided to upgrade its targets, Toyoda said that new energy policies announced by nations at at the COP26 summit earlier this year prompted the automaker to update its targets. “As policies became clear we thought about our own policies and came up with this new figure,” Toyoda said.

Toyota’s been slower to release mass-market electric cars compared with European peers, choosing to invest in a wide range of emission-reducing vehicles from hybrids to hydrogen-powered cars. 

Toyota is betting that EVs are a good fit for countries with high incomes and built-out charging infrastructure as well as the ability to make and charge batteries with electricity derived from renewable sources, Toyota Vice Chairman Shigeru Hayakawa said in an interview last month. For regions that don’t fit those conditions, hybrids will play a crucial role in decarbonizing transportation over the coming decades, he said. 

For its Lexus brand of luxury cars, Toyota plans to make the lineup fully electric across the globe by 2035, Toyoda said.

Earlier this year, Toyota said its goal was to sell 8 million electrified vehicles in 2030, including 2 million fuel-cell cars and BEVs, with the rest consisting of hybrid vehicles. That’s out of the roughly 10 million vehicles it currently sells each year. 

More recently though, Toyota’s stepped up its EV push. That comes as a number of countries implement stricter emissions regulations and move to allocate more money for EV purchase incentives and charging stations.

Earlier this month, Toyota said it would be ready to sell only zero-emission cars in Europe by 2035 to align itself with the region’s ambitious climate plan. The following week, Toyota said it will invest $1.29 billion in an automotive battery manufacturing facility in North Carolina, part of larger plans to spend 1.5 trillion yen on battery production and research over the next decade.

“Not being 100% EV doesn’t mean we don’t have aspirations,” Toyoda said of the automaker’s decision to offer a wide range of electrified models. “Our actions over the next 5 years will change our future. We are leaving as many options as possible.”