Toyota's Chairman Doubles Down on Electric Car Skepticism
Akio Toyoda, chairman of Toyota, predicts that only 30% of cars on the road will be electric.
Toyota Chairman's Bearish Forecast
Akio Toyoda, chairman of Toyota Motor, has once again expressed his skepticism towards battery electric vehicles (EVs). Last October, as global sales of EVs started to slow down, Toyoda stated that people are "finally seeing reality" on EVs. Now, Toyoda is further doubling down on his bearish forecast, boldly predicting that only three in 10 cars on the road will be powered by a battery.
Toyoda made this forecast during a recent business event and his remarks were uploaded to the company's media platform on Tuesday. He proposed a "multi-pathway approach" to tackle the enemy, CO2, suggesting that customers should decide the best path rather than it being determined by regulations or politics. According to Toyoda, around a billion people still live in areas without electricity, which limits the appeal of battery electric vehicles. Instead, he estimates that hybrids or vehicles using hydrogen technology will make up the majority of the market, with only 30% being fully electric cars.
Toyota's Lag in Electric Vehicle Push
Compared to its competitors, Toyota has generally been slower in aggressively pushing electric vehicles. While the Japanese company has committed to offering a lineup of 30 battery-powered EVs by 2030, Volkswagen plans to offer 70 all-electric models by the same year, and BMW aims to increase its delivery share of all-electric vehicles to 50%. Bloomberg estimates that by 2040, 44% of passenger cars on the road will be EVs.
Toyota and its chairman have faced criticism from shareholders for their slow transition to EVs. However, Toyoda may now feel somewhat vindicated as global EV adoption slows down, while sales of the company's hybrid vehicles continue to soar. Sales of Toyota's hybrid vehicles increased by 30% in the first 11 months of 2023, reaching a cumulative 3.1 million. The company credited strong sales in North America and Europe to its hybrid models, including the RAV4, Corolla, and Yaris.
Slowing Global Pace of EV Adoption
The pace of EV adoption appears to be slowing down globally. A recent report from Cox Automotive indicated a slowdown in the growth of the U.S. EV market. Furthermore, new rules from the Biden administration will reduce the number of electric vehicles eligible for federal tax credits, excluding models with Chinese-made battery parts. China, a major market for affordable EVs, is expected to report slower adoption in 2024 due to an uncertain economy. While Toyota's sales in the country grew by 17% YoY in November, the company is facing increasing competition from domestic brands.
Analysts believe that a slower pace of EV adoption could become a global trend. Charles Lester, a data manager at research firm Rho Motion, stated that exponential growth cannot be sustained indefinitely. As the market matures, a more moderate growth rate is expected.
