Toyota said it will pour $35bn into a shift towards electric vehicles as the world’s biggest carmaker sets itself up for direct rivalry with Tesla and joins other groups in a push for carbon neutrality.
It is a major step up in its electric targets. It aims to sell 3.5 Million battery-powered vehicles annually by 2030. There will also be 30 EV models launched by then, which will include commercial vehicles and sports cars.
In the past, the company has argued that a longer-term solution to global warming should be a mixture of hybrids and EVs as well as hydrogen-powered vehicles rather than a single bet on batteries-powered cars.
But this focus has worried investors, who fear the group is dragging its feet on its electric plan, particularly as the technology has driven Tesla’s stratospheric rise in market value.
“I wasn’t interested in Toyota’s EVs until now. But now I’m interested in future EVs,” said Toyota president Akio Toyoda in a press conference.
Some investors believe that Toyota is now stepping up its electric sales targets, despite being behind General Motors and Volkswagen.
“They don’t make announcements like this unless they believe they can do it and want to do it. It tells me there is a high level of commitment,” said Christopher Richter, chief auto analyst at CLSA Capital Partners Japan in Tokyo.
Even though the figure is lower than the $58.5 billion pledge by Volkswagen to electric vehicles, it is still much higher than the $17.7 Billion Nissan promised when it revealed its long-term EV strategy in November.
The $35 billion will be divided equally between battery investment and car development. This is a significant increase over the previous announcements earlier this year.
It had previously stated that it would combine electric and fuel-cell vehicle sales by 2030 to reach 2 million and invest $13 Billion in batteries.
Toyoda said the company’s high-end Lexus brand would be at the forefront of the company’s more aggressive battery push, with all of these models becoming pure electric by 2035.
The company plans on targeting customers in the U.S., China and other countries where the brand is well-known. The company hopes Lexus customers switch to electric faster than other models.
“Battery cars are going to be expensive and the people best positioned to buy them now are the people who own Lexuses, not Corollas,” said CLSA analyst Richter.
However, the company did not commit its entire bet to EVs. It argued that it was unable to accurately predict the pace of adoption or the development of the technology.
“Toyota can’t decide what menu customers will choose, so we want to expand the range of options we have,” said Toyoda. “Leaving options for everyone and following the right solution as soon as we find it out. That is how we can be competitive and survive.”
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Toyota’s latest ambition for zero emissions follows its announcement earlier this month that it would be ready, from 2035, to only sell vehicles in western Europe that did not emit carbon dioxide.
But this was based on the assumption that sufficient renewable energy capacity and electric charging and hydrogen refuelling infrastructures would be in place by then in Europe, which accounts for about 10 percent of Toyota’s global sales.
This story first appeared in The Financial Times, Dec. 14, 2021.
Copyright The Financial Times Limited 2021
Reprinted with permission.
Source: Inside Climate News