In a year of record-breaking sales, Toyota has demonstrated that its success is not solely dependent on the burgeoning electric vehicle (EV) market. The automotive giant reported a monumental sales figure of 11,233,039 vehicles in 2023, yet only a fraction of these, specifically 104,018 units, were EVs, accounting for a mere 0.926 percent of total sales across Toyota, Lexus, and its other subsidiaries. This statistic underscores the company’s belief in the enduring relevance of combustion engines.
Chairman Akio Toyoda, speaking to a gathering of 200 corporate managers and executives, announced plans for a significant engine development project. This declaration echoed sentiments Toyoda shared at the 2024 Tokyo Auto Salon, where he stated, “We’re going to keep doing engines,” signaling the company’s unwavering commitment to combustion technology.
Toyoda, during a Q&A session, presented a skeptical view of the EV market’s growth potential, suggesting that battery EVs may never surpass 30 percent market share. He argued that the majority of the market would continue to rely on gasoline cars, hybrids, and fuel cell EVs. Toyoda also highlighted the potential of hydrogen-burning combustion engines as a promising avenue, notably omitting any mention of diesel.
The chairman’s discourse extended beyond technology, touching on the social implications of a rapid transition to EVs. He expressed concern for the 5.5 million individuals in Japan’s auto industry whose livelihoods are intertwined with engine manufacturing, as well as the financial struggles faced by engine-related suppliers in securing bank loans.
As the auto industry shifts its focus towards EVs, with numerous automakers announcing plans to phase out internal combustion engine (ICE) vehicles, Toyota’s stance is increasingly unique. Major brands like Jaguar, Chrysler, and Volvo, among others, have declared intentions to transition fully to electric models by the end of the decade. However, Toyota, through Toyoda’s words, affirms a different path, emphasizing the necessity of a diverse energy portfolio to achieve carbon neutrality.
Toyoda pointed out the infrastructural and societal challenges of a complete shift to EVs, especially in regions lacking access to electricity. For Toyota, which operates globally, an all-in approach to EVs is deemed impractical.
In contrast to the prevailing industry trend towards electrification, Toyota’s strategy reflects a nuanced understanding of global market dynamics, technological limitations, and societal needs. As the debate around the future of automotive propulsion continues, Toyota’s commitment to developing combustion engines alongside alternative energy vehicles positions it as a distinctive voice in the conversation on sustainable mobility.