Toyota Motor Corporation have released their FY2023 financial results and guidance, setting out a medium-term EV strategy still firmly focussed on hybrid electric vehicles. 

The company’s early steps into the benefits of electric motors in passenger vehicles continue to limit the company’s electrification ambitions relative to their competitors.

In 2022, the Toyota group accounted for 57% of the total market for non-plug-in hybrid vehicles (excluding mild hybrids). However, at the same time, they accounted for less than 1% of sales of battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).

The Prius/Lexus hybrid range presented Toyota with the original, established electrification brand within the automotive space, but expansion beyond that technology has been slow. Projections for the next financial year will see Toyota’s electric vehicle (EV) sales (BEVs + PHEVs) triple, but will still only account for around 2% of the global market.

The recent appointment of new CEO Koji Sato was seen as a signal of a potential change in direction, but short-term projected sales appear to lack ambition. While the company, amongst others, has been hit with disrupted production lines due to semiconductor shortages, they appear to have fallen further behind their rivals in pushing out new plug-in and battery EV models.

EU-wide legislation will see all petrol and diesel hybrids banned by 2035, so positioning the hybrid technology as an interim solution while waiting for the carbon costs of producing electricity to begin to fall seems short-sighted. Adapting major automotive supply chain infrastructures has proven to be difficult for ICE incumbents. Big established auto logos have become trapped, balancing falling profitability in ICE vs EV sales with the ramp-up costs of upscaling manufacturing supply chains to deliver new EV-platform vehicles while transitioning away from internal combustion engine (ICE) supply chains.