Toyota Holds Firm On Hybrids Since They Don't Want To 'Waste' Money On EVs

Recently, Toyota's U.S. Chief Executive Officer, Ted Ogawa, candidly stated that he foresees pure electric vehicles holding merely a 30% share of the U.S. new car market by 2030, which is only half of what the U.S. Environmental Protection Agency (EPA) aimed for last year.

Ogawa remarked that as the biggest fan of hybrid vehicles in the automobile industry, Toyota believes it makes more sense to directly purchase credits to satisfy the EPA's requirements rather than waste money on pure electric vehicles.

In an interview, Ogawa expressed that Toyota plans to respond to customer needs which, in his view, lie in varying degrees of electrification. Typically, this electrification appears in the form of hybrid cars equipped with fuel engines.

At present, Toyota is investing $1.39 million in North Carolina, USA, to construct a comprehensive battery production facility. The batteries produced will be used for electric and hybrid vehicles sold in North America. Since 2021, Toyota has invested approximately $17 billion in its U.S. manufacturing business, primarily for the production of hybrid vehicles.

Ogawa said, I know that EPA is now reconsidering what the regulation level should be. However, again, our starting point is what the customer demand should be. So, for example, 2030 regulations said the new-car market, more than half of it should be BEV, but our current plan is like 30%. We are respecting the regulation, but more important is customer demand.

How, then, will Toyota bridge the gap between the proposed light-vehicle emissions regulations and the company's pure electric vehicle sales?

As Ogawa states, Regulation-wise, realistically we have to prepare something about credit purchase. The wasted investment [on electric vehicles] is worse than the credit purchase.

Toyota is one of the world's top-selling car manufacturers, but last year, the share of its pure electric vehicles in total sales was less than 1%. Ogawa acknowledged the current gap between them and Tesla, but he believes the Japanese automaker will catch up, not only in terms of products but also in the ecosystem of pure electric vehicles, such as home charging and energy management.