Toyota CEO Akio Toyoda speaks during a small media roundtable on Sept. 29, 2022, in Las Vegas.
LAS VEGAS — Toyota Motor CEO Akio Toyoda stated last week simply what he wanted his legacy to be: “I love cars.”
Just how the 66-year-old racer, car enthusiast and company scion will be remembered regarding his approach to all-electric vehicles versus gas-powered performance cars, like the Supra, or hybrids, like the once-groundbreaking Prius, will play out in the years to come.
Toyota, the world̵[ads1]7;s largest automaker, plans to invest $70 billion in electrified vehicles over the next nine years. Half of this will be for all-electric batteries. While that’s a significant investment in EVs, it’s smaller than some competitors’ plans, and not as much as some would like given Toyota’s global footprint.
Despite criticism from some investors and environmental groups, Toyoda this past week doubled down on its strategy to continue investing in a range of electrified vehicles in contrast to rivals such as Volkswagen and General Motors, which have said they are going all-in on all-electric vehicle.
The plans could arguably cement Toyoda’s “I love cars” legacy or weaken it, depending on how quickly drivers adopt electric vehicles.
“To me, playing to win also means doing things differently. Doing things that others might question, but that we think will put us in the winner’s circle the longest,” he said Wednesday during Toyota’s annual dealer meeting in Las Vegas, which per the way, was called “Playing to Win.”
Akio Toyoda with new Toyota Supra
Paul Eisenstein | CNBC
Toyoda, who described Toyota as a large department store, said the company’s goal “remains the same, pleasing the widest possible range of customers with the widest possible range of powertrains.” These powertrains will include hybrids and plug-in hybrids such as the Prius, hydrogen fuel cell vehicles such as the Mirai and 15 all-electric battery models by 2025.
Aside from the EV plans, Toyoda discussed several other aspects of the company’s business last week during the dealer meeting and a small roundtable with US media.
EV regulations and materials
Toyoda reiterated that he does not believe that all-electric vehicles will be adopted as quickly as political regulators and competitors believe, due to a number of reasons. He mentioned a lack of infrastructure, prices and how customers’ choices vary from region to region as examples of possible roadblocks.
He believes it will be “difficult” to meet recent regulations calling for a ban on traditional internal combustion engine vehicles by 2035, which California and New York have said they will adopt.
“Just like the free autonomous cars that we’ll all be driving now, electric cars will just take longer to become mainstream than the media would have us believe,” Toyoda said in a recording of the dealer comments shown to reporters. “In the meantime, you have many options for customers.”
Toyoda also believes there will be “huge shortages” of battery-grade lithium and nickel over the next five to 10 years, leading to production and supply chain problems.
Toyota’s goal is carbon neutrality by 2050, and not just through all-electric vehicles. Some have questioned the environmental impact of electric cars when factoring in raw material extraction and total vehicle production.
Since the Prius was launched in 1997, Toyota says it has sold more than 20 million electrified vehicles worldwide. The company says that these sales have avoided 160 million tonnes of CO2 emissions, which is equivalent to the effect of 5.5 million all-electric battery cars.
“Toyota can produce eight 40-mile plug-in hybrids for every 320-mile battery electric vehicle and save up to eight times the carbon emitted into the atmosphere,” according to prepared comments for Toyoda provided to the media.
Toyota’s reluctance to launch all-electric vehicles has been criticized by environmental groups such as the Sierra Club and Greenpeace, which has the Japanese carmaker at the bottom of its auto industry decarbonisation rankings for the past two years.
Standing ovation with dealers
Toyota has no plans to overhaul its franchise network as it invests in electrified vehicles, as some competitors have announced.
“I know you’re anxious about the future. I know you’re worried about how this business will change. While I can’t predict the future, I can promise you this: You, me, us, this business, this franchise model is isn’t going anywhere. It’s staying exactly as it is,” he told the dealers to thunderous applause.
The franchise dealer model has come under pressure after Tesla and newer EV startups began selling directly to consumers rather than through traditional dealers.
GM has offered buyouts to Buick and Cadillac dealers who don’t want to invest in electric cars, while Ford announced last month that dealers who want to sell electric cars must be certified under one of two programs — with investments of $500,000 or 1.2 million dollars.
As part of his light-hearted and comedic remarks to dealers, Toyoda said he danced when the automaker outsold GM last year for the first time ever in the U.S.
Despite Toyota executives saying the performance wasn’t sustainable — GM led through the first half of this year — Toyoda still felt there was cause for celebration.
“At Toyota, we like to keep our heads down and not talk about our success,” Toyoda said before re-enacting the dance on stage. “But when I heard you were No. 1 in the US last year, I actually did a little happy dance in my office.”