A recent headline regarding Toyota and a clever response to it caught my attention. The headline: “Toyota president calls meeting California zero-emissions requirements ‘difficult’.” The response from our friend Nikhil Chaudhary: “‘difficult for Toyota’.” It was a clever way to correct the headline, and it highlights the key point superbly: Meeting California’s zero-emissions requirements isn’t difficult for all automakers, or even for most automakers. It’s difficult for Toyota because Toyota has become a top laggard in the transition to electric vehicles.
'difficult for Toyota'
— Nikhil Chaudhary (@NCBirbhan) September 30, 2022
California recently passed legislation that commits the state, which is by itself one of the biggest economies in the world and one of the biggest auto markets in the world, to 100% electric vehicle sales by 2035.
Regarding this commitment, Toyota President Akio Toyoda said to reporters last week, as translated, “Realistically speaking, it seems rather difficult to really achieve [it].” We’re talking about 2035. That’s 13 years away.
In August, 22% of new vehicle sales in China, the largest car market in the world, were fully electric (30% had a plug). That’s August 2022, not August 2035. China, notably, modeled its EV policies in large part on California’s. (A few years ago, I talked with a Chinese-American professor at a California university who was a top advisor to the Chinese government on this.)
In the same month, August 2022, 13% of new vehicle sales in Europe were fully electric (21% had a plug). The UK is up to 17% of new vehicle sales being fully electric (22% having a plug). Norway is up to 77.7% of new vehicle sales being fully electric (89.1% having a plug).
Looking globally, 11% of new vehicle sales are fully electric vehicles sales, and 15% have a plug. In August 2022.
If Toyoda truly thinks Toyota can’t go fully electric in California by 2035, then he’s lost. Whether he truly believes that or not, though, his recent statement indicates that Toyota just can’t keep up. It has been failing in regards to the EV transition, and Toyoda thus wants to slow the whole industry down.
I’m wrapping up our 3rd quarter U.S. EV sales report. More than 200,000 fully electric vehicles were sold in the United States in the 3rd quarter. Guess how many fully electric Toyotas were sold here. Zero.
I’m also working on our quarterly U.S. auto industry sales report (see the previous one here). Toyota’s U.S. auto sales were down by 26,419 vehicles (5%) in the 3rd quarter of 2022 versus the 3rd quarter of 2021. Compared to the 3rd quarter of pre-pandemic 2019, Toyota’s sales were down by 94,885 units (17%). In those same periods of time, fully electric Tesla saw its sales grow by 32,000 (32%) and 82,367 (169%).
Toyota became the top selling automaker in the United States in 2021, dethroning GM for the first time since 1931 (the first time any other company was #1 — Toyota, of course, was never #1 in the USA before 2021). “I actually did a little ‘happy dance’ in my office,” Toyoda said. “Thankfully nobody saw it!” Toyoda may be celebrating that it shrunk less than GM lately, but Toyota’s party time may not last long if it’s going to stick to this stubborn path of EV resistance. (Notably, GM now plans to go fully electric by 2035.)
Toyota still has plenty of influence. It reportedly was a key entity blocking the Build Back Better bill and watering down some portions of the EV tax credits made available through the Inflation Reduction Act of 2022. But its commitment to fighting EV progress is not going to fare it well in the long run.
Naturally, these statements from Akio Toyoda are not entirely surprising. Toyota has been vocal about its desire to slow down the EV transition for years, and it has marketed misleading “self-charging electric cars” (hybrids) while discouraging people from buying true electric cars. The company, or at least its leadership, don’t believe in a battery-electric vehicle future. While much of the industry had pivoted and was starting to seriously pursue a battery-electric vehicle future, Toyota was hyping and introducing the Toyota Mirai, a hydrogen fuel cell vehicle that is the epitome of impracticality, inefficiency, and a non-bright future. (Toyota sold 7 units of the Mirai in the United States in September, and 1,437 in the first 9 months of the year as a whole.)
There’s no doubt about it: Toyota is a giant automaker. In fact, it was the top selling automaker in the world in 2021, not just in the USA. It has influence and it’s not losing customers so quickly that panic can seem logical right now — even as it is a massive laggard in the EV transition that’s well underway globally. Akio Toyoda can convince himself that all of the talk of 100% electric vehicle sales by 2030 or 2035 or even 2040 is fanciful and will never come to pass. That talk has been going on for a decade and look at where Toyota stands today. However, the trends seem clear to me, the benefits of electric vehicles are clear, and the decision by several automakers to be fully electric by 2030 or 2035 are out in the open. A company could get away with dragging its feet for the past decade — there are no auto company bankruptcies that have ensued from slow development of EVs. But for the next decade? Can you be a laggard in the EV industry in the next decade and grow? Can you be a laggard in the EV industry in the next decade and survive? It seems that Toyota is intent on finding out, and Toyoda seems convinced that his company will do well to slow-walk this transition and bet on much more reliance on fossil fueled vehicles in the years to come.
All of this is not to say Toyota is doing nothing. The company recently increased its planned investment in a US EV battery factory from $1.3 billion to $3.8 billion. Furthermore, the company plans to sell 3.5 million fully electric vehicles a year by 2030. That’s a lot. It’s just that it’s not quite 35% of Toyota’s 2021 sales. That’s far away from the 100% requirement California has for 2035. Also, heck, it’s barely more than the percentages we’re seeing in China and Europe. Good luck, Toyota.
Featured image by Kyle Field | CleanTechnica
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