Could Toyota really be at risk of failure?
This is an exploration of why Toyota, a company that at one time was the darling of environmentalists, has pivoted so far that it is now regarded by Greenpeace and others as an enemy of action on climate change behind only oil companies and at the same level as Exxon Mobile and Chevron.
My conclusion is that Toyota is not against the environment, but that their projections show an EV transition most likely end the company. Obviously, oil companies’ revenue will plumet if there are no more fossil fuel cars, but we usually assume car makers can just switch and make electric cars, so there should be little to for them to fear. Yet Toyota seem to have more to fear than even all but two of the oil companies. Given a global transition to EVs is now inevitable, Toyota is now on a mission to delay the inevitable as long as possible.
The key points are:
- The revenue per vehicle for manufacturers will fall as a result of the transition to EVs.
- The transition to EVs will result in a reduction in labour to build EVs from over 30 hours to 10 hours.
- New companies such as Tesla and the Chinese brands are expected to take 30% of the market.
- Toyota cannot see themselves gaining sufficient market share from an EV transition
In 2022, Toyota produced the more vehicles than any other automotive company, but in what many see as crazy, is ranked only second behind Tesla in terms of market capitalisation, despite last year in 2021 Tesla not even making the top 10 in terms on number of vehicles produced, shipping less than 1 million cars to Toyotas over 10 million cars in the same year.
“I firmly believe the simple answer is they [Toyota] don’t want to make and sell electric cars. They are anti-EV, they have been this way for a long time, I have been covering this who scene for more than a decade, I’ve come across product managers in different countries, many people that have interviewed Toyota executives, they’re probably the most anti-electric vehicle company out there today. …….Toyota dominates the world in hybrids … and they know that electric vehicles are going to crush that, and now they’re not going to dominate once we switch to electric vehicles like they are now, so I really think that’s the bottom line. They simply know that they won’t be the best at making electric vehicles. They’ll probably make a very good electric vehicle, but they won’t dominate like they do with the hybrids, so they are trying to hold on to that technology as long as possible. “
Tom Moloughney.
The industry recognises the move to EVs will hurt Toyota, but would they be this resistant just because they will lose some market share?
Given Toyota being the market leader, the suggestion they will be unable to survive the transition to EVs could at first seem crazy. However, in some ways, being the largest volume producer, puts them in the hardest position. Between 30% of the market going to EVs and reduced revenue per vehicle, on average, existing car makers will reduce their revenues to 50% of their current level. I have a page for tracking the two leading EV makers, Tesla and BYD, and the 4 legacy automakers chasing them, and this page will track industry giant, Toyota.
Unlike other automakers GM, Ford, VW and even Stellantis, Toyota has never, at least to my knowledge, publicly stated they will at some point overtake Tesla in selling EVs.
Yet, there are also many who believe Toyota can never be dethroned as the leader, and will sometime soon introduce ground breaking EVs that take the world by storm, because their hybrids have been market leaders.
Reality is anyone else but Toyota, can plan to get aggressive and increase their market share at the expense of companies slower to adjust, enabling them to minimise any reduction in revenues. But for Toyota, there is no one big enough to for them to target stealing market share from and maintaining current market share requires technology advantages they do not bring to EVs. This would make their becoming a much smaller company inevitable. If Toyota does as well as that average, they simply become half their current size, which would still be one of the biggest companies in the industry. A concern for Toyota would be that Toyota got to be the biggest, by growing in the volume market as new player from a country at the time not known for quality cars, and then riding on being leaders in a new technology. Does that sound like China today? The concern could be that Toyota are more vulnerable than the typical company, so they could shrink even further than average.
Then there is debt.
Toyota Motor Company is the world’s most indebted corporation. That’s per a StockApps.com data analysis of the state of global corporate debt. The Site concludes that in the 2021/22 financial year, Toyota’s debt stood at $186B. That figure is $1B more than the next.
StockApps’ financial lead Edith Reads has weighed in on the data. She said, “It’s not unusual for Toyota to have such a colossal debt on its cash book; most global corporate giants do. Debt allows companies to reinvest in their businesses, growing them further. The key is keeping that debt sustainable, and Toyota has done well on that front. Being a player in a highly competitive sector, R&D constitutes a significant chunk of Toyota’s budget. That and other expansion needs make such debt a necessity.”
** So, How Does Toyota’s Debt Compare to That of Other Global Corporations?
Stockapps’ analysis shows that the top 10 most indebted companies globally accounted for 17% of net corporate debt. That’s a combined $8.1T in credit. Additionally, they are from the automotive and communication sectors.
German automaker Volkswagen (VW) is the second-largest borrower among global corporations. By the time of writing, VW’s debt stood at $ 185B.
Moreover, American communication giants AT&T and Verizon take the 3rd and 4th spots with debts of $182B and $174B, respectively.
German firm Deutsche Bank closes the top 5 with a debt of $153B.
Toyota motor’s net corporate debt 186b is highest
Debt is huge, but manageable at Toyota’s current size. In fact Toyota’s debt to equity ratio is better than VW, and while sheer size of Toyota debt, declared by several sources as the largest corporate debt in the world, the debt ratio is ok because Toyota is so large. However, the size of the debt limits how much the company can downsize, and still service that debt. Unlike some rivals, Toyota cannot afford to halve in size.
Overall there are worrying signs, but if it is this bad for Toyota, it is also bad for VW. In fact many also predict VW will fail, however instead of trying the delay the transition to EVs, VW is instead trying to become the leader. Perhaps because convincing Europe to move slower on climate is much harder than trying to convince Japan the US and the likes of Australia?
In the end, the biggest reason I have for believing Toyota does not see how it can succeed with EVs, is I cannot see another reason that Toyota to become the world’s 3rd high spender on trying to block action on climate change, than Toyota feeling, for them, climate action presents an existential crisis.
To EV or Not to EV?
Toyota And Electric: A Love Hate Relationship.
I have previously labelled Toyota the “anti-ev company“, and my first impression of their hydrogen car plans, were that Toyota only was funding hydrogen cars to delay the move to electric cars. Now I am believe it is also possible that Toyota management are applying sufficient confirmation bias to, just maybe, believe their own rhetoric.
Looking back at the history, it is clear there was a time when battery technology was just not up to the task of enabling electric vehicles to provide complete a path to zero emission vehicles. Many still question battery power for trucks, planes and shipping. However, Toyota, or at least their president Aiko Toyoda, perhaps became a victim of sunk cost bias, ready to adopt any opportune argument that would result in a delay of the adoption of electric vehicles.
Toyota Zero Emission Pioneer.
1997-2003: Rav4 EV Compliance Car .
The 1997 Rav4 EV had a 27kwh battery, and an EPA range of 95 miles or 153km. All of this sounds impressive compared to the 2010 Nissan Leaf arriving 13 years later with a range of 73 miles or 117 km from a 24kwh battery.
- The Rav4 EV was a “compliance car” produced at a loss in very limited numbers.
- The 1st Gen Rav4 EV was very slow, 18s 0-60mph, only achieved the range by being slow, and was very slow to recharge.
- Toyota’s other ‘compliance‘ zero emission vehicle, a hydrogen car, had far better range, better performance, and was faster to recharge, possibly a major reason for Toyota adopting a Hybrid and Hydrogen strategy.
1999-2021: Hybrid And Hydrogen Strategy.
The Toyota Prius, launched in 1997 in Japan by 2001 in the US and other international markets, gave Toyota a positive reputation with environmentalists, and those who wanted to be seen as environmentally responsible.
Ever since, Toyota has focused on hybrids for today, and hydrogen for “one day” as the company plan. Even plug-in hybrids have not been endorse by Toyota with “charge by gasoline” hybrids, that Toyota cleverly/cynically markets as “self charging hybrids”.
By around 2017, the lustre from the Prius had stated to wane as it became clear in in true green credential, Toyota was lagging behind.
The Hybrid Addiction.
Labour can be cut from 30 hours building cars with processes designed around internal combustion engines, to 10 hours for an EV. Toyota is master of building hybrids, which have the complexity of both powertrains one vehicle, Is any wonder why Toyota spent so many dollars advocating hybrids as a greener solution than moving asway from fuels?
Climate Pariah.
A log of the Toyota ‘anti climate action’ stance.
Despite the association of Toyota and the Toyota Prius hybrid with its history of having been championed as environmentally friendly, Toyota has a chequered history with electrification that includes:
- 2022 September: Greenpeace “The Toyota Files: Stalling on Climate Action”
- 2022 June: “TOKYO, June 24 (Reuters) – Toyota Motor Corp’s (7203.T) chief lobbied the Japanese government to make clear it supported hybrid vehicles as much as battery electrics or face losing the auto industry’s support, a senior lawmaker told a ruling party meeting.”
- 2021 November: Started an alliance for the continued production of internal combustion engines.
- 2021: November: Identified 3rd worst of all companies for the environment, only surpassed by Exxon oil and Chevron oil.
- 2021 November: Has been declared the worst automaker in the world by Greenpeace with respect to green vehicles.
- 2021 September: Repeatedly predicted EVs would lead to huge job losses in Japan.
- 2021 September: Environmental, health, auto groups urge Toyota to stop opposing Biden’s push for more electric vehicles
- 2021 March: Lobbied against electric vehicles (report March 2021)
- 2021 Jan: Were among the largest donors to Republicans denouncing the 2020 election.
- This was because those candidates are also pro ‘big oil’, and this led to calls for boycotts of Toyota.
- Claimed Electric Vehicles would mean the end of the Japanese car industry.
- Toyoda was already on the record opposing that potential ban and in 2020 told the Japanese Automobile Manufacturers Association (JAMA) that, “the current business model of the car industry is going to collapse” if legislators phased out gasoline cars too rapidly.
Toyota: No3 Worldwide In Companies Negatively Influencing Climate Action.
Toyota Motor has campaigned against proposed regulations globally to phase out internal combustion engines in favor of electric vehicles in 2020-21 and ranks 3rd on InfluenceMap’s list of global companies most negatively influencing Paris-aligned climate policy. It is joined by BMW (18th), Daimler (24th) and Hyundai (25th) from the automotive sector, which as a group is highly negative on stringent climate regulation on the automotive sector.
The 50 Most Influential Companies and Industry Associations Blocking Climate Policy Action Globally

Only the largest American Oil companies block Toyota from 1st place. Toyota, currently the largest, and richest, manufacturer of internal combustion vehicles, sees electric vehicles as a significant threat. While hybrids increase car complexity and cost, battery electric vehicles remove the most complex parts of a car, the internal combustion engine, gear box and cooling systems. While you might think governments would not force consumers to buy more expensive cars as EV prices inevitably fall, Toyota in Japan has a government that already forces consumers to keep buying new cars in a planned obsolesce program to support the automobile industry.
Despite the seemingly environmentally friendly although complicated and expensive for the performance Prius, Toyota has been the only brand in the US to increase average fuel consumption of its fleet.

Toyota is so concerned about the job loses in Japan from the move to electric vehicles that it has even formed “team Japan” to help keep the combustion engine alive. See “Toyota: The Anti-Electric Vehicle Company” for more, but Toyota is calling out that progress is bad for corporate profits and lowering prices is bad for economic activity. EVs can be built with 1/3 of the labour hours of building an ICE vehicle or hybrid, and Toyota argues that would be disaster for jobs in Japan.
A Toyota EV Comeback?
Toyota Electric History: EV Pioneer To Laggard, And Back?
Fans of Toyota can point to the fact that sales of their ICEVs outside their largest market of China are still strong and the low Yen ensures profits will continue until the right moment when Toyota stuns the world with new EVs. That is of course if the world fails to see that Toyota had the right idea with hydrogen.
In fact, there seem to have been some evidence of EV epiphanies at Toyota.
From June 2023: EVs that will make even their own hybrids obsolete within 3 years.
Strangely, despite lead times of two years on many of their current vehicles, Toyota announcing the arrival within 3 years of vehicles that will be far more compelling than not only competitors’ vehicles, but also all of Toyota’s current models, has not created the “Osborne effect” where everyone delays purchasing until the newly announced offerings are available.
Are the announcements by Toyota real? If they are, then this will change the industry, and be the death of ICE vehicles. Yet even with the low-cost high range EVs Toyota promises, they plan only to sell 1.7 million by 2030, which is not many for a company selling 10 million vehicles per year, and as opposed to putting then on par with Tesla, will only be around the same number Tesla sells in 2033. Between these low-cost long-range batteries and adopting Giga casting etc, Toyota should be more competitive with EVs. In fact, so competive, it makes no sense they would be able to keep selling their current ICEVs and hybrids.
The context and announcements.
Toyota has been under constant fire from environmentalists and shareholders in the previous 12 months because of its feet-dragging approach to the electrification of its lineup. But now it’s fighting back with an ambitious plan that envisions EVs with over 600 miles (965 kilometers) of range from 2026 and around 900 miles (1,448 km) on a single charge after 2028.
Toyota’s Newly Revealed EV Plans Include 900-Mile Batteries
Plus, the Totyota technology will cut the prices of EVs!
TOKYO — Toyota will introduce high-performance, solid-state batteries and other technologies to improve the driving range beyond 600 miles and cut costs of future electric vehicles (EVs), the automaker said on Tuesday, a strategic pivot that sent its shares higher.
Toyota unveils electric roadmap that includes 600-mile range EVs, solid-state tech.
Could announcements be motivated more by shareholder pressure?
Toyota is facing a revolt from shareholders at its annual general meeting this week from investors demanding that it go electric, and that the company make board changes and disclose its lobbying against progressive climate policies.
Among those in the firing line is former CEO Akio Toyoda, who shareholders are trying to vote off the board because of his failure to transition the world’s largest automaker to electric vehicles.
The world’s largest automaker has been a global laggard on EVs. Last year just 0.2 per cent of Toyota’s total production were fully electric vehicles and the company has been accused of lobbying governments around the world to water down pro-EV policies.
Time to go electric: Toyota faces shareholder revolt and calls for board shakeup.
Toyota is no stranger to innovation but is very late to the EV party and it knows it. Desperately trying to make up for the lost time, the Japanese automobile giant has some ambitious plans up its sleeves for its upcoming electric vehicle line-up. From lofty promises of 800 km range by 2026 to groundbreaking strides in solid-state battery tech, Toyota is setting the stage for the future of EVs.
2023 Sept 15, ArenaEV: Toyota teases ambitious new battery tech
2023 Sept 15, InsideEVs: Toyota Details Next-Gen EV Batteries, Promises 497-Mile Range In 2026
From December 2021: An Electric Epiphany?
Then articles started to appear suggesting Toyota was trying to get serious about electric cars.
“Two million is a huge number and now we’re saying 3.5 million as a baseline, but people will still say [it’s only] 3.5 million out of 10 million annually.”
Toyota CEO: December 2021.
So the latest prediction is 3.5 million cars per year by 2030. Critics suggest that means Toyota is sill planning to sell 6.5 million non-ev cars, and that will lead ot big losses.
While ramping up production does take years, as does fully converting factories and securing battery supplies, at this time 2030 is 8 years away and there is time to further increase that target. Of course, given all the competition, where something has to give as far as market share, if is very likely that Totyota could drop back to 5 million cars per year annually from the current 10 million per year, if it fails to pull a rabbit out of its hat.
It has been suggested Toyota has ground breaking solid state batteries, just waiting in the wings to be released any time from 2022, through to 2025, that revolutionise the industry. However, many reports say these batteries will first exist in hybrids, which remain Toyota’s favourite solution.
Toyota is one of the most difficult car makers in terms of predictions their next steps. Currently Toyota claim production reduction is due to semi-conductor shortages, but with several key markets such as Europe and China already around 25% EVs, it is hard to see how Toyota, with no current EV products, can avoid a drop in sales. That said, hybrids are on the rise, so in the shorter term, Toyota could benefit.
In October 2022, several sources reported that Toyota has realised that its current EV platform, will not allow for building price competitive EVs:
Toyota is considering a reboot of its electric-car strategy to better compete in a booming market it has been slow to enter, and has halted some work on existing EV projects, four people with knowledge of the still-developing plans said.
The proposals under review, if adopted, would amount to a dramatic shift for Toyota and rewrite the $38-billion EV rollout plan the Japanese automaker announced last year to better compete with the likes of Tesla.
A working group within Toyota has been charged with outlining plans by early next year for improvements to its existing EV platform or for a new architecture, the four individuals said.
In the meantime, Toyota has suspended work on some of the 30 EV projects announced in December, which according to the sources and a document reviewed by Reuters include the Toyota Compact Cruiser crossover and the battery-electric Crown.
Toyota scrambling behind the scenes to reboot EV strategy
I suspect Toyota will lose more than 50% of their current volumes by 2030, and perhaps little more than the projected 3.5 million cars will need to be produced by 2030.
- 2022 Oct 24: Toyota scrambling behind the scenes to reboot EV strategy
- 2022 Sept: Toyota president calls meeting California zero-emissions requirements ‘difficult’
- 2022 June:
- Shareholders at Toyota investment meeting asked asked “Toyota to refrain from lobbying to undermine the transition to battery electric vehicles“. “Toyota used the pretext of customer choices to avoid answering the question about lobbying activities … to slow the transition towards fossil-fuel-free cars,” AkademikerPension said in a statement after the AGM.
- G7 meeting to discuss move away from fossil fuels.
- 2022 May: Financial Times Future of the Car Event
- 2022 April
- BZ4X US pricing announced (not particularly competitive, but there are not many to sell anyway)
- BMW Joins Toyota in denouncing a fully electric future
- 2022 March:
- Toyota BZ3/4, some say largely engineered by BYD, is set to release late 2022.
- BZ3/4 release only China at this time
- 2021 December (revealing the epiphany):
- 2021 April: Shanghai Auto show (pre-epiphany):
- Announce the first electric Toyota, the BZ4X, to be launched mid 2022.
- 70 “electrified” new models, 15 of them fully electric by 2025.
- 2021 March: After California’s two senators urged Joe Biden to set a date for phasing out combustion-engined “new cars and passenger trucks,” Toyota decided to fight back at the U.S. Senate.
Toyota EVs: Finally?
BZ4x: 2022.
The first real, ground up EV from Toyota, released in 2022, and created in collaboration with Subaru.
Despite being recalled because the wheels literally fell off, reviews are mixed between:
- mediocre at best: “the verge” , “clean technica” and another “clean technica(but this time referencing the verge review)”
- not suitable for use other than just around town: “EV Pulse“, “out of spec” and “EV Pulse again”
- and
- not bad: by “out of spec” and “carwow“.
One key point. The “not bad” tests seemed to not include testing charging. They still rate the cars stated charging speed as low but seem to miss how far below the 100kW stated charging capability people who charged the car discovered. On the spec, the charge should charge faster then a Nissan Leaf, Chevrolet Bolt or even BYD Atto 3. On tests so far, it is not even close to those cars. Note the slowest charging speeds apply to a battery not installed on European cars. But with the battery in the AWD model in the US, a full charge takes hours even on a rapid charger. Maybe 4hrs on 350kW charger, but 7hrs one a 50kW charger.
While there are other niggles, the main problem is slow rapid DC charging, which is reported to take one hour to 80%. Out of spec reviews for this car the slowest charging car he had ever tested by a very large margin. Despite a peak rate of charge stated as 100kW, out of spec found while charging from empty started ok, by 40%, the rate on a xxkW charger had dropped to less than 50kW. and
No one is “blown away” and clearly this vehicle is not going to really shake up the car market, but if Toyota decide to try, and especially if software can fix the charging, they could sell in real numbers. While at this time it is too early to say what level of sales Toyota is even targeting, I will update once there is data.
November 2022: The BZ4x range scandal from Norway.
Tests in Norway have called into question the usable battery capacity and range of the BZ4x. The article in Norwegian is available here, and it can be translated with google translate, but be aware the term ‘mile’ as used in the article refers to the “Scandinavian Mile“, which is 10 km, and thus over 6x longer than the US or UK mile.
The test results are called scandalous as, on basis of their test car, data so far, the specifications of the BZ4x have been deliberately misstated to make the car appear to have significantly more range than it has in reality.
Elbil24 has on several occasions spoken to those who have created the Toyota bZ4X. It was before we had done this test, but in December the undersigned is going to Brussels to talk to several of them again. Then the test results and experiences will naturally become a topic.
In other words, the saga of bZ4X is not over, so hang in there.
Translated text from ELBIL24.
UPDATE: Toyota Norway is aware of the content of the case, and has promised to get back to us as soon as they have taken up the content with Toyota Motor Europe
It will be interesting to see how this is resolved.
BZ3: 2023.
In fact, the BZ3 may even be released December 2022, but realistically, it will reach markets in 2023. This time the car will basically be a BYD under the skin. Outsourcing to the world’s largest maker of vehicles with a power point (as of mid 2022) can’t hurt. More information here.
Tracking: 2023 and beyond.
2023 April: Toyota partners with Exxon Mobile.
The formula for fossil fuels is simple: they are hydrocarbons, made from molecules build from hydrogen and carbon and when burnt, the result is water vapour and CO2.
Although water vapour is also a greenhouse gas, leaving that aside, the higher the ration of hydrogen to carbon in the fuel, the less CO2 emissions.
This means the cleanest possible such fuels would be hydrogen, and methane (CH4), with octane (C8H18) being 30% carbon by number of atoms, up from the 20% in methane.
The press release says these fuels can work with current vehicles. Hydrogen is not a solution for current vehicles and is discussed thoroughly elsewhere anyway. Methane, also known as natural gas, is not viable as a replacement for current engines, plus even methane would not result in the claimed 75% potential reductions in “carbon” emissions.
So how can they gain these reductions? The clue could be the mention of ethanol. Ethanol (C2H6O) at 33% carbon by number of atoms, does not reduce the presence of CO2 in emissions, but if the ethanol is from crops rather than fossil fuels, then it can be considered “green” methanol with a low carbon footprint.
In the end, the clue seems to be “up to 75%” which allows for any reduction between zero and 75%, and only rules out more than 75%. While it is possible that together they have solved sourcing biomethane for the production of low footprint ethanol, which of itself would solve even bigger problems with the world’s natural gas supplies, it seems most likely that this is 2 of the 3 companies spending most on campaigns to stop action on climate change with a new PR excesize. There is no science to suggest these argets are possible.
Links to the story:
- ExxonMobil and Toyota Team Up to Test Fuels with a Lower Carbon Footprint (Toyota video)
- ExxonMobil and Toyota Team Up to Test Fuels with a Lower Carbon Footprint (Toyota PDF)
- Toyota, Exxon test low-carbon fuels in gasoline engines (Autonews)
- Exxon and Toyota Test Low-Carbon Fuels in Gasoline Engines (Bloomberg)
- ExxonMobil and Toyota to test fuels with lower carbon footprint (Fuels and Lubes)
Note: Toyota claims in their video that transport energy demand will grow by 30% by 2050. Give that given the energy efficiency of electric powertrains is 3x greater than internal combustion engines, it really seems Toyota is declaring there will be transition to electric powertrains by 2050.
2023 January Update: New CEO, but despite Toyota claims, there is enough lithium.
Toyota lost ground in plugin vehicles sales in 2022: Toyota Plug-In Car Sales Decreased By A Third In 2022 in USA
But managed to hold their position as the world’s largest carmaker and while they did not grow sales, they did not lose much either: Toyota remains world’s biggest car brand, 2022 global sales down 0.1%.
So, it might seem no need to panic, in a year when many automakers went backwards.
But compared to Tesla and BYD, the giants of EVs, Toyota results looked far less impressive. Tesla sales grew 40% in 2022, which makes -0.1% look less impressive. Then consider BYD, who the Economist suggests Toyota are even more worried about, who grew their plugin (NEV) sales by 208% in 2022 and BYD battery electric sales grew by 184% year-on-year in 2022.
But it gets worse, as it is not just unit sales growth, but profit per vehicle where Toyota is falling behind.
NAGOYA — Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.
Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen — the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar.
Toyota’s decline stemmed in part from extraordinary factors. The automaker is currently shouldering increased material and electricity costs for its suppliers. Higher materials costs, including such assistance to suppliers, pushed down quarterly operating profit by 450 billion yen ($3.07 billion), which was only partially offset by a 370 billion yen boost from a weak yen.
Tesla earns 8 times more profit than Toyota per car
BYD is also making huge strides in terms of profitability, with an over fivefold increase in annual profit, with a Q4 profit increase of over tenfold, which if maintained over the next year, would put them ahead of Toyota in profitability.
Toyota is getting left behind.
There have been announcements of “Toyota Is Finally Shifting Its EV Strategy To Rival Tesla And BYD“, but how can Toyota compete in EVs?
Toyota recognises that their current EV platform cannot compete with companies like Tesla and BYD:
One of the last straws seem to be a statement from Toyota CEO that consumers do not want EVs and the “silent majority” just want to stay with internal combustion engine vehicles, despite EV market shares rising globally.
What followed was Aiko Toyoda, Toyota CEO and grandson of the company founder Kiichiro Toyoda, stood down in late January 2023 response to criticism of Toytota, in January, but there is little evidence of real change. Just a few days later, Toyota Chief Scientist Gill Pratt was repeating the old message, to the World Economic Forum in Davos, as reported by InsideEVs:
So Toyota isn’t anti-EV, but it believes in a diversified approach and it’s predicting a global shortage of lithium, which is the most important material used in today’s lithium-ion batteries found in pure EVs, hybrids, and plug-in hybrids.
Gill Pratt and his team concluded that to lower carbon emissions as much as possible, it makes more sense to spread the limited supply of lithium among as many cars as possible, electrifying as many cars as possible.
He hypothesized a fleet of 100 internal combustion engine cars with average emissions of 250 grams of carbon dioxide per kilometre traveled. Now, assuming a limited supply of lithium, there’s only enough of it to make 100 kilowatt-hours of batteries. Toyota’s Chief Scientist says that if it were used for a single, big battery, the average emissions of the whole fleet would drop by just 1.5 g/km.
InsideEvs: Toyota Calls On Science To Tell EV-Only Extremists That They’re Wrong
While the example should be valid for a world where for some reason lithium supplies are the constraint, and neither fossil fuels, nor metals such as cobalt used in the refining of fossil fuels, would never be a constraint, this situation seems extremely unlikley and one only envisioned by those applying a lot of confirmation bias.
It is an overall stance build on some very questionable assumptions including:
- Lithium production cannot increase in response to an increased demand in the way that has happened with other, even less abundant metals.
- Batteries will from now on, always be dependent on lithium.
Lithium is a constraint, but not because the Earth doesn’t have enough lithium and supply runs out, but instead because it takes time to ramp up production. In 2019, it was estimated lithium production would increase threefold by 2025, which would be 20% annual growth, but now in 2023, it is expected to increase by 45% in just one year for over twice the annual rate of growth. That is not enough to switch all vehicle production to electric in just this year, but it is enough growth for all new vehicles released each year to be EVs using lithium batteries.
Further, not all EVs need use lithium, and there are already suggestions high volume vehicles may soon use sodium batteries. Just for perspective, CATL and BYD together produce over 50% of the worlds EV batteries.
In fact, more and more people are now predicting Toyota, and the rest of the Japanese car industry, could be headed for at least a huge downturn:
Factor 1: Japan’s economy is facing its greatest challenge since the end of WW2. Is Japan facing what the UK did at the end of WW2, having to restart almost from scratch or lose out nationally? Japan had to start over with its automotive industry whereas the UK did not. UK carmakers used pre-war engineering and manufacturing. Over the next 35 years, Japan overtook and then “crushed” the UK auto industry, including in the motorcycle field. Is Japan like the UK after WW2, stuck in a manufacturing paradigm? Possibly China does not have this heritage and is starting from scratch with EVs and vehicle manufacturing generally.
Factor 2: Japan’s economy is running on empty with its humongous and unsustainable debt level. With general government debt equivalent to 262.5% of its gross domestic product in 2021, Japan has the highest debt-to-GDP ratio in the G7, according to data from the International Monetary Fund. (Editorial note: Paul strongly believes that debt matters and does not subscribe to Modern Monetary Theory. )
Factor 3: Automotive is critical to Japan’s manufacturing sector, and without manufacturing, Japan’s economy grinds to a halt. Manufacturing is the leading employment generator in Japan, with a staggering 90% of the total employment. In this sector, the motor vehicles and parts sector accounted for a half of that. By 2020, manufacturing accounted for one fifth of Japan’s GDP.
The Climate Group warns that without a move to BEVs, Japan could lose 50% of its auto exports, more than 14% of its GDP, and almost $700 billion (80-trillion yen) in profit by 2040.
The automotive sector in Japan is the third-largest automotive producing industry in the world, with 78 factories in 22 prefectures. It employs over 5.5 million people and is a major pillar of the country’s economy . Currently, about half of domestically-produced Japanese vehicles are exported. This equates to 14% of GDP or 1.7 million jobs, or around 8% of the workforce, all amounting to a 14% drop in GDP through 2040 unless Japan goes BEV.
Is Toyota Circling The Drain? Will It Take Japan With It?
That cleantechica article adds the disclaimer “Disclaimer: This article does not claim to be prescriptive or precise. We are not experts in this arena.“, and while there are some errors, most are outside of what I quoted. The main point is that more peole are seeing the danger.
If enough people can see the danger, the surely Toyota management can also see the danger, and if there was something they could do about it, they would be taking that action.
2nd Opinions.
Updates.
- 2023 June 30 : Toyota announces EVs that will make even their own hybrids obsolete within 3 years.
- 2023 April 15th: Toyota partners with Exxon Mobile.
- 2023 May 11 th: Toyota under fire for anti-climate lobbying as protestors storm VW annual meeting
- 2023 Feb 5 : January 2023 – despite Toyota claims, there is enough lithium.
- 2022 Nov 11: The BZ4x Norway Scandal
- 2022 Oct 25: Toyota reportedly considers hitting the reset button on its EV transition
- 2022 Aug 29: Updated for the latest in the BZ4x ‘wheels fall off’ comedy, Wheels fixed.
- 2022 July 10: Updated page for conclusion Toyota cannot survive.
- 2022, July: This page was given a major overhaulb
- more info on the BZ cars to be added