Toyota will make another major strategic shift in the coming months. Like Nissan, it has become a laggard in electrification, giving up the early lead given to it by the Prius hybrid 25 years ago. Now, after a series of announcements in September and December, it intends to spend 31 billion euros on batteries and electric vehicles. It’s double that of Nissan’s recent disappointing target, but still less than the $ 73 billion Volkswagen has committed to.
However, Toyota believes that it can sell 4 million pure EVs a year in 2030, double what was expected just three months earlier. It would be awesome. But that hasn’t put aside his love for hybrids. They are expected to represent another 4 million sales within nine years. Toyota is also making forays into hydrogen technology for passenger cars, although it is more suitable for large trucks and buses. The firm argues that these technologies can effectively reduce pollution; it was one of those that refused to support COP26’s commitment to stop selling gasoline cars by 2040. It has also lobbied heavily against requirements for purely electric propulsion, for example.
Its pressure appears to have paid off in Australia, of which it has 20%. The government’s strategy, presented at a Toyota headquarters, is based on the assumption that hybrids will make up the majority of electric vehicles on the country’s roads in 2030. But that would not reduce emissions too much.
Until recently, shareholders weren’t worried about it. Apart from the occasional bump, Toyota has traded between 9 and 12 times future earnings in the last decade, well ahead of its traditional rivals, as befits its market-leading pre-tax margin. Then Ford and GM, who are touting their electric bet, began to beat it, despite their much lower expected margins. That may have prompted the boss, Akio Toyoda, to spring into action.
The authors are columnists for Reuters Breakingviews. Opinions are yours. The translation, by Carlos Gómez Abajo, is the responsibility of Five days
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