About two decades ago, Toyota Motor with its Prius hybrid, an “electrified” vehicle that was among the cleanest and most fuel-efficient vehicles ever made, it became the automaker of choice for American environmentalists and environmentally conscious consumers.
Amid rising gas prices, demand for the vehicle grew and inspired other automakers to launch a litany of hybrid models. Prius vehicles, including the plug-in hybrid electric model, remain among America’s lowest fuel- and gas-guzzling cars.
But as the auto industry transitions to a battery-powered future, the Japanese automaker has fallen out of favor with some of its once-core supporters due, ironically, to Prius and Toyota’s reluctance to invest in pure electric vehicles.
“The fact is: Hybrids are not green technology today. The hybrid Prius runs on the pollution-emitting combustion engine found in every gas-powered car,” wrote Katherine García, director of the Sierra Club’s Clean Transportation for All campaign. recent blog post.
Greenpeace last week ranked Toyota last study of 10 carmakers’ decarbonisation efforts, citing slow progress in their supply chain and sales of zero-emission vehicles such as electric cars, which accounted for less than 1% of total sales.
While car companies such as General Motors, Volkswagen AG and others have vowed to invest billions of dollars in recent years to develop fully electric vehicles that don’t require gas-powered engines like the Prius, Toyota has lagged behind, only recently announcing similar investments. It also continues to invest in a portfolio of “electrified” vehicles – from traditional hybrids like the Prius to its recently introduced, yet stunning, bZ4X electric crossover.
The strategy has put the world’s biggest carmaker at odds with many of its rivals and raised questions about its commitment to a sustainable way forward for the industry, despite the company’s goals to be carbon neutral by 2050.
Toyota is not alone in similar plans. Stellantis, Ford and other Japanese automakers are similarly investing in electrified hybrid models. But in the hands of the patriarch of mainstream hybrids, the conservative approach to EVs is remarkable.
Toyota management while increasing investment in purely electric vehiclesThey argue that the company’s strategy is justified – not all areas of the world will introduce EVs at the same pace due to high vehicle costs as well as a lack of infrastructure, they say.
“As much as people want to talk about electric cars, the market is not mature enough and ready … at the level we would need for mass movement,” said Jack Hollis, executive vice president of sales for Toyota Motor North. America, last month during the Automotive Press Association’s virtual meeting.
In December, Toyota announced plans to invest 4 trillion yenor about $35 billion in a lineup of 30 battery electric cars by 2030. At the same time, it continues to invest in hybrids such as the Prius and other potential alternatives to battery electric cars.
“We want to give every person a way to make the biggest contribution to solving climate change. And we know that the answer is not to treat everyone the same,” said Gill Pratt, Toyota’s chief scientist and CEO of Toyota Research. Institute, during a media event last month in Michigan.
Weeks ago, the company announced that it would devote up to $5.6 billion to manufacturing hybrid and all-electric batteries in Japan and the US to aid its previously announced plans. That may sound like a lot, but others like GM and VW exceed it.
For example, GM has set a goal of offering zero emissions exclusively, electric vehicles by 2035including its Cadillac and Buick brands by 2030. Several other automakers have made similar pledges or set goals for 50% or more of their vehicles sold in North America to be all-electric.
Toyota aims to sell 3.5 million electric vehicles per year by 2030, which would be more than a third of its current sales. Those sales include about 1 million units of the luxury Lexus brand, which plans to exclusively offer electric cars in Europe, North America and China by then.
Toyota Motor Corporation cars are seen at a briefing on the company’s battery electric vehicle strategies in Tokyo, Japan on December 14, 2021.
Kim Kyung-hoon | Reuters
Paul Waatti, manager of industry analysis at AutoPacific, believes Toyota is “definitely on the conservative side” when it comes to electric vehicles, but that’s not necessarily a bad thing for such a large automaker.
“I think they’re hedging their bets,” he said. “From a global perspective, many markets are moving at different paces. The US is slower to adopt EVs than Europe and China, but there are other markets where there is no infrastructure at all. Taking a diverse approach to powertrains makes sense for a global automaker.”
In 2021, Toyota sold 10.5 million vehicles in approximately 200 countries and regions, more than any other global automaker, including affiliates Daihatsu Motors and Hino Motors. Volkswagen – the world’s second largest carmaker – sold 8.9 million vehicles in 153 countries, and GM and its joint ventures sold 6.3 million vehicles, mainly in North America and Asia.
Toyota believes pure electric vehicles are one of them a solution, not a solution, to society’s goal of becoming carbon neutral.
“For the foreseeable future, I’m not going to invest on the assumption that battery electrics are 100% of the market. I just don’t see it,” said Jim Adler, founding director of Toyota Ventures, the carmaker’s venture capital unit. “It’s really going to be a mixed market.”
Toyota executives expect different regions of the world to adopt electric vehicles at different rates, largely based on the available energy, infrastructure and raw materials needed for batteries to power the vehicles.
2022 Toyota Mirai hydrogen fuel cell electric vehicle
In addition to hybrid and plug-in electric cars, Toyota has invested heavily in hydrogen electric vehicles with fuel cells, including the second generation of its Mirai.
Hydrogen fuel cell vehicles operate similarly to battery-powered vehicles, but are powered by electricity generated from hydrogen and oxygen, with water vapor as the only byproduct. They are filled with a nozzle almost as quickly as traditional gas and diesel vehicles.
“BEVs, fuel cells, plug-in hybrids, all those reduction tools are going to happen and they’re all important,” Hollis said.
Still, fuel cell vehicles face the same challenges as fully electric vehicles: cost, lack of infrastructure, and consumer understanding.
Toyota said so too look at e-fuels, which officials say is a climate-neutral fuel that replaces gasoline in non-electric vehicles.
And mid-range options tend to come with lower price tags.
For example, a 2022 Toyota Prius hybrid with an EPA rating of up to 56 mpg combined starts at around $25,000. That’s roughly $17,000 less than the automaker’s bZ4X all-electric crossover.
The 2023 Toyota bZ4X electric vehicle (EV) during the Washington Auto Show in Washington, DC, on Friday, January 21, 2022.
Al Drago | Bloomberg | Getty Images
Batteries in electric vehicles are extremely expensive, and prices continue to rise due to inflation and demand for materials such as lithium, cobalt and nickel, which are needed to make battery cells.
The cost of raw materials for electric cars has more than doubled during the coronavirus pandemicaccording to consultancy AlixPartners.
This makes Toyota’s hybrid strategy somewhat economical – relatively speaking. Toyota also claims that there simply aren’t enough of such minerals.
“Over the next 10 years or so, there are going to be huge disruptions in lithium supply around the world,” Pratt said. “Just look at the number of mines that need to be produced. Battery nickel is also going to have a problem because of the number of refineries that need to be paid when demand is rising so quickly.”
Metals Co.a Canadian start-up, estimates that production of battery-grade nickel, cobalt and manganese sulfate is significantly insufficient to meet US electric car goals by 2030.
The publicly traded mining company predicts that even if all projected nickel sulfate production by 2030 in the U.S. and FTA countries went to electric vehicle production, it would provide less than 60% of automakers’ EV goals in that time frame.