Toyota has, unlike many other automakers, decided to resist the pull of devoting vast resources to the production of battery-powered electric vehicles, or BEVs. Instead, it has focused on its traditional, combustion-powered cars, and on hybrid gas-electric cars that, in many respects, offer the best of both worlds for auto buyers. That decision has paid off in a huge way for them.
In fact, Toyota has announced, as of Tuesday, February 6, that it will see a whopping $30 billion annual profit when its fiscal year ends in March. That massive profit, one that helped propel its shares nearly 50% higher over the past 12 months, is likely due, at least in part, to its decision to focus on generally well-liked hybrid and combustion-powered cars rather than BEVs.
Such is what Axios reported, noting that the expected annual profit of $30 billion “would be a record profit for the Japanese car giant, suggesting its decision to emphasize gas-hybrid vehicles, rather than fully electric models, is paying off.” Consumers do not suffer as many worries about range or the ability to fill up on power with hybrid cars as with BEVs, as the gas tank can be filled up quickly rather than taking hours to charge.
Toyota’s success comes amidst raging problems for the EV industry. Ford, for example, has been forced to slash the price of its flagship EV truck, the Ford F-150 Lightning. Because of the car’s high cost and limited range relative to the traditional, well-liked F-150, consumers were letting those trucks rot in lots and Ford tried to stimulate demand by cutting the price by $10,000. It also had to slash production of the Lightnings.
Similarly, Hertz, the car rental giant, announced that it has decided to start selling off its EV fleet and focus on combustion-powered vehicles. Explaining the decision, it noted that though it announced in 2021 that it would buy 100,000 Teslas for the rental fleet, the maintenance and repair cost on EVs is too high to be worth it.
Toyota, for its part, has remained unrepentant about its non-EV production lineup. Akio Toyoda, the Chairman of Japan’s famous Toyota Motor Corporation, said during a January of 2024 interview that the company sees the value in hybrid and combustion-powered cars, particularly for developing nations with unreliable electricity.
He said, “What Toyota has that other companies don’t have is HEV (hybrid vehicles). Thanks to the introduction of HEVs in Japan 20 to 30 years ago, Japan is the only developed country to have reduced CO2 emissions by 23%. However, no one, mainly the media, is giving us an explanation. All I hear is, “Toyota is behind in BEVs.” The important thing is not to convert to BEV or FCEV . The enemy is CO2 . So,let’s all think about reducing CO2 right away. Toyota believes that freedom of movement should never be taken away from people in any region, country, or income group.”
He continued, “No matter how much progress BEVs make, I think they will still only have a 30 % market share . Then, the remaining 70 % will be HEVs , FCEVs , and hydrogen engines. And I think engine cars will definitely remain. I think this is something that customers and the market will decide, not regulatory values or political power.”
