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Toyota<\/a> was skeptical of electric vehicles back when that wasn\u2019t fashionable. In October 2022, for instance, then-CEO Akio Toyoda said<\/a> that EVs \u201care just going to take longer than the media would like us to believe.\u201d As other big carmakers made bold proclamations about when they go all electric, Toyota refused to play along, vowing instead to keep offering a wide array of powertrains and letting consumers decide for themselves.<\/p>\n \u201cThat\u2019s our strategy and we\u2019re sticking to it,\u201d he insisted, vowing to focus on hybrids, which this carmaker pioneered with the release of the Prius in Japan in 1997, and three years later in the U.S. Since then, the Japanese giant has steadily increased its hybrid offerings.<\/p>\n Toyota\u2019s stance was not a good look at the time\u2014and it didn\u2019t go over well.\u00a0<\/p>\n \u201cToyota is not correctly responding to calls from the market to take a lead in electric vehicles,\u201d Satoru Aoyama, senior director at Fitch Ratings, told<\/a> the Financial Times<\/em>, warning the carmaker could \u201close investor confidence.\u201d\u00a0<\/p>\n Environmentalists were none too pleased, either. \u201cThe fact is: a hybrid today is not green technology,\u201d blogged<\/a> Katherine Garcia, director of the Sierra Club\u2019s Clean Transportation For All campaign. \u201cThe Prius hybrid runs on a pollution-emitting combustion engine found in any gas-powered car\u2026Rather than invest in EVs, though, Toyota is putting corporate profits and the status quo over tackling the climate crisis.\u201d<\/p>\n The pressure grew so intense that, partly in response, Toyoda\u2014the grandson of the company\u2019s founder\u2014left his CEO role<\/a> to become chairman.\u00a0<\/p>\n \u201cBecause of my strong passion for cars, I am an old-fashioned person in regards to digitalization, electric vehicles, and connected cars. I cannot go beyond being a car guy, and that is my limitation,\u201d he said. \u201cThe new team can do what I can\u2019t do.\u201d\u00a0<\/p>\n But it turns out he was onto something. This week, the carmaker raised its operating profit guidance by nearly 9% for the fiscal year ending March 31, crediting higher sales of hybrid vehicles across all its major markets.\u00a0<\/p>\n That contrasted with EV leader Tesla<\/a>, which despite repeated price cuts to boost demand warned that this year\u2019s sales growth might be \u201cnotably lower\u201d than last year\u2019s. Meanwhile there are increasing signs<\/a> from carmakers and markets around the world that sales growth for electric vehicles is slowing.\u00a0<\/p>\n With hybrids alone, Toyota sold<\/a> roughly 3.4 million vehicles globally last year, up from 2.6 million in 2022. Tesla, by contrast, sold 1.8 million vehicles, all of them electric. In total, Toyota sold 11.2 million vehicles, allowing it to retain its crown as the top-selling carmaker for the fourth consecutive year.<\/p>\n EV sales in the U.S. grew an impressive 51% last year, according to Edmunds, but hybrid sales did even better, jumping 63%.\u00a0<\/p>\n \u201cWe think the market is now rethinking the potential of hybrid products, which are a strength of Toyota,\u201d Goldman Sachs<\/a> analysts wrote<\/a> in a recent research note.<\/p>\n \u201cI want to congratulate Toyota, which was attacked for saying it was never going to go all-electric and it was going to continue to make the cars people wanted to buy,\u201d said<\/a> Diana Furchtgott-Roth, director of the Center for Energy, Climate, and Environment at the Heritage Foundation, on Fox<\/a> Business.<\/p>\n For drivers, hybrids have the feel-good factor of burning less fossil fuel than normal cars\u2014friendlier on the environment and the pocketbook\u2014without the range anxiety, charging issues<\/a>, and resale value<\/a> of EVs. (Hybrids maximize efficiency by alternating from gas to battery power.) It also helps that in the U.S. hybrids are priced closer to regular vehicles than are EVs.<\/p>\n Of course, Toyota could end up on the wrong side of history if consumers shift to EVs faster than it expects. While Toyota does offer some EV models\u2014and has more in the works<\/a>\u2014they still account for just a sliver of its overall sales.\u00a0<\/p>\n In 2022, Tesla CEO Elon Musk dismissed hybrids as a phase<\/a>, saying that it\u2019s \u201ctime to move on\u201d from them. The last laugh might belong to him and, perhaps, Chinese rivals like Warren Buffett\u2013backed BYD<\/a>, which recently passed Tesla in global EV sales.<\/p>\n \u201cIf consumer adoption of BEVs shifts again and speeds up, Toyota may not be fully ready,\u201d Stephanie Brinley, an associate director at S&P Global Mobility, told<\/a> Reuters.<\/p>\n But none of that stopped Toyota\u2019s chairman from doubling down on his once-unpopular stance last month, as he estimated that EVs will peak at 30%<\/a> and share the roads with hybrid, traditional, and hydrogen-powered cars.<\/p>\n<\/div>\n\n\u2018A strength of Toyota\u2019<\/h2>\n
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