Toyota: Diverse Electrification Options, but Slow to Embrace Electric
As the automotive industry shifts towards electrifying transportation, one of the world's leading automakers, Toyota, has attracted significant attention for its stance on electric vehicles (EVs). The Japanese automaker is one of few car manufacturers that have not made a commitment to producing exclusively battery electric vehicles.
Toyota has been caught in the middle of a heated debate regarding its approach to the future of powertrains. On one hand, the company’s emphasis on diversifying efficient powertrain options seems just, given the diverse needs and preferences of Toyota’s global customer base. On the other hand, critics argue that Toyota’s reluctance and opposition to fully embracing electric vehicles positions the company as both a hero for continuing to cater to a broader audience, and a villain for potentially hindering the transition to a greener, all-electric future.
Diverse Offerings
Toyota’s commitment to offering a wide variety of powertrain options has been a defining characteristic of a brand that has managed to be prominent in almost every country around the world. The company caters to market demands with hybrid electric vehicles, such as the Prius, fuel-efficient internal combustion engine cars, and, more recently, hydrogen fuel cell vehicles such as the Mirai among its offerings.
Toyota sees fuel cells as a complementary solution to battery-electric vehicles, particularly for larger vehicles and long-range applications. Capable of converting hydrogen and oxygen into electricity with minimal emissions, hydrogen fuel cells have been touted as “the next big thing.” They offer fast refueling, near zero emissions, high energy density, and can be produced from a variety of sources but…have yet to have a significant market impact. The main challenge is the hydrogen refueling infrastructure - currently, there are only about 165 hydrogen charging stations in the US (with 54 of those stations available in California). While there are projections for growth in demand and infrastructure, the current adoption is relatively slow.
By diversifying its product range, Toyota has been popular in markets where the charging infrastructure for electric vehicles remains underdeveloped. Consequently, this approach has given Toyota a competitive edge by catering to consumers' diverse needs while contributing to the gradual reduction of emissions through hybrid and hydrogen technologies. Nevertheless, arguably, with its stance, Toyota is hindering the global transition to electric mobility, slowing down the transition to net zero, and ultimately, slowing down efforts to combat climate change.
Toyota's primary concern regarding electric vehicles is range anxiety – the fear of running out of battery power with limited charging infrastructure. Additionally, Akio Toyoda, Toyota’s chairman, pointed out that Japan would run out of electricity quickly if all vehicles were electric and would need infrastructure costing the equivalent of $135 billion to $358 billion to support vehicle electrification.
Hence, Toyota’s approach is based on the fact that not every country or region can accommodate fully electric vehicles, so the company aims to promote sustainability by continuously improving technology and reducing emissions throughout its automobile life cycles. Toyota argues that plug-in hybrid and hydrogen vehicles might be better options in the long term. The car manufacturer went as far as showing “anti-EV” and “range anxiety" - focused marketing in an effort to promote hybrid vehicles.
Is Toyota Standing in the Way of Progress?
Toyota's hesitant approach to fully embrace all-electric vehicles has drawn criticism. As the world pushes towards a more sustainable future, the transition to zero emissions is of utmost importance. Despite having fully electric vehicles in its lineup, Toyota’s reluctance to scaling up electric vehicle operations has been seen by some as a reluctance to prioritize a sustainable, electric future to focus instead on profits.
Because of this, Toyota has ranked last in the global green car report, with 499 out of every 500 vehicles sold being powered by fossil fuels – but also certified as an White 500 Health & Productivity Management Outstanding Organization between 2018 and 2022. Furthermore, Toyota has lobbied against electric vehicle regulations in Australia, blocked clean air regulations and pressured governments to support fossil fuel-powered hybrid cars, lobbied against a 2030 phase-out on internal combustion engine vehicles in India, and threatened to leave the UK if the government banned hybrids vehicles in 2030 (among others) - showing that the company is sticking with its stance of diversification. Can this hesitation and resistance to electric vehicles potentially hinder the progress required to slow the effects of climate change?
Toyota: The Future
Maybe based on its understanding of customer needs and preferences in various regions and the different infrastructural and financial challenges and regulatory environments that markets have, Toyota is committed to offering a diversified portfolio of eco-friendly vehicles, including hybrids, plug-in hybrids, battery-electric vehicles, and fuel cell vehicles.
However, some argue that while diversification has its benefits, concentrating resources and efforts towards a single, transformative technology like electric vehicles would demonstrate a stronger commitment to environmental stewardship and a sense of corporate responsibility, should Toyota reevaluate its strategy and consider a more aggressive approach to electrification? Recent announcements suggest that it has some exciting full-electric vehicles on the horizon. Time will tell.
