It’s too early to say whether Toyoda will have the last laugh he so richly deserves.
A little over a year ago, Toyota’s CEO, Akio Toyoda, was (sort of) squeezed out (he became the company’s chairman and is clearly still highly influential), at least in part (it appears) for being insufficiently enthusiastic about a one-size-fits-all approach to the electrification of the automobile.
I wrote about Toyoda’s (very Japanese) “demotion” here.
Toyoda was, critics (including ESG “investors”) insisted, foolish to insist that hybrids — a type of car pioneered by Toyota, at least commercially: The first was designed by Ferdinand Porsche in 1900 — had anything more to contribute to motoring’s glorious electric future.
Here’s Peter Johnson, writing for Electrek in January 2023:
Toyoda . . . has been one of the most outspoken critics of going all in on electric vehicles [EVs] despite the rest of the industry moving forward.
Instead, he has continuously stood by his hybrid approach, which includes hybrid, fuel-cell, and even gas vehicles. Toyota’s most highly anticipated release last year was its 5th generation Prius, which, despite the additional all-electric range, is “becoming the best CD player in a world moving to iPhones.”
“Even gas vehicles.”
Bring the smelling salts!
Adding to Toyoda’s (supposed) ignominy, Toyota appeared on a list of the “most negative and influential companies on climate policy” in 2022 alongside (oh, the horror) oil companies.
Toyoda’s wrongthink was (more horror) infectious. Here’s Jack Hollis, executive vice president of sales at Toyota Motor North America, speaking in August 2022 on “pure” EVs:
“I don’t think the market is ready. I don’t think the infrastructure is ready. And even if you were ready to purchase one, and if you could afford it . . . [the prices are] still too high,” Hollis told listeners.
Madness!
Writing for Electrek in August 2022, Jameson Dow was appalled that Hollis, “whose company currently sells no [“pure” EVs] in the United States, thinks he knows better than governments, the public, and companies that actually produce EVs.”
For shame!
In January 2023, Electrek‘s Johnson noted that other car manufacturers have been “taking jabs at Toyota.” He quoted EV maker Polestar’s head of sustainability, Fredricka Klaren:
“It’s not possible. We cannot continue using fossil fuels,” Klaren responded when asked questions about Toyota’s stance that EVs are not the only way to reduce emissions.
Eleven months later, here’s James Titcomb, writing in the Daily Telegraph on February 2:
To hear him speak, you would think Volvo Cars’ Scottish chief executive Jim Rowan is very much an electric vehicle crusader.
Standing beside the company’s new EX30 as he unveiled the Swedish carmaker’s full-year results on Thursday, Rowan said Volvo was leading “a paradigm shift for us and for our entire industry”, boasting that only Tesla had stronger profit margins on sales of electric cars.
But that enthusiasm apparently no longer extends to Polestar, Volvo’s dedicated electric marque.
On Thursday, Volvo said it would no longer provide financial support to Polestar and would look at offloading some of its 48pc stake in the company to other shareholders, including China’s Geely. (Most of the rest of Polestar is already owned by Geely chairman Eric Li.)
The news is the latest blow to Polestar, an early mover in electric cars that has struggled to keep up with premium rivals such as Tesla and which remains heavily loss-making despite its cars receiving critical acclaim.
It is also the latest rupture in the electric vehicle industry. . . .
A month later, the Telegraph’s Matt Oliver was reporting that Polestar’s CEO was blaming, uh, non-customers for his company’s woes:
“I see far too many people . . . being scared of change. That is just not a good recipe for the future.”
One common characteristic of central planning is the failure of central planners (or those carrying out their wishes) to anticipate what people actually want. A second is that the planners then tend to react to that failure by explaining that the people — a primitive, sometimes selfish (Kulaks!) lot — simply do not know what is good for themselves and/or society.
And so, a little over a year ago, here’s Polestar’s head of sustainability:
From our standpoint, our climate strategy is based on the IPCC (Intergovernmental Panel on Climate Change). It’s a top-down approach. We’ve said that we need to be climate neutral by 2040 as a company and we need to halve emissions by 2030, and that’s not what we can do – that is what the climate scientists are telling us we need to do as companies. [Emphasis added.]
And, for that matter, what “we” need to do as consumers.
And if “we” don’t do what’s expected of us, then the problem “we” pose will (in the typical central-planning model) ultimately be resolved by coercion. Thus state authorities in an increasing number of jurisdictions are putting in place laws and regulations designed to eliminate the sale of new conventional cars within a number of years.
Koji Sato, Toyoda’s replacement as CEO, undertook to accelerate Toyota’s shift to electrification. The changes at Toyota followed an increased commitment to EVs by Honda, which wanted, it said, to be “even more recognized as a company society wants to exist in the electrified era,” a revealing choice of words from a business supposedly dedicated to the preferences of its customers rather than those (allegedly) of “society.”
So, a year later, how is poor, behind-the-times Toyota faring? Well, it is investing more in EVs, but they still only account for around 1 percent of the company’s sales. However, in a blow to the authorized EV narrative, The Wall Street Journal reported on February 6 that:
Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.
Toyota on Tuesday forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.
Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.
Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.
Oh.
And:
Recent market dynamics appear to have cemented Toyota’s resolve to push hybrids.
Speaking to business leaders in Japan this year, Toyota Chairman Akio Toyoda said he expected EVs in the future to reach at most a 30% market share, with the rest going to other types of cars including hybrids and hydrogen-powered vehicles.
Oh yes:
Executives at Japanese automakers that are strong in hybrids, including Toyota and Honda, say they are skeptical of competitors’ ability to catch up quickly. They observe that it took some two decades for Japanese carmakers to bring their hybrids to profit-margin parity with purely gasoline-powered vehicles.
It’s too early to say whether Toyoda will have the last laugh he so richly deserves. But it is clear that hybrids’ inconvenient flourishing is going to add yet more complication to the political, economic, and commercial melee about to erupt over the future of the automobile.