In his first speech as the new Toyota CEO, Koji Sato said on Friday that Toyota Motor Corporation would expand its electric vehicle line-up with ten new models and sharply increase its EV sales to 1,5 million units annually by 2026 and 3,5 million in 2030.

The company sold 24 000 EVs out of 10,48 million vehicles produced last year. That’s a very meager score when one sees that Tesla made 1,31 million full EVs last year and that direct competitor Volkswagen Group clocked off at 572 100 fully electric vehicles.

“We will do our utmost to push forward with electrification,” Sato said at his first press conference after taking the helm of the world’s largest automaker on April 1st. “We will ramp up our efforts to achieve carbon neutrality.”

“There is no doubt Toyota is lagging in the area of battery electric vehicles,” said Takaki Nakanishi, auto analyst and CEO of Nakanishi Research Institute. “The important task for Mr. Sato and his new team is ramping up its effort in BEVs.”

Accelerated electrification necessary

When the Japanese carmaker announced the appointment of Sato as new CEO, Toyoda said at a press conference that he felt too ‘old’ to address the rapidly changing business environment. New services and technologies are expected to be increasingly needed for connected, autonomous, shared, and electric vehicles (CASE).

Most analysts say EVs are the most promising technology to achieve carbon neutrality in the long term and that Toyota’s slow approach to the market could hinder its future growth.

Global EV sales are expected to surge to around 73 million vehicles in 2040 from about 2 million in 2020, making up 61% of the overall market, according to an estimate by Goldman Sachs.

The number one automaker in the world also revealed a plan to start producing all-electric sport utility vehicles in the United States in 2025 and battery-driven pickup trucks in emerging countries later this year.

All-electric models offered by Toyota until now include the bZ4X, its first mass-produced EV model, and UX300e under its upscale Lexus brand. Unfortunately, Toyota failed to get off to a smooth start recently with the botched debut of the bZ4X.

The output of its first mass-produced EV model had to be halted a few months after its rollout in May last year in Japan due to possible wheel separation.

Other options

Still, Toyota believes battery EVs are not the only solution and continues betting on the need for multiple alternatives such as hydrogen-powered fuel-cell vehicles, hybrids, and plug-in hybrids to cut carbon dioxide emissions.

“What Toyota is competing against is not rivals in China or Europe but all those governments and government policies,” Koji Endo, head of equity research at SBI Securities, said at the FCCJ’s press conference, referring to the regulatory environments of those countries.

“If the Biden administration is replaced by a (Donald) Trump one, policies in the United States are going to be completely, 180 degrees, changed again,” Endo said. Many analysts say that Toyota’s approach can better meet different requirements for each country’s emission rules.

Some countries still have to rely heavily on fossil fuel power generation in the near term, and EVs may not be the best choice in such a market. However, hybrids could be an option if customers cannot afford relatively costly EVs and Fion.

New wind

Koji Sato, the new CEO, is expected to take strong leadership as he did when he led the upscale Lexus brand division spearheading Toyota’s EV strategy. Then, he was considered the right-hand man of Akio Toyoda, the precedent CEO for 14 years, and now appointed Chairman of the Group.

In the press conference, Sato emphasized the company will be run as a team under his leadership rather than employing a management style in which a leader decides everything.

“I hope to be a president who continues to be involved in the production of cars,” Sato said, vowing to keep improving the quality of Toyota’s cars together with founding family scion Akio Toyoda.

Koji Sato: “That is why, under the new management structure, we will accelerate the taking on of challenges for the future, with a new management style of simultaneously and organically working as a team.”

“From now on, we aim to transform into a mobility company. Toyota’s mission is ‘Producing happiness for all’. We want to protect the beautiful Earth and enrich people’s lives worldwide. That is our aim as a global company. For the car to continue being a necessary part of society, we need to change the future of the car.”

“The most important message we want to convey through our mobility concept is that mobility lies beyond the future of the car. Cars lie at the center of our transformation into a mobility company. Expanding the possibilities of cars into the future,” Sato concluded.