Toyota CEO Akio Toyoda talks about EV scepticism, the ‘happy dance’ and his legacy

Toyota CEO Akio Toyoda speaks during a small media roundtable on September 29, 2022 in Las Vegas.

Toyota

LAS VEGAS — Toyota Motor CEO Akio Toyoda said simply last week what he would like his legacy to be: “I love cars.”

How well the 66-year-old racer, car enthusiast and company scion will be remembered when it comes to his approach to all-electric vehicles versus gasoline-powered performance cars, like the Supra, or hybrids, like the The once revolutionary Prius will play for years to come.

Toyota, the world’s largest automaker, plans to invest $70 billion in electrified vehicles over the next nine years. Half of this amount will be for all-electric batteries. While this is a substantial investment in electric vehicles, it’s smaller than some rivals’ plans, and not as much as some would like given Toyota’s global footprint.

Despite criticism from some investors and environmental groups, Toyoda doubled down on its strategy last week to continue investing in a range of electrified vehicles, as opposed to rivals such as Volkswagen and General Motors, which have said they will go all out. . electric vehicles.

The plans could arguably cement Toyoda’s “I love cars” legacy or tarnish it, depending on how quickly drivers adopt electric vehicles.

“For me, playing to win also means doing things differently. Doing things that others may question, but which we think will put us in the winner’s circle the longest,” he said. Wednesday at the annual Toyota dealer meeting in Las Vegas, which, by the way, was called “Play to Win”.

Akio Toyoda with the new Toyota Supra

Paul Eisenstein | CNBC

Toyoda, who described Toyota as a department store, said the company’s goal “remains the same, to please the widest possible range of customers with the widest possible range of powertrains”. These powertrains will include hybrids and plug-in hybrids like the Prius, hydrogen fuel cell vehicles like the Mirai, and 15 all-electric battery models by 2025.

Besides electric vehicle plans, Toyoda discussed several other aspects of the company’s business last week during the dealer meeting and a small roundtable with US media.

Regulations and materials for electric vehicles

Toyoda reiterated that he doesn’t believe all-electric vehicles will be adopted as quickly as political regulators and competitors believe, for a variety of reasons. He cited lack of infrastructure, pricing and how customer choices vary from region to region as examples of possible barriers.

He thinks it will be “difficult” to meet recent regulations that call for a ban on traditional internal combustion engine vehicles by 2035, as California and New York have announced they will adopt.

“Just like the free, self-driving cars we’re all supposed to be driving now, electric vehicles are going to take longer to become mainstream than the media would have us believe,” Toyoda said in a recording of dealer remarks shown to reporters. . . “In the meantime, you have plenty of options for customers.”

Toyoda also believes there will be huge shortages of battery-grade lithium and nickel over the next five to ten years, leading to production and supply chain issues.

Carbon neutral

Toyota’s goal is carbon neutrality by 2050, and not just through all-electric vehicles. Some have questioned the environmental impact of electric vehicles when considering raw material extraction and overall vehicle production.

Since the launch of the Prius in 1997, Toyota claims to have sold more than 20 million electrified vehicles worldwide. The company says these sales avoided 160 million tonnes of CO2 emissions, equivalent to the impact of 5.5 million fully electric battery vehicles.

“Toyota can produce eight 40-mile plug-in hybrids for every 320-mile battery electric vehicle and save up to eight times the carbon emitted into the atmosphere,” according to remarks prepared for Toyoda provided to media.

Toyota’s reluctance to launch all-electric vehicles has been criticized by environmental groups such as the Sierra Club and Greenpeace, which have placed the Japanese automaker at the bottom of auto industry decarbonization rankings for the past two years.

Paw stand with the dealers

Toyota has no plans to overhaul its franchise dealership network as it invests in electrified vehicles, as some rivals have announced.

“I know you’re worried about the future. I know you’re worried about how this business will change. Although I can’t predict the future, I can promise you this: you, me, us, this business, this franchise model is It’s not going anywhere. It’s staying as is,” he told dealers to thunderous applause.

The franchise dealership model came under pressure after Tesla and new electric vehicle startups began selling directly to consumers rather than through traditional dealerships.

GM has offered buyouts to Buick and Cadillac dealerships that don’t want to invest in electric vehicles, while Ford announced last month that dealerships wishing to sell electric vehicles must be certified under one of two programs, with investments of $500,000 or $1.2 million.

‘Happy Dance’

In light-hearted and comedic comments to dealers, Toyoda said he danced when the automaker overtook GM last year for the very first time in the United States.

Although Toyota executives said the accomplishment was not sustainable – GM led through the first half of this year – Toyoda still felt it was cause for celebration.

“At Toyota, we like to keep our heads down and not talk about our success,” Toyoda said before re-enacting the dance on stage. “But when I heard you became number 1 in the United States last year, I actually did a happy little dance in my office.”

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