Koji Sato, the incoming CEO of Toyota, is laying out the groundwork to revive Toyota’s flagging and disinterested push in battery-powered electric vehicles. Under the previous CEO, Akido Toyoda, Toyota lacked a clear and present EV vision. Ironically, Toyota was an early investor in Tesla, but a few years later pulled their investment after concluding electric vehicle technology would never take off. How wrong they were. Under Toyoda’s leadership, Toyota gave the impression that it was dragging its feet over electric vehicles preferring to use its corporate dominance to push its hybrid and fuel cell technology.
Under pressure from investors and environmental groups Toyota was forced into a corner and into a major rethink. With Toyoda ousted out as CEO, Koji Sato now takes the reigns of the 85-year-old company. Sato wasted no time in putting EVs at the forefront of Toyota’s future with Lexus as the event horizon of Toyota’s push into becoming an electric car company. Sato announced on Monday that Toyota’s next-generation EV platform is expected to arrive in 2026.
Sato also outlined three key objectives, to drastically ramp up EV production and diversify the company’s EV strategy, achieve carbon neutrality within the Asia sub-continent region and strengthen the company’s software services and digital experiences. Sitting alongside Toyota’s BEV (Battery Electric Vehicle) strategy will be the continuation of its proprietary hybrid, plug-in hybrid, and hydrogen fuel cell technologies.
Lexus will initially lead the BEV charge, which will aim to become fully electric by 2035, with a target of selling 1 million EVs by 2030. In the same period, Toyota aims to sell 3.5 million EVs. However, targets are one thing but Toyota’s current reality paints a far different picture. Presently Toyota has sold 24,000 electric vehicles. Toyota has ten Mount Fujis to climb if it is to scale its EV ambitions at such a rapid rate.
Despite knowing they will have to streamline and reform engineering research, development and manufacturing cadence to accommodate their focus on BEVs, Toyota will hit development and production issues along the way. Inevitably, with the continuing shortage of semiconductor supply, Toyota will miss their ambitious deadlines by a few years.
While Sato’s announcement appears to be a sign of controlled panic, with a new generation of management in place, Toyota has at least begun a journey it should have started 10 years ago.