Toyota Questions Speed of EV Transition

European pension funds recently criticized Toyota’s slow approach to the transition to electric vehicles (EVs). The Japanese automaker claims that a fast transition to EVs could increase pollution if the energy is sourced from fossil fuels. Toyota instead claims that hybrid vehicles can provide a better solution during the transition period, focusing on offering a plethora of choices to its diverse customers and markets.

“Hybrids still make sense in markets where infrastructure is not ready to support a faster move to EVs,” Toyota told Automotive News Europe. The commercialization of hybrids and fuel cell vehicles positioned Toyota as a leader in the green vehicle market.

However, this argument was criticized by pension funds as many consider electrification the best bet for achieving climate neutrality. “Toyota is jeopardizing its valuable brand by lobbying against much-needed climate related regulation of the auto industry," said Anders Schelde, Chief Investment Officer, AkademikerPension, as reported by Financial Times. Toyota’s decision is alarming shareholders and raising questions about electrification.

Despite Toyota’s perspective on electrification, the automaker has committed to achieve carbon neutrality by 2050. “We will continue to promote practical and sustainable reduction in CO2 emissions by utilizing our full-lineup of electric vehicles, including PHEVs, BEVs and FCEVs, starting off from the HEV technology that we have cultivated through sales of a cumulative total of more than 17 million units over the past 20 years since 1997,” said Toyota.

The OEM has sold over 90,000 hybrid electric vehicles in Mexico, dominating 85 percent of the hybrid vehicle market, according to INEGI. Toyota’s plants in Baja California and Guanajuato are two of the most modern facilities across the world, reports the company. “Our HEV offer in the country has grown steadily. In 2010, we introduced Prius and today we have a wide HEV offer, which includes Prius. In addition to the Camry, Corolla, our superstar RAV4 and Sienna, which is now exclusively produced in its HEV version,” said Luis Lozano, President, Toyota Motor de Mexico, to MBN.

Mexico’s first hybrid vehicle, a Honda Civic, arrived in 2006. But the batteries used by these models were more expensive, so many models reused old equipment to keep costs down. This led to poor sales and limited the penetration of these vehicles into the Mexican market until Toyota’s Prius arrival in 2010.