Toyota has some big changes ahead. They’ve been too slow to embrace the EV future — and investors have noticed.
It’s ironic that the manufacturer of the Prius, which is the first mass-produced vehicle to truly kick off the EV revolution, should now find itself so far behind.
But the hybrid technology that made the Prius the vanguard of EVs is also what’s held Toyota back. Hybrids are only a half-step, after all, and while they’ve offered a flexible way for consumers to dip their toe in the water, they don’t offer any of the powerful features that are driving EV sales today.
Toyota’s heir and President Akio Toyoda has announced that he’s stepping down soon — and it’s largely because of EVs. He’s famously remained skeptical about the true breadth of the EV revolution. One can hardly blame him, in some ways. Toyota’s position as the global leader also makes it the most entrenched to the old ways of doing things.
And you have to admire the man who, while a billionaire and a race car driver (Toyoda is both a Master Tester and has won many racing awards), still personally drove a Toyota Yaris in his everyday life. He designed the Yaris to be cheap, functional, and above all: efficient. He’s said for decades that Americans need to drive smaller cars if they want more efficient transportation (and has been critical of American parking lots full of trucks and SUVs).
But while I agree with Toyoda’s sentiment that small and efficient is one way to reduce consumption, the practical reality is that little cars aren’t the fix-all he claims — and certainly not today. Toyota even discontinued the Yaris in US and Canada in 2020, as it had essentially become an unloved loss-leader purchased only by drivers on a budget.
Toyoda has made the right decision to leave. He gets to walk away when Toyota is on top. He doesn’t have to do the tough work of dismantling the efficient gas-based manufacturing he’s spent his life building. That job falls to incoming Koji Sato, who has pledged to retool Toyota to produce millions of EVs. Though it remains to be seen if this will be enough, as even Sato has stopped short of full electrification.
But already that tune is changing. Even in the past month, Toyota has shifted their press releases and their advertising toward their EV lineup… and away from their mainstay. Will it be enough?
As slow and stodgy as Detroit has been, it was actually much easier for them to embrace the change, since they've been fighting for market share with Seoul and Tokyo for 30 years now. And while Europe and China have higher adoption levels, the wheels of innovation are turning faster here in the states.
America is quickly becoming the champion of the electric car.