Toyota’s Electric Vehicle Transition Struggle: A Universal Reason Behind the Setback

The attempt to achieve record profits led the Japanese automaker to deviate from its original plan to sell an anticipated 202,000 electric vehicles in the current fiscal year.

Hybrid Technology Yields Record Profits

Toyota adjusted its sales projections for electric vehicles significantly for this fiscal year, reducing the initial estimates of 202,000 units to fewer than 123,000. This statement was included in the company’s financial report for the second quarter. However, it’s crucial to note that the Japanese company, being one of the top three global automakers, currently maintains a relatively modest electric vehicle portfolio.

Therefore, it’s unsurprising that Toyota, aiming to achieve record profits by the end of the current fiscal year ending on March 31, 2024, leans on combustion and hybrid models. The company had previously stated that its operating profit would reach a record equivalent of $20.1 billion. However, according to the latest financial report, the forecast has been increased to $30.5 billion.


Photo by Toyota

Financial Success for Toyota

By the end of the fiscal year, Toyota aims to sell 3.6 million traditional hybrids (compared to the initial estimate of 3.5 million), while the overall sales of electrified vehicles – the sum of electric vehicles, hybrids, plug-in hybrids, and vehicles with hydrogen fuel cells – are expected to increase to 3.9 million sales.

This figure indicates a 42% rise from the previous fiscal year. Electrified vehicles are expected to constitute approximately 37% of the company’s total sales. It’s anticipated that the Toyota and Lexus brands together will manufacture 10.1 million vehicles in the current fiscal year. In the last fiscal quarter, Toyota recorded an unusually high operating profit of 12.6%, more than double the figure from the previous year when the indicator stood at 6.1%.

Full Steam Ahead for New Models Development 

Toyota’s current portfolio includes only a handful of battery-powered cars, including the Toyota bZ4X and Lexus RZ. The Japanese manufacturer plans to introduce 10 new electric vehicles to the market by 2026, followed by semiconductor batteries a year later, allegedly offering a range of over 621 miles (approximately 1,000 km) on a full charge. Based on this information, Chief Financial Officer Yoichi Miyazaki stated that the hybrids have helped the company lay a solid financial foundation for the electric vehicles currently in development.

Similarly to Toyota, Ford and General Motors also lowered their sales and production expectations. GM abandoned its initial production goal of 400,000 units, shelved the production in one of its future battery factories, and simultaneously reduced the production targets for the Mustang Mach-E.

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