Japanese automaker Toyota is playing catch up with its electric vehicle (EV) investment as it announces billions of dollars in increased spending.
- Last week Toyota announced $7.4 billion in additional EV development spending through 2030.
- The new funding brings Toyota’s total planned spending on the projects to $37 billion.
- Toyota has plans to sell 202,000 EVs in the year ending March 2024—quintupling its sales from the previous year, The Wall Street Journal reports.
- If Toyota hits this goal, it will be closer to its previous target of 1.5 million EVs shipped by 2026 and 3.5 million by 2030.
Why it’s news
Toyota offered the first large-scale EV when it unveiled the hybrid Prius nearly 25 years ago. But it has not remained on the vanguard of EVs.
Though other automakers have raced to develop lines of EVs, Toyota has been relatively slow to ramp up its production. Instead, the company has focused on building up its line of hybrid gas-electric vehicles it started offering in the 1990s.
Even with its plans to increase EV investment, Toyota still plans to sell around 3.6 million hybrids this year—more than its 2030 target for EVs.
Toyota’s habit of investing in several spaces rather than throwing all of its efforts into one sector can be traced back to its longtime president Akio Toyoda, now company chairman. New Toyota president Koji Sato is so far following his predecessor’s strategy of investing in hybrid vehicles first. These high-margin products can produce cash which can be redirected into EV investments, The Wall Street Journal reports.
EVs are growing more popular globally, likely incentivizing Toyota’s increased focus on developing the line of vehicles.
“Toyota will seek to provide optimal solutions at an accelerated pace without wavering from our multipathway approach,” Sato says.
Last month, Toyota announced that it planned to release 10 EV models by 2026. A new division within the company will focus entirely on producing EVs.
Still, Toyota Vice President Hiroki Nakajima agreed with other industry leaders, saying that EVs will continue to have low margins until batteries can be made more affordable. Toyota’s multifaceted approach will likely allow them to maintain profitability while investing in the future.