Toyota to Promote Shift from Gasoline-Powered Cars to Hybrid, EV – CEO, Koji Sato

Toyota Motor will accelerate its decarbonization drive to cut the amount of carbon dioxide emissions per new car sold around the world by more than 50% from the 2019 level by 2035, President and CEO Koji Sato said.

Toyota will promote a shift from gasoline-powered cars to hybrid vehicles, electric vehicles and others, Sato said during a recent joint interview by news organizations.

"We will pursue a shift to automotive electrification in our 'multi-pathway' approach by taking regional conditions into account," he said. "Top priority is the reduction of CO2 emissions. EVs and others are tools for the goal. Means of achieving it change depending on the situation."

Toyota heads the world's largest auto group, selling 10.48 million vehicles globally in 2022 and capturing an estimated 13% share of the world market.

Forecasting that the growth of auto markets will stall in developed countries, Toyota will promote EVs, plug-in HVs and fuel cell vehicles there. In emerging markets, it will seek to raise the sales ratio of HVs in expectation of an increase in demand.

Toyota set the CO2 reduction target based on the "Well-to-Wheel" standards. Although EVs do not emit CO2 when running, some of them use electricity generated using fossil fuels.

The standards include CO2 generated in production of fuels. As the use of non-fossil fuels cannot be achieved by Toyota alone, the automaker will support society-wide efforts to speed up the introduction of renewable energy sources.

Toyota has been striving to reduce emissions of CO2 by more than 33% from the 2019 level by 2030 to contribute to Japan's commitment to "carbon neutrality" -- reducing its greenhouse-gas emissions to "net zero" by 2050. Sato decided that Toyota should further accelerate its efforts by setting an interim target before 2050.

The new target envisions efforts in entire supply chains, involving reduction efforts at the stages of production, logistics and other operations. In addition, Toyota will promote the use of renewable and hydrogen energy sources at its factories.

Amid growing calls for decarbonization, automakers are adopting reduction targets for CO2 emissions. By 2050, Nissan Motor is attempting to cut CO2 emissions per new car by 90% compared to 2000. General Motors intends to reduce the amount of emissions from all of its products and business activities around the world to net zero by 2040.

A shift to EVs is gathering steam in developed nations against the backdrop of toughening environmental regulations. Toyota, which is seen as a laggard in the competition for the development of EVs, announced a plan on April 7 to increase global EV sales to 1.5 million units a year by 2026, representing an interim point for its goal of boosting annual sales to 3.5 million by 2030. Although the midterm target spells an increase of more than 60 times from 2022, Sato said, "we can implement it for sure."

The administration of U.S. President Joe Biden decided that more than half of new vehicles sold in the U.S. should be electric ones by 2030. With Toyota relying on the U.S. market for one-fifth of auto sales, Sato said, "we are aware that the U.S. is toughening regulations. We are pushing ahead with our strategy while confirming that it is not very detached from them. We will also deal with automotive electrification."

Toyota has already announced a plan to launch EV production in the U.S. possibly in 2025. On details of the plan such as the volume of production, Sato said, "We are not at the stage of discussing them."

April 24, 2023