Akio Toyoda
The desire to change for the better
New CEO
Toyota share price

Electric vehicles are taking up a growing share of European and American markets, and a fifth of the world's largest car market, China, already consists of electric vehicles.

Akio Toyoda

Longtime CEO Akio Toyoda called himself the spokesperson for the "silent majority" of people in the auto industry who questioned the focus on electric vehicles. In the automotive world, Toyoda is one of those who advocate slower and more prudent movement.

He argued that gasoline-electric hybrid vehicles like Toyota's Prius could be just as environmentally friendly, and said other companies were pushing consumers to switch to electric vehicles they might not be ready for without a full charging infrastructure.

The CEO has always said that he is not a skeptic about electric vehicles - he is a realist.

The desire to change for the better

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The transition is a watershed moment not only in the automotive industry, but also in the complicated green energy transition across the business world. Some companies, investors and governments are pushing for big leaps towards renewable energy and green technologies, arguing that consumers and infrastructure will keep up with the changes.

Government agencies and investors are encouraging companies to switch to electric vehicles with subsidies and tax breaks. New tax credits for electric vehicles in US law, dubbed the Inflation Reduction Act, do not apply to hybrids that are not pluggable. The European Union has mandated the sale of new zero-emission cars by 2035. The state of California will also only allow the sale of new electric vehicles, plug-in hybrids and hydrogen cell vehicles starting in 2035.

New CEO

CEO Motor Corp. Akio Toyoda, who has expressed skepticism about the future of all-electric vehicles, said he would hand over the keys to a junior director.

The change in management comes as Toyota transitions to electric, autonomous and connected cars.

Koji Sato, a 53-year-old engineer who will take over as Toyota's CEO in April, has provided some details on his plans for the world's best-selling automaker. However, his background in launching the first all-electric Lexus and working on hydrogen-powered cars allows him to face the upcoming car transformation.

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Sato said on Thursday, without giving details, that his plans for Toyota include accelerating the electrification of the automaker's lineup. Still, echoing Toyoda's position, he said that for the world to become carbon neutral by 2050, it would need more than just electric vehicles for transportation.

Toyota will be EV?

Last month, Toyoda wondered aloud how much longer he could argue for a more gradual and multifaceted approach. Two generations ago, Toyota was transforming the automotive industry with innovations such as just-in-time manufacturing and an obsession with continuous improvement. By the time Toyoda took the top job in 2009, there were signs the company was moving too fast. His quest for global dominance limited profit margins and caused some to wonder if quality was being sacrificed.

But as Tesla overtook Toyota to become the world's most valuable automaker by market capitalization, competition intensified. Currently, Toyota has several electric vehicles in showrooms, and more will appear this year. Toyota's current EV platform - the basic architecture on which various car models can be built - has been partially changed from the existing platform for gasoline-powered vehicles. Even before Toyota's first change at the top in 13 years, some changes to its EV strategy were being considered behind the scenes. The company researched rivals.

Meanwhile, Toyota remains the leader in sales of hybrids and plug-in hybrids, two model types that accounted for nearly 30% of its global shipments between 2022 and November. But sales of pure electric vehicles - models that run purely on electricity - are still low.

The competitive EV business remains for Toyota as part of a larger strategy to promote and invest in a diversified offering that also includes hybrid and hydrogen vehicles.