Toyota has committed Y1.5tn ($13.6bn) to the development and production of electric vehicle (EV) batteries until 2030, as the company signals a major bet on electric mobility and zero-emission vehicles.
“We want to proactively promote electrification efforts and, in order to that, we want to [invest] aggressively,” Masamichi Okada, the company’s chief product officer told journalists on September 7.
Toyota has pioneered the development of hybrid EVs (HEVs). Since the introduction of the first-generation Prius in 1997, the company has sold 18.1 million HEV units. The company equates this to the carbon dioxide emissions reduction of 5.5 million battery EVs (BEVs).
However, the company has also sent mixed signals regarding its plans to embrace electric mobility over the past couple of years, particularly at a time when its major competitors rushed to announce multi-billion-dollar investment plans to develop their own EVs.
The Wall Street Journal reported in December 2020 that Akio Toyoda, president of Toyota, had doubts over the existing hype. If the industry rushes to e-mobility, “the current business model of the car industry is going to collapse” and cost millions of jobs, he said. He added that in countries such as Japan, whose power-generation matrix leans heavily on coal and natural gas, “the more EVs we build, the worse carbon dioxide [pollution] gets”.
The company has now unveiled a selective approach for the development of its offer of zero-emission vehicles to combine its existing strengths in HEVs with its fresh ambitions in BEVs. Overall, it plans to sell eight million electrified vehicles by 2030 — two million of which will be BEVs and fuel cell EVs, while HEVs will make up the remaining six million, the company said on September 7.
The development and sourcing of next-generation batteries is functional to these targets. Toyota plans to secure a supply of EV batteries for 200GWh by 2030, up from the 180GWh previously announced. Of the Y1.5tn allocated for this purpose, one-third will go towards research and development (R&D); the rest will go to production and sourcing.
R&D efforts will focus on halving the cost of batteries per vehicle in the second half of the decade through the development of next-generation batteries and more power-efficient vehicles. Production efforts will focus on developing a nimble, localised production base.
“We would like to pursue small basic production units; the amount of manpower should also be kept small, and lead time to introduce new production lines should be short too. According to our needs, we would like to respond with speed and flexibility,” Mr Okada said. “On top of that, we will work together with partners, and we would like to localise production and supply as a principle [while working] with partners that are good in those regions.
Toyota’s plans come six months after its closest competitor Volkswagen for global leadership, Volkswagen, announced its electrification strategy aimed to secure 240GWh of EV batteries supply by 2030.