Toyota Sees Europe Reaching EV Tipping Point Within a Few Years

By Bloomberg

Dec 04, 2023

image is BloomburgMedia_S55841DWRGG001_04-12-2023_15-00-10_638372448000000000.jpg

A Toyota Motor Corp. FT-3e electric vehicle on display during Japan Mobility Show in Tokyo, Japan, on Wednesday, Oct. 25, 2023. Japan’s carmakers are staging their first motor show in four years to make the case they’ll remain major global forces to be reckoned with in the electric-vehicle age.

Europe is still missing some key ingredients for widespread electric-vehicle adoption, according to Toyota Motor Corp.’s top local executives, but the region is far along enough for the world’s largest automaker to start looking at localizing production.

The Toyota brand will offer around 15 different zero-emission vehicles in Europe by 2026, and the company expects to deliver more than 250,000 battery-electric vehicles by then, Toyota Europe Chief Executive Officer Yoshihiro Nakata told reporters last week in Brussels.

“We’ve always been clear that local production of BEVs would come when we are able to secure sustainable volume,” Nakata said. “We believe we’ll be able to make that step around this time frame.”

Localizing production outside of Japan isn’t a move Toyota makes lightly. It has yet to assemble its pioneering hybrid car, the Prius, overseas after 26 years. The company manufactured its first gas-electric model in Europe in 2010, a decade after it started importing the Prius.

Given that cautious approach — as well as Toyota’s longstanding skepticism about the readiness of mainstream consumers to go fully electric — the company’s willingness to publicly float a rough start date for local production carries extra weight. It suggests that, for all the gloom about a slowdown in EV growth, the industry is trending in the right direction.

Europe still has work to do to build up its battery supply chain, expand public charging infrastructure networks and establish a used EV market, Toyota Europe Chief Operating Officer Matt Harrison said in an interview. But the region has several factors working in its favor, including cohorts of environmentally conscious car buyers and policymakers that are steadfastly pursuing ambitious emissions-reduction efforts.

Toyota is gradually getting more comfortable with the medium-term outlook for EVs as several European automakers struggle to sell them. Mercedes-Benz Group AG recently called competition in the space “brutal,” while Volkswagen AG has laid off workers, paused production and scrapped plans for a new EV factory as orders have fallen short of targets. Renault SA postponed a potential listing of its electric-vehicle business to next year.

“The enablers are not really fully there yet, so I’m not surprised we’re having a bit of a wobble,” Harrison said. “There are a lot of fundamentals that still need to be fixed before we start to move.”

So far, Toyota hasn’t paid a price for biding its time on fully electric vehicles — a strategy afforded by its lineup of more than two dozen hybrids. It’s maintained an order bank in Europe of more than 300,000 vehicles and expects to keep growing sales next year in a flat market.

Whereas Stellantis NV CEO Carlos Tavares recently told Automobilwoche he’s bracing for European Parliament elections in June to potentially lead to shifting policies toward EVs, Harrison said any leadership changes are unlikely to lead to dramatic shake-ups.

“I don’t think it’s as extreme as the US,” he said, referring to former President Donald Trump’s staunch opposition to incumbent Joe Biden’s policies. In Europe, Harrison said, “there’s a great underlying consumer sense of responsibility and behavior that isn’t going to change around the environmental agenda.”

©2023 Bloomberg L.P.

By Craig Trudell

KEEPING THE ENERGY INDUSTRY CONNECTED

Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.

By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.

Back To Top