Toyota, Slow To Move To EVs, Says It Offers Customers Choice

Toyota Motor Corp, under scrutiny from investors over a perceived sluggish embrace of battery electric vehicles, said on Wednesday it needs to offer a variety of choices to suit different environments and customers.

At its annual general meeting, executives at the world's largest automaker by sales tackled questions ranging from concerns about its electrification strategy to CEO succession plans and the ongoing chip shortage.

Once a favourite with environmentalists for the hybrid Prius model it popularised more than two decades ago, Toyota has come under fire from some investors for not phasing out gasoline-powered cars and its lobbying on climate policy.

"The goal is carbon neutrality," Toyota's Chief Technology Officer Masahiko Maeda told the meeting, responding to questions submitted by Danish pension fund AkademikerPension, which also asked Toyota to refrain from lobbying to undermine the transition to BEVs.

However, "customers need to choose," Maeda said, in order to popularise electric cars that include hybrids. A variety of options should be available and the automaker should not narrow those down, he said.

Toyota argues that hybrids still make sense in markets where infrastructure isn't ready to support a faster move to battery electric vehicles (BEVs), and is exploring the viability of green fuels for internal combustion engine cars, including hydrogen.

The company last year committed to spend 8 trillion yen ($60 billion) by 2030 to electrify its cars, half of which is slated to develop full EVs. Still, it expects annual sales of such cars to reach only 3.5 million vehicles by the end of the decade, or around a third of current sales.

Just last month, Toyota rolled out its first mass-produced BEVs domestically, albeit for lease only, and gasoline-electric hybrid models remain far more popular in Japan than BEVs.

NEXT CEO

Asked about succession planning, Toyota chief executive Akio Toyoda, who has led the company for 13 years, said he was "thinking about timing and the selection of a successor."

There has been no indication from the company that Toyoda plans to step down.

Toyoda, 66, a grandson of company founder Kiichiro Toyoda, steered the company through a dark phase when Toyota sales slumped after millions of recalls and the company reported billions of dollars in losses.

"I'd pick someone who understands the company's philosophy as my successor," he added.

Toyoda has sought to reform Toyota's corporate culture, spending more time with younger executives and cutting back some senior positions.

In 2020, he appointed company veterans Maeda and Kenta Kon to top roles. Both were 51 at the time.

Toyota - which sold 10.5 million vehicles in 2021, far outstripping closest rival Volkswagen - has repeatedly cut production this year, plagued by a global chip crunch.

It expects the chip shortage to continue, although there are signs of improvement, head of it purchasing group, Kazunari Kumakura, said on Wednesday.