Electric cars will never dominate market, says Toyota


Toyota chairman Akio Toyoda said electric vehicles would command 30pc of global market share at best – Kiyoshi Ota/Bloomberg

Electric cars will never account for more than a third of the market and consumers should not be forced to buy them, the boss of Toyota has said.

Akio Toyoda, chairman of the world’s biggest carmaker by sales, said that electric vehicles (EVs) should not be developed to the exclusion of other technologies such as the hybrid and hydrogen-powered cars that his company has focused on.

Speaking to employees in a question and answer session, Mr Toyoda called for a “multi-pathway approach”, adding: “The enemy is CO2.”

He said he believed battery EVs will only secure a maximum of 30pc of the market – less than double their current share in the UK – with the remaining 70pc taken by fuel cell EVs, hybrids and hydrogen cars.

Mr Toyoda said: “Customers — not regulations or politics — should make that decision.”

Mr Toyoda argued that electric cars’ appeal is limited because one billion people in the world still live without electricity, while they are also expensive and need charging infrastructure to operate.

The chief executive, whose grandfather founded the car company, also pushed back against accusations that Toyota had fallen behind rivals in the development of EVs.

He insisted it was right that the car maker was focusing on alternative technologies, but admitted it was hard to “fight alone”.

The chairman also pointed to Toyota’s recent announcement that it was working on a new combustion engine, saying it was important to give engine factory workers a role in the green transition.

However, he speculated that banks may soon stop lending money to companies that continue to build fossil-fuel powered engines.

Touted for years by Toyoda, the “multi-pathway approach” argues that customers should be able to pick whatever car type fits their needs and that the shift to EVs will not be as rapid as some have predicted.

In recent weeks, that strategy has been partially vindicated after Toyota revealed it had produced a record 9.2m vehicles in 2023 with one month of the year still to go. The annual total is expected to exceed 10m.

At the same time, sales for January to November increased 7pc to 10.2m vehicles.

Koji Sato, the car maker’s chief executive, last year promised Toyota would sell 1.5m battery EVs a year by 2026, and 3.5m by 2030.

Tesla, the world’s biggest EV producer on an annual basis, reported 1.8m deliveries last year.

Mr Toyoda’s remarks come after electric car sales in both the UK and Europe slowed towards the end of 2023.

Overall, the Society of Motor Manufacturers and Traders said the UK market share of electric cars went into reverse last year as consumers baulked at high prices and a lack of charge points.

EVs’ share of the overall new car market shrunk from 16.6pc in 2022 to 16.5pc in 2023. The latter compares with the 17.2pc share originally forecast by the SMMT.

The lobby group is now urging Jeremy Hunt, the Chancellor, to jump-start demand by slashing VAT on electric car purchases for three years in his next Budget, due on March 6.

Ministers have so far avoided big stimulus measures on the demand side and are instead forcing manufacturers to ramp up the proportion of pure EVs they sell under the so-called zero emission vehicle mandate.

Car makers will face fines if they fail to hit the targets, which take effect from this year. The figure for 2024 is 22pc, rising to 28pc in 2025, 52pc in 2028 and 80pc by 2030.

Toyota lobbied against the implementation of the policy, telling the Government it was “extremely concerned” by this year’s target, with which it would be unable to comply.

The company claimed the mandate would penalise it “both financially and in terms of its brand reputation”, according to documents obtained under Freedom of Information laws by the Fast Charge newsletter.

Instead, Toyota lobbied for a one-year delay to the scheme and called for hybrids to be partly eligible.