Toyota has committed ¥8-trillion (US$70.22 billion) to electrify its cars by 2030, half of it to develop a battery electric vehicle (BEV) line-up, as it looks to tap a growing market for zero-emission cars, Reuters has reported.
But the world’s biggest car maker, which is a relative latecomer to full electric cars, said it expected annual BEVs sales to reach only 3.5 million vehicles by the end of the decade, or around a third of its current vehicle sales.
That is less than bigger rivals such as Europe’s top car maker Volkswagen, which in July predicted that half of its global vehicle sales will be battery-powered cars by that date.
Even so, shares in Toyota and group companies Toyota Tsusho and Denso rallied on Wednesday, leading gains on the benchmark Nikkei 225 index. Toyota advanced 4.06% while Toyota Tsusho and Denso jumped 4.81% and 4.44%, respectively.
Toyota’s announcement comes as traditional car firms increasingly take on Tesla, which has become the most valuable car maker this year. Tesla’s market value reached over US$1-trillion in October, surpassing the combined value of Toyota, VW, Daimler, Ford and General Motors.
Speaking at a press conference in Tokyo surrounded by more than a dozen planned BEV models, Toyota CEO Akio Toyoda said his company was still pursuing a multi-pronged, carbon-reduction strategy that also includes hybrid cars and hydrogen-powered vehicles.
“We want to leave all people with a choice, and rather than where or what we will focus on, we will wait a little longer until we understand where the market is going,” Toyoda said.
His company’s plan to introduce a full line-up of 30 BEVs by 2030 goes beyond the 15 models Toyota earlier said it would have available by 2025. The Japanese car maker on Tuesday also said it planned to invest ¥2-trillion in battery production by 2030, up from the ¥1.5-trillion it announced earlier.
That investment includes $1.29-billion for a new battery plant in North Carolina in the US that will begin production in 2025.
EVs still only account for a small portion of car sales, but the market is growing rapidly, with new registrations up 41% in 2020 even as the global car market contracted by a sixth that year.
In November, Toyota declined to join a pledge signed by six major car makers, including GM and Ford, to phase out fossil fuel cars by 2040. It argued that not all parts of the world would be ready to transition to green cars by then.
In addition to electrified cars, Toyota is also developing internal combustion engines that run on hydrogen fuel. Toyoda said the technology could help to save some of Japan’s 5.5 million auto jobs by allowing the car company to keep supply chains that would disappear with a full shift to electric cars.