Why Toyota isn’t all-in on electric vehicles

Roughly two decades ago, Toyota Motor became the preferred carmaker of U.S. environmentalists and eco-conscious consumers with its Prius hybrid, an “electrified” vehicle that was among the cleanest and most fuel-efficient vehicles ever produced.

Amid rising gas prices, demand for the vehicle grew and inspired other automakers to roll out a litany of hybrid models. Prius vehicles, including a plug-in hybrid electric model, remain among the most fuel-efficient, gas-powered cars in America.

But as the auto industry transitions to a battery-powered future, the Japanese automaker has fallen out of favor with some of its once-core supporters due, ironically, to the Prius and Toyota’s hesitancy to invest in all-electric vehicles.

“The fact is: a hybrid today is not green technology. The Prius hybrid runs on a pollution-emitting combustion engine found in any gas-powered car,” Katherine García, director of the Sierra Club’s Clean Transportation for All campaign, wrote in a recent blog post.

Greenpeace last week ranked Toyota at the bottom of a study of 10 automakers’ decarbonization efforts, citing slow progress in its supply chain and sales of zero-emission vehicles such as EVs that totaled less than 1% of its overall sales.

While automakers such as General Motors, Volkswagen and others vowed to invest billions of dollars in recent years to develop all-electric vehicles that don’t require gas-powered engines like the Prius, Toyota lagged, only more recently announcing similar investments. It also continues to invest in a portfolio of “electrified” vehicles – ranging from traditional hybrids like the Prius to its recently launched, yet underwhelming, bZ4X electric crossover.

The strategy has pitted the world’s largest automaker in opposition to many of its rivals, and raised questions about its commitment to a sustainable path forward for the industry, despite company targets to be carbon neutral by 2050.

Toyota is not alone in such plans. Stellantis, Ford and the other Japanese automakers are similarly investing in electrified hybrid models. But in the hands of the patriarch of mainstream hybrid vehicles, a conservative approach to EVs is notable.

Toyota executives, while increasing investments in all-electric vehicles, argue the company’s strategy is justified — not all areas of the world will adopt EVs at the same pace due to the high cost of the vehicles as well as a lack of infrastructure, they say.

“For as much as people want to talk about EVs, the marketplace isn’t mature enough and ready enough … at the level we would need to have mass movement,” said Jack Hollis, executive vice president of sales at Toyota Motor North America, last month during a virtual Automotive Press Association meeting.