Tokyo: When Tony Le set out with his wife to buy a new car last year, they looked at Tesla and other all-electric models.
In the end, the 37-year-old Modesto, California, tech worker opted for the Toyota RAV4 Hybrid over concerns about a fully electric vehicle, a depleted battery, and no charging station in sight.
“Sometimes I want to play with electric vehicles just based on speed and torque. But for practical useā¦ it doesn’t make sense,” said Le, who often commutes from California to Washington state for work. .
Li is one of a growing number of consumers accelerating hybrid vehicle sales, leaving longtime hybrid maker Toyota Motor behind rivals in a rapid shift toward full electrification and now reeling from weak EV demand. Are struggling.
High interest rates and an uncertain economic outlook have also led many EV makers to cut their production targets and warn of slowing sales growth in recent weeks.
However, Toyota is expected to offer a more optimistic outlook when it reports its earnings on Tuesday, helped by its heavy reliance on hybrids, which accounted for about a third of total sales of more than 10 million vehicles last year.
“Every model we sell now is either exclusively hybrid or a hybrid version,” Greg Davis, general manager of Walser Toyota, a dealership in Minnesota, told Reuters.
He said his outlet is trying to bring the number of hybrid vehicles to 40%-50% of total sales, as Toyota is going to make its best-selling sedan Camry in the US market available only in hybrid version. ,
Toyota has already said the next generation of Camry will come only as a hybrid, its boldest move yet to advance the technology it started with the Prius more than a quarter century ago. Was introduced earlier.
Despite expectations that Toyota’s sales will pick up in the near term, analysts have warned that a major risk facing the world’s best-selling carmaker is that it is falling behind in pure battery EVs, which are widely seen as unsustainable in the long term. Seen as creating the future. auto industry.
“Toyota’s biggest risk is consumer adoption of BEVs (battery EVs),” said Stephanie Brinley, associate director of S&P Global Mobility.
āIf consumer BEV adoption changes again and accelerates, Toyota may not be fully prepared with competitive BEV solutions.ā
Toyota sold only 104,000 battery EVs last year, less than 1% of its total sales, including sales of its luxury Lexus brand. It plans to increase shipments to 1.5 million EVs by 2026, down from Tesla’s 2023 shipment of 1.8 million vehicles.
Toyota takes a “multi-pathway” approach to meet customer needs in every market, and Chairman Akio Toyoda said last month that hybrids, hydrogen fuel-cell cars and fuel-burning battery EVs will make up as much as 30% of the market. The share will be reached. Vehicles make up the rest.
long wait for delivery
U.S. hybrid sales are rising as consumers shy away from high EV prices and are concerned about the range of electric cars, especially in more rural areas, where there may be long distances between charging stations.
Battery EVs are not as widely accepted in the Midwest as they are on the West Coast and other parts of the United States, Davis said.
But demand for hybrids is so strong that buyers have to wait nearly a year to get delivery of some models, such as the Toyota Sienna multi-purpose vehicle, and pay full manufacturer suggested retail prices, he said.
In contrast, Tesla, which has been offering sharp price cuts in key markets including the US and China since last year, suffered a contraction in vehicle margins last quarter and warned of slowing EV demand this year.
According to S&P Global Mobility data, hybrids accounted for 9.3% of new light vehicle registrations in the United States from January to November in 2023, 1.8 percentage points more than EVs.
This is benefiting Toyota, which was the largest hybrid seller in the US with more than a third of new registrations, followed by Honda Motor, South Korea’s Hyundai Motor and its affiliate Kia and Ford Motor with 20% each.
General Motors CEO Mary Barra said this week that her company will introduce plug-in hybrid vehicles in North America, a departure from a strategy to bypass hybrid powertrains on that continent.
According to LSEG data, analysts expect Toyota to post a 40% rise in operating profit in October-December.
