Toyota is the world’s largest car maker by production and sales. Thanks to its commitment to quality, and the efficiency of its plants around the world, this Japanese car maker is known in every single country. It has a strong presence in all the five continents through production factories and design centres.
A big part of the popularity of Toyota is due to its ability to offer the right vehicle in every market. Better than its rivals from Japan, USA, and Europe, Toyota is quite good by creating cars for the taste of the markets where it operates; and they are usually global products. The Corolla, RAV4, Land Cruiser, and Yaris are just four examples of a huge lineup that’s appealing everywhere.
The other part of the explanation is hybrid engines. Toyota has been producing hybrid cars for more than 20 years with millions of units sold since then. The investment on this powertrain is paying off: the brand is ahead of its rivals in terms of fuel emissions and makes money with these cars.
Despite the success and the positive image hybrid technology has given Toyota, some external factors are forcing the brand to accelerate the next step. They need to decide whether to continue improving the existing technology or shifting to zero emissions powertrains such as pure electric cars.
The problem is that the second option is a bit unknown for Toyota. As their focus these past 20 years has been on the development and proliferation of hybrid cars, they allocated less resources and interest for electric cars. Today, Toyota is the world’s largest pure hybrid car maker, but one of the smallest EV makers.
As emissions regulations get tougher around the world, it is clear that hybrids won’t be enough to meet the targets. They are already at the limit of internal combustion engines coupled with an electric motor. And although their impact has been quite positive on emissions, they would have never been able to take them to zero.
The technology is the ideal solution for now, but not in ten years. What will Toyota do? Will they continue to bet on this interesting, affordable, and easy-to-operate solution? Or will they finally give up and move to the electric solution?
The author of the article, Felipe Munoz, is an Automotive Industry Specialist at JATO Dynamics.