The car industry is buzzing with news about Toyota — yes, Toyota — announcing it has big plans to bring more battery-powered electric and plug-in hybrid models to customers in the US between now and the end of the decade. Wait, Toyota said that? Yes, Virginia, it did.
Cheater Dawson of Bloomberg reports that stodgy Toyota has announced plans to manufacture two new battery electric vehicles in the US. By two years from now, a total of seven Toyota EVs will be in the company’s US showrooms. Those US-made EVs will join three other new EV’s imported from Japan — the bZ Woodland, the all new CH-R, and a version of the Lexus ES sedan — and the two EVs currently available in America — the Toyota bZ (previously known as the bZ4X) and the Lexus RZ. 80% of Toyota and Lexus models sold in the US today offer customers a choice of a hybrid or fully electric powertrain.
Bloomberg notes that Toyota typically does not add a new model to a factory unless it expects to sell 100,000 to 150,000 units a year once production is in full swing. For instance, its factory in Georgetown, Kentucky, is the biggest Toyota factory in the world. It cranks out 550,000 versions of the RAV4, Camry, and Lexus ES a year. Now one of the new battery-electric models will be built there as well. The Camry went all-hybrid last year, and the company will stop offering a gasoline-only version of the RAV4 in its next model year.
The other new EV will be assembled at the Toyota factory in Princeton, Indiana, which produced nearly 330,000 vehicles last year. That factory currently makes the Highlander, Grand Highlander, and Sienna minivan.
Toyota Expects EV Growth
Company executives are saying they expect slow but steady growth in EV sales in the US, which is actually kind of hopeful, given that Congress and the current failed US president intend to rip up California’s EV waiver, impose additional fees on electric cars, revoke the $7,500 federal tax credit, and eviscerate the production incentives for battery manufacturing provided by the Inflation Reduction Act (IRA).
“We’ll sell a little bit more every year and grow with the market,” Cooper Ericksen, a senior vice president in charge of planning and strategy at Toyota Motor North America, said in an interview with Bloomberg. “But we have to think about how many Canada will use, how many the US will use, and we can then export to other global destinations.” While EV sales may not be growing as fast in the US as proponents might like, Toyota seems comfortable with the idea that any cars it manufacturers in the US that go unsold will find buyers elsewhere.
Toyota is building battery cells for EVs and PHEVs at its new factory in Liberty, North Carolina, which will have 14 production lines when fully operational — 10 dedicated to cells for EVs and 4 for cells that will go into plug-in hybrid vehicles. The first PHEV production line will be operational in June, with the rest coming online between now and 2034. At full capacity, that factory will be able to churn out 30 GWh of batteries — enough for 800,000 tiny hybrid batteries, 150,000 larger batteries for plug-in hybrids, or 300,000 for battery electric cars.
What is driving Toyota’s newfound interest in cars with batteries is a form of FOMO — fear of missing out as GM, Hyundai/Kia, and maybe Honda flood the zone with battery-powered models of their own. Toyota says it expects the share of battery electric cars in the American market to nearly double by 2030. “BEVs right now aren’t incremental volume for us. They’re cannibalizing our volume,” said Ericksen. “But in the future, we think it’s a really important segment that we don’t want to give up to the competition.”
More PHEVs From Toyota
While all this EV goodness is going on, Toyota is also planning to add more plug-in hybrids to its model lineup. Last year, 2.4% of its sales were PHEVs, but the company expects that to climb to 20% of its sales in the US by 2030.
According to a report by CNBC, the first PHEV from Toyota was a Prius model that debuted in 2016, a little known fact most readers will be surprised to learn. PHEVs have often had wimpy battery-only range — sometimes less than 10 miles — but long-range plug-ins are starting to light up the sales charts in China. BYD even has a few models that can drive more than 1300 miles on a combination of battery and internal combustion power. Purists may carp that PHEVs are not real electric cars, and they are right, but if range anxiety is preventing someone from taking the electric car plunge, 1,300 miles ought to calm those jitters.
“We are going to grow our PHEV volume through the lineup over the next few years,” David Christ, head of the Toyota brand in North America, told CNBC during a visit to the company’s North American headquarters. “We love the PHEV powertrain. We’re working to increase, perpetually increase, the amount of miles you can drive on EV-only range. We’re looking at plug-ins across the lineup, and it’s more a function of where can we build them, and what is the product strength versus the competition,” Christ said.
Chris Hopson, principal analyst at S&P Global Mobility, told CNBC, “The growth [in PHEVs] is likely limited due to the expensive dual powertrain cost structure. For those already invested, it may make sense to continue along the path. However, for those who haven’t already made significant investments, it is a large incremental cost that must be balanced.”
S&P Global sees PHEV sales in the US growing from about 2 percent last year to 5 percent by the end of the decade. That is considerably less than Toyota is forecasting. AutoPacific expects PHEVs to grow to about 4.2% by 2030, while AutoForecast Solutions expects them to stabilize at 3.3% over the coming years. Either Toyota or the chattering classes see the future clearly and will be proven correct in the fullness of time.
PHEV sales for Toyota and Lexus increased by 39% last year, according to company data. “We’re looking across the lineup and saying, ‘How many powertrains can we offer on what products?’” Christ said. “We are going to increase the percentage of hybrids and PHEVs.” We at CleanTechnica have been criticizing Toyota for years for dragging its feet on the transition to battery-powered cars. Maybe, just maybe, the sleeping giant is finally waking up.
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