Toyota fast-tracks EV ambitions with fresh investment

Toyota seems to be fast-tracking its electrification ambitions with additional investments to be a global leader and overtake giants such as Tesla, which has now become the most valuable carmaker. Tesla surpassed Toyota, VW in valuation as it reached over US$1 trillion in October 2021.

“Toyota made several amendments to its earlier existing plans which include increasing battery electric vehicle (BEV) line-up from 15 to 30 vehicles by 2030. The investments in battery production have also been increased to JPY2 trillion  (US$17.5bn) from the earlier announced JPY1.5 trillion (US$13.2bn). The target for BEV sales globally by 2030 has been revised to 3.5 million units from the earlier announced 2 million units, which includes both BEVs and FCEVs.

“Of the US$70bn investment announced, more than half would go into R&D and capital expenditure for BEVs and the rest would be dedicated to HEVs, FCEVs and battery production. The investment also includes US$1.29bn for the North Carolina battery plant set to begin by 2025.

“Toyota has a strong heritage in electric and fuel cell vehicles. However, the present market scenario is highly dynamic due to entry and rapid expansion of new technology companies and traditional automakers into the EVs space. Hence, it is much needed for a global market leader like Toyota to expedite its developments through investments, partnerships and collaboration and maintain its market dominance. The company is well on track and has been equally focusing across all technological areas including ICE, BEV, HEV and FCEVs.

“The fast-tracking of EV milestones will enhance Toyota’s competitive position in the market as well as on the stock market. Toyota’s strategy has been very adaptable to its markets. The company has an alliance with Suzuki through which it is developing capabilities to manufacture compact and fuel-efficient ICE vehicles. At the same time, it is working on hydrogen fuel, a niche technology, which has potential to be a breakthrough in the auto industry. Though the company started a bit late on EVs as compared to European automakers, it has upped the game in recent years.

Credits: Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData