Toyota Unbowed as EV Sales Crater

Over the years, we've had occasion to comment on the ups and downs of perhaps the only sane executive in the motor vehicle industry, Toyota Motor Corporation's now-former CEO Akio Toyoda. Sane because, as the rest of his industry is desperate to win Woke points by going all-in on E.V.s, Toyoda has been politely, but firmly, suggesting that maybe they should start pumping the breaks. We described his position in a post last year:

Toyoda [is] concern[ed] that it [is] unrealistic to expect the entire industry to electrify in the timeframe that governments and activists (but we repeat ourselves) have demanded, not least because of the cost of updating infrastructure — in Japan alone he estimated that it would cost somewhere between $135 billion to $358 billion to build up the required infrastructure to support an fully EV fleet. And then there's the fact that switching to EVs doesn't change how electricity is generated. As Toyoda said at the time, "most of the country’s electricity is generated by burning coal and natural gas, anyway." So the politicians mandating a change are ensuring that, ultimately, our vehicles will all be coal powered. Consequently, according to Toyoda, "The more EVs we build, the worse carbon dioxide gets."

Consequently, Toyoda insisted that his company invest in several different technologies -- including E.V.s, hybrids, hydrogen powered cars, and high-efficiency internal combustion engine (I.C.E.) vehicles -- and follow the ones with which they had the most success, not to mention those which most appealed to the marketplace.

Hybrids work better.

This position was so eminently sensible that, of course, it got him canned. Or, technically, "promoted" from C.E.O. to chairman, a position in which he would have much less influence over the direction of the company. And it was no secret that his ouster was about E.V.s. Here's how the New York Times reported on the switch -- "Toyota Makes a Change at the Top as a Toyoda Steps Aside: Akio Toyoda, who has been reluctant to embrace all-electric vehicles, will be succeeded as C.E.O. by a Lexus executive."

Furthermore, daring to question the accepted narrative has enraged the activists in the industry. Over at the Capital Matters blog, Andrew Stuttaford collects some of the pearl-clutching commentary on Toyoda and, by association his company. This includes Electrek magazine putting Toyota on their list of the “most negative and influential companies on climate policy;” industry writer Jameson Dow complaining that Toyota "currently sells no [“pure” E.V.s] in the United States" because they think they know "better than governments, the public, and companies that actually produce EVs;” and Fredricka Klaren, the "head of sustainability" at Swedish E.V. maker Polestar, responding with exasperation to a question about Toyoda by declaring, “It’s not possible. We cannot continue using fossil fuels.”

There's an especial irony, however, in this final critique. Stuttaford points to this Daily Telegraph report about how Polestar, once considered an up-and-comer in the industry, "has struggled to keep up with premium rivals such as Tesla and which remains heavily loss-making despite its cars receiving critical acclaim." Their latest problem is that their parent company, Volvo, has given up on them, and is desperate to offload the 48 percent stake they have in the company, with the most likely buyer to be Chinese automaker Geely.

And they're not the only company to find themselves in hot-water over the increasingly apparent E.V. swoon. The rental car company Hertz just booted their own C.E.O. after the company massively over-invested in an E.V. fleet (which their actual customers didn't want), leading to their having to sell 20,000 used E.V.s at a loss. Ford and General Motors, probably in the hopes they can avoid similar fates, have quietly begun to pivot from E.V.s to hybrids.

Still waiting....

And Toyota? Despite their public attempt to distance their company from their former C.E.O.'s heterodoxies, his investment focus -- especially on hybrid technology -- has led to the company making money hand over fist. According to the Wall Street Journal, "Toyota... forecast a record $30.3 billion net profit for the fiscal year ending March.... The results sent Toyota shares up 4.8 percent in Tokyo to close at a record high." And this despite E.V.s accounting for less than one percent of their total sales.

It's worth noting that the WSJ report closes with a reference to Akio Toyoda himself, voicing once again his unpopular belief (in the industry) that E.V.s will never be a truly market-dominant force. Speaking to business leaders earlier this year, he said that he projects E.V.s "to reach at most a 30 percent market share." Of course, since the whole E.V. economic model, and the government mandates, are built on the assumption of a total, or near-total, transition over the next decade or so, even 30 percent of the market would be an absolute disaster that would most likely bring the entire E.V. edifice crumbling down.

With all the money that's been pumped into keeping them afloat, that's somewhat hard to imagine. But, with his track record thus far, at this point it'd be foolish to bet against Akio Toyoda.