On Wednesday, Toyota Motor Corporation announced its roadmap for its electric vehicle (EV) strategy, with the aim of launching ten new EV models by 2026 and reaching global annual sales of 1.5 million. This goal would put the company in a position to catch up with current industry leaders, Tesla and BYD, which have made significant strides in the electric vehicle market.
The announcement is significant for the Japanese automaker, as the number of parts required for EVs is expected to be 30% to 40% lower than that of gasoline-engine vehicles. As a result, the Japanese auto supply chain, which has been centered on engine vehicles for decades, will face a structural transformation as Toyota shifts to electric vehicles.
Despite its current global sales forecast for 2022 of 9.56 million vehicles for the Toyota brand and the premium Lexus brand alone, Toyota will only rank 28th in global sales for EVs in 2022, with a share of just 0.3%. However, the company aims to achieve an annual production of 200,000 EVs in the United States after 2026, with the goal of making nearly 20% of the vehicles produced in the United States electric vehicles.
Toyota also plans to launch a new generation of EVs that will improve battery efficiency and double the cruising range. However, the company’s official launch of EV production will not take place until after 2025, more than three years after its competitors, so Toyota will need to catch up quickly in order to meet its ambitious goals.
The shift towards EVs will have significant implications for Japan’s domestic auto industry, with major automakers such as Toyota leading the way. As a result, the number of parts required for electric vehicles is expected to be reduced by 30% to 40% compared to the roughly 30,000 parts required for gasoline-engine vehicles. However, according to Arthur D. Little Japan, if 90% of the 680,000 auto part-related jobs switch over to the production of EVs, more than 80,000 jobs could be lost.
Toyota’s announcement of its EV strategy marks a significant shift for the company and the Japanese auto industry as a whole. The move towards electric vehicles will require major structural changes, but the potential benefits in terms of reduced emissions and a more sustainable future make it a worthwhile endeavor.