The world’s biggest car maker Toyota is still forecasting bumper profits but it has cut electric vehicle production to concentrate on hybrid vehicle sales to avoid “price competition in the EV market
Just two months ago Toyota was bullish about growth forecasting 600,000 sales by 2025 informing major suppliers of the target new target of making 600,000, up more than three times from its 2024 target, according to a Japanese publication Nikkei.
This week despite record growth this fiscal year (ending March 2024), the motor manufacturer has slashed its EV sales forecast by nearly 40%. In Toyota’s focus on hybrids to “avoid the price competition” in the EV market.
Toyota released its Q2 2024 fiscal results Wednesday (Nov 1), showing growth across the board. Through the first half of the fiscal year, Toyota (and Lexus) sales reached 4.7 million, up 114% from last year.
The automaker recorded sales growth across all regions. Electrified vehicle sales accounted for 35.3% of total sales. However, HEVs carried the load with 1.7 million sold compared to only 59,000 battery electric vehicles.
Despite issuing new guidance, Toyota expects a lower share of EV sales. The company still expects to sell 9.6 million vehicles this fiscal year but with a significantly lower share of electric cars.
Toyota cut its EV sales forecast from an expected 202,000 to only 123,000. That’s almost a 40% difference.
The company said the lower forecast is “reflecting the decline in the Chinese market.” Toyota’s CFO Yoichi Miyazaki mentioned on the company’s earnings call that the adjustment was due to the intensifying EV price war in China (via Automotive News).
Inside EVs website reports: “Until the fiscal year ends, Toyota wants to sell 3.6 million traditional hybrids worldwide, up from an earlier outlook of 3.5 million, while total electrified vehicle sales – including EVs, hybrids, plug-in hybrids, and hydrogen fuel cell vehicles – are expected to reach 3.9 million, up 42 percent from the previous fiscal year. Electrified vehicles will account for about 37 percent of the carmaker’s total sales.”
In total, the Toyota and Lexus marques are expected to manufacture a record 10.1 million vehicles this fiscal year, while the outlook for consolidated global retail sales has gone up to a record 11.38 million units in the current fiscal year.
The website continues: “The Japanese automaker will lean into its heritage of HEVs. Miyazaki said this is “one of the ways we can avoid the price competition” that’s intensifying in China.”
Electrek.co says: “Toyota has already cut prices in the region as it looks to compete with market leaders like BYD and Tesla. The company also laid off workers through its joint venture with China’s Guangzhou Automobile Group (GAC).”
Overall the inustry commentators note that while Toyota is a giant automaker, it has not yet completed its transition into the EV market.
Related stories Ford pauses a $12 billion EV investment, after saying electric vehicles are too expensive
Read more on this story at Electrek.co HERE
Read more on this story at Inside EVs.com HERE
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