Toyota slashes EV production forecast by a third By Rob Hull Published: 21:33 BST, 9 September 2024 | Updated: 21:40 BST, 9 September 2024 e-mail Advertisement The world's biggest car maker, Toyota, has significantly slashed its electric vehicle production plans in the latest case of manufacturers rolling back their EV intentions over concerns about slowdown global demand. The automotive giant has shortened its EV manufacturing ambitions for 2026 by a third, estimating it will make 1 million battery cars during the year rather than the 1.5 million it had previously forecast.
It comes just days after Volvo announced it had abandoned its plans to become an electric-only car maker by 2030. Various brands have already shortened their EV expectations amidst slower-than-expected EV sales in recent years. Nikkei Asia reported that Toyota claims to have made no changes to its plans, despite its president, Koji Sato, stating just last year that it would produce 1.
5 million EV units in 2026 and scale up to 3.5 million per year by 2030. The car maker said the figures were not targets but instead 'benchmarks for shareholders'.
However, it has been reported that Toyota has already notified its parts suppliers of the change in EV production forecasts. A spokesperson for Toyota UK told us: 'There is no change in the fact that we are moving forward with preparations to produce BEVs [ battery electric vehicles ] and other electric vehicles, including securing batteries, based on 1.5 million units in 2026 and 3.
5 million units in 2030. 'The number of vehicles we have indicated is not a target but a standard for our stakeholders and is positioned as a guideline for building a better system to meet future demand for BEVs. 'We will continue to expand our supply chain, including batteries, establish a sales structure, improve infrastructure such as recharging facilities, and promote software development to be ready to produce and sell electrically powered vehicles.
'We believe it is important to put our customers' needs first and introduce the options they seek in a timely manner. 'Based on the multi-pathway concept, we will continue to develop various options, including BEVs, PHEVs [ plug-in hybrid electric vehicles ], and HEVs [ hybrid electric vehicles ], and respond flexibly while carefully assessing actual demand.' Manufacturers have been citing not just a slower than predicted uptake of EVs in recent months but an explosive growth of both Tesla and cheaper Chinese alternatives.
Toyota, like some of its Japanese rivals, have been reluctant to put all its eggs into the electric car basket and has continued to focus on hybrid vehicles. This has been an inspired move, with sales of conventional and plug-in hybrids increasing as a result of consumers around the world showing hesitancy to switch to EVs amidst concerns about range anxiety, premium battery car prices and lacking charging infrastructure. The Japanese car giant, which sold over 10 million cars across all fuel tyres in 2023 - sold around 104,000 EVs last year, representing just one per cent of its global registrations.
Its EV sales are just a fraction of the 1.8 million units sold by Tesla over the same 12 months. This is largely due to Toyota's lack of EV availability.
In Europe, it offers just one electric - the bZ4X . The battery-powered SUV is priced from £42,860 in the UK and offers a range of 318 miles as well as a 32-minute rapid charge from 10 to 80 per cent. While Toyota's EV output last year was four times higher than what he sold in 2022, it would need to dramatically increase its model line-up and production output if it is to meet its slashed target of 1 million units in 2026.
Earlier this year, Akio Toyoda, Chairman at Toyota, said in January that battery-powered electric vehicles will never dominate the car market and make up no more than a third of global sales. Toyoda said the shift to EVs is not the answer when a billion people worldwide live without electricity: ‘We also supply vehicles to these regions, so a single BEV option cannot provide transportation for everyone,' he commented. ‘No matter how much progress EVs make, I think they will still only have a 30 per cent market share.
’ This is Money has contacted Toyota UK for comment. In May, Toyota announced it was partnering with Mazda and Subaru to bring to market smaller petrol engines to use alongside hybrid technology and adopt green biofuels to lower vehicle emissions as the Japanese motor brands outline yet further reluctance to go entirely electric. Toyota described the development as 'an engine reborn'.
Toyota and Volvo the latest brands to abandon EV plans: News of Toyota's shift in EV production schedules comes just days after Swedish car maker Volvo confirmed it had abandoned its plans to go exclusively electric at the end of the decade. Bosses last week confirmed it is now aiming for 90 to 100 per cent of its global sales to be either pure electric or plug-in hybrid by 2030. It comes in response to a decline in appetite for EVs across major markets, including a slowing uptake of battery cars among private buyers in the UK.
Volvo's previous target, which it set back in 2021 when the future EV landscape appeared more robust, was for its entire car range to be pure electric by 2030. However, a downturn in EV sales worldwide has seen it - like some of its rivals - put the brakes on its green ambitions. Volvo, majority-owned by China's Geely, has attributed its change in policy to a 'slower than expected' rollout of charging infrastructure, the withdrawal of government incentives in some markets and 'additional uncertainties' created by recent tariffs on electric vehicles.
The latter references recent import levies introduced on EVs arriving from China, which have been upped to 100 per cent in the US and Canada, while the EU has also introduced provisional tariffs which could be upheld following a vote by governments later this year . Volvo Cars chief executive Jim Rowan said: 'We are resolute in our belief that our future is electric. 'An electric car provides a superior driving experience and increases possibilities for using advanced technologies that improve the overall customer experience.
'However, it is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption. 'We are pragmatic and flexible, while retaining an industry-leading position on electrification and sustainability.' Toyota and Volvo are just the latest in a long list of mainstream manufacturers performing U-turns on their EV ambitions.
Renault's chief executive in July became one of the latest motor industry big name to cast doubts on the transition to electric cars in this decade , warning that sales are not on the 'right trajectory'. With the Department for Transport confirming to This is Money last month that the Labour government will push ahead with its ambition to fast-forward the ban on sales of new petrol and diesel vehicles in Britain by five years to 2030 , Luca De Meo, boss at the French car giant, warned that customers are not ready to switch to battery-powered vehicles and called for 'more flexibility in the schedule'. Luxury car maker Porsche also said in recent weeks that the transition to electric vehicles to take longer than it thought.
As a result, it has announced it is watering down its aims for 80 per cent of sales to be all-electric by 2030 and went on to confirm it will continue to sell the existing Cayenne SUV with combustion engines into the next decade. It comes after Ford recently said its own plans to become an EV-only brand from 2030 were 'too ambitious' and Fiat confirmed it has torn up plans for its 500 city car to be electric-only because older drivers don't want electric models. German auto giant Mercedes-Benz this year announced it too will extend the production cycle of one of its biggest-selling combustion cars due to concerns about EV take-up.
The A-Class hatchback, which was due to be retired by the end of this year, will continue to be built through to 2026 as part of a more 'flexible' Mercedes strategy for transitioning to EVs. CEO Ola Källenius has said the company will continue to produce combustion-engine cars based on existing platforms well into the next decade because price parity between EVs and petrols 'is many years away'. The German luxury carmaker said sales of EVs, including hybrids, would account for up to 50 per cent of the total by 2030, five years later than its forecast in 2021 and has slowed its battery cell capacity plans.
Audi has scaled back the rollout of EV models due to falling demand while sister brand VW has also adjusted its production outputs due to a combination of parts shortages and lower-than-expected sales. Europe's biggest automaker by sales hasn't changed its 2030 targets for EVs to make up 70 per cent of sales in Europe and 50 per cent in the US and China, despite VW execs repeatedly warning about slowing demand. However, its group technology chief said in August VW's battery factory building plans were not set in stone and depended on the EV demand.
In June, General Motors said it had cut its EV production forecast for 2024 and in July it declined to reiterate its forecast to produce 1 million EVs in North America by the end of 2025. Bentley had aimed for an all-EV lineup by 2030, but in March then-CEO Adrian Hallmark said hybrids would likely still be on sale after that. And fellow British luxury car maker Aston Martin in February announced it has delayed the launch of its first EV due to a lack of appetite from its customers.
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