Toyota exec believes full-fledged EV push could be ‘wasted investment’

2024.03.02 3 min read

A longtime Toyota executive has essentially put the Japanese automaker’s strategy regarding a widespread electric vehicle transition out in the open, calling it a potential waste.

Instead, Ted Ogawa, a longtime member of Toyota, said that money would be better spent on emissions credits to meet climate goals.

“Wasted investment is worse than the credit purchase,” Ogawa said, according to Automotive News.

Ogawa seems to believe that electric vehicle demand is not currently at a level that would match a full-fledged transitional effort from gas-powered and hybrid vehicles to electric cars. He explained this:

“…again, our starting point is what the customer demand should be. So, for example, 2030 regulations said the new-car market, more than half of ‘it should be BEV, but our current plan is like 30%.”

Ogawa also said that, despite the EPA reconsidering the EV regulations and potentially backtracking them slightly, it is likely a better idea from a business perspective to look at what customers want, which differs from what the agency wants:

“I know that EPA is now reconsidering what the regulation level should be…We are respecting the regulation, but more important is customer demand.”

He elaborated on this point, stating that the company would be better off purchasing credits from other car companies than living with a “wasted investment,” where it would funnel billions into EV development, including battery manufacturing, to qualify for U.S. incentives, for example.

Toyota has already committed to a $1.3 billion EV development offensive in Kentucky, its flagship U.S. facility.

However, it is not the first time its executives have been skeptical of a fully committed electric vehicle push.

Toyota Australia’s VP of Sales and Marketing Sean Hanley said earlier this year that the company’s skepticism regarding EVs is not an “anti-EV” stance, but it is simply the company “being real.”

Toyota laments emerging “anti-EV” moniker: “We are just being real”

“Toyota’s not anti-EV. We’re actually not. And we want to play in that market. We want to be part of it. We’re excited by it. We just don’t see it as the golden bullet or the single golden bullet towards carbon neutrality,” Hanley said. “Some interpret it as Toyota being anti-BEV. No, we’re not. We are just being real. We’re being honest with the market and the position.”

Toyota’s point is interesting, considering where other companies have been put by committing to more aggressive EV efforts. On one hand, climate goals are what the EPA considers to be make or break to reach climate goals. On the other, the biggest companies in the world are being put in awkward positions financially, and are even backtracking on their investments.

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