Toyota to outshine rivals as more consumers opt for hybrids amid EV slowdown
TOKYO/SAN FRANCISCO — When Tony Le set out with his wife to buy a new car last year, he looked at Tesla and other allelectric models.
In the end, the 37-year-old Modesto, California, tech worker opted for a Toyota RAV4 Hybrid due to worries over getting stranded with a purely electric vehicle (EV), a dead battery, and no charging station in sight.
Mr. Le is among the growing number of consumers accelerating hybrid vehicle sales, leaving long-time hybrid maker Toyota Motor in pole position to lap rivals who have been making a rapid transition toward full electrification and now grapple with weakening EV demand.
High interest rates and an uncertain economic outlook have also prompted many EV makers to cut their production targets and warn of slowing sales growth in recent weeks.
Toyota, however, is expected to offer a more upbeat outlook when it reports its earnings on Tuesday, helped by its heavy reliance on hybrids, which accounted for around one-third of its total sales of more than 10 million vehicles last year.
Toyota has already said the next generation of the Camry will come only as a hybrid, its boldest move yet to push the technology it pioneered with the Prius, introduced more than a quarter century ago.
Despite the near-term sales boost Toyota is expected to report, analysts warn a major risk facing the world’s top-selling carmaker is that it remains a laggard in pure battery EVs, which are widely viewed as making up the longterm future of the auto industry.
Toyota sold just 104,000 battery EVs last year, less than 1% of its total sales, including of its luxury Lexus brand. It plans to boost shipments to 1.5 million EVs by 2026, below Tesla’s 2023 shipments of 1.8 million vehicles.
US hybrid sales have been rising as consumers balk at high EV prices and are anxious about the range of electric cars, especially in more rural areas, where there could be long distances between charging stations.