Toyota CEO Akio Toyoda, who has been leading the company since the global financial crisis, is stepping down amid mounting pressure as the industry moves to electric vehicles.
Toyoda, the 66-year-old grandson of the company’s founder has been one of the most outspoken critics of going all in on electric vehicles despite the rest of the industry moving forward.
Instead, he has continuously stood by his hybrid approach, which includes hybrid, fuel-cell, and even gas vehicles. Toyota’s most highly anticipated release last year was its 5th generation Prius, which, despite the additional all-electric range, is “becoming the best CD player in a world moving to iPhones.”
As a result of its efforts (or lack thereof) in fully electric, zero-emission technology, Toyota ranked among the world’s most obstructive companies in 2022, with oil giants like ExxonMobil.
Toyota’s first electric vehicle, the bZ4X, resumed sales in October after concerning safety recalls derailed its rollout. While many automakers are already achieving double-digit EV sales, Toyota generated less than 1% of total US sales from zero-emission vehicles, selling a mere 1,220 units last year.
Toyota has one of the least developed supply chains for reducing carbon emissions, even going as far as lobbying against anti-climate policies. For this reason, the automaker has become the target of climate activists across the globe. Even other automakers are taking jabs at Toyota, such as Polestar’s head of sustainability, when questioned about Toyota’s hybrid strategy, said:
It’s not possible. We cannot continue using fossil fuels.
As the pressure builds for an all-electric future, Toyota may be heading in a new direction as Toyoda steps down, handing the reigns to a new CEO tasked with bringing the company into the modern era.
Toyota CEO steps down as electric vehicles become focus
Toyota will pass the baton to 53-year-old Lexus chief branding officer Koji Sato. The longtime CEO told reporters:
To advance change at Toyota, I have reached the decision that it is best for me to support a new president while I become chairman.
The change Toyoda is looking to advance is in regards to electric vehicles and navigating the industry moving forward. In a newscast, Toyoda announced one of the reasons he appointed Sato was due to his ability to “promote change in an era in which the future is unpredictable.”
The company’s new CEO, that takes over in April, addressed the transition, saying:
We would like to demonstrate this commitment [to make cars better] through concrete actions and products, such as accelerating the shift to electrification and engaging in car-making that responds to diverse values and local needs.
Toyoda will remain with the company as chairman of the board of directors after Takeshi Ichiyamada resigned from his position.
Can Toyota’s new CEO drag it out of the past and into the modern era? That’s what direction it seems the company is trying to take here.
Top comment by Carpe Diem
Meanwhile, Tesla had more than double Toyota's net profit in Q4 2022, after beating their profit in Q3 off of 1/8th the # of vehicles sold.
Following Honda’s announcement earlier this week that it’s overhauling its business strategy to focus on electric vehicles and become “a company society wants to exist in the electrified era,” another Japanese automaker is seemingly changing its stance.
After seeing the continued success of EV makers like Tesla and BYD, reports have suggested Toyota is considering building an EV platform from scratch. For its current electric vehicle, the bZ4x, the company uses a modified gas car platform called the e-TNGA.
A new dedicated EV platform would help the company streamline production and better compete in the new EV era. We’ll see in which direction the new CEO takes it, but from his comments, he seems more open to the idea of an electric future.
He will have to act fast if he wants the company to compete in the new era of electric vehicles, with most automakers already lightyears ahead in terms of EV production. With zero EVs under his belt, Sato may have a difficult road ahead.
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