Photo: Toyota | Edited
Recently, Akio Toyoda surprised everyone when he announced stepping down as Toyota’s CEO and president. His successor Koji Sato, who led the Lexus brand, wants to turn Toyota into an EV powerhouse, a marked departure from the company’s past strategy. Sato promises a drastic strategy change to reinvent the world’s largest carmaker.
Toyota is considered by many the Nokia of the automotive industry, the next big company to fail because it doesn’t see fundamental changes happening in the market. While the world embraced electric vehicles and traditional carmakers scrambled to adapt to the new reality, Toyota insisted that EVs are overhyped. Not only that, but it tried to stifle EV adoption for everyone via lobbying efforts to compensate for its short-sightedness. When it became clear that didn’t work, Akio Toyoda surprised everyone with an overwhelming EV strategy, with more than 30 EVs slated to launch by 2030.
Since then, Toyota’s relationship with electric vehicles has been inconsistent. One year later, the Japanese carmaker has only one EV in production, the bZ4X. It is also a complete failure, not only as an electric vehicle but as a car, considering that its wheels fall off. From time to time, Toyota either announced new EV plans or insisted they were crap, all at the same time, confusing its customers and investors alike. This was the atmosphere at the company when Akio Toyoda announced his surprise departure.
The new CEO Koji Sato will take over on April 1, but he wants all to know that he is no joke. Sato pledged to drastically revamp the carmaker and reinvent it as an EV-first mobility company. The upcoming CEO announced his new team on Monday and promised to accelerate EV rollout, starting with the luxury brand Lexus. Sato also talked about Toyota’s new electric-only architecture, which is expected to arrive in 2026.
Koji Sato talked about a three-pronged strategy comprising a ramp-up of EV development, strengthening its software-first initiatives, and focusing on achieving carbon neutrality in Asia. Although Sato’s message conveyed a new sense of urgency, he still promised to stick with the diverse powertrain strategy pioneered by Toyoda. This means continuing investments in hybrid, plug-in hybrid, and hydrogen powertrains in addition to electric vehicles.
The first step of Sato’s strategy is rethinking Toyota’s EV plans, and he said he intends to impose a “BEV-first” mindset at the company. The overhaul will start with Lexus, which was already slated to go fully electric worldwide by 2035. Sato said Lexus will sell 1 million EVs globally by 2030, while Toyota as a whole is targeting sales of 3.5 million EVs in the same timeframe. That’s a very ambitious plan, considering the Japanese automaker sold less than 24,500 EVs in 2022.
Toyota needs to completely rethink its engineering and manufacturing operations to compete with the EV leader Tesla. The fact that its new EV architecture only arrives in 2026 doesn’t look very promising for Toyota. It may be only two years from now, but the automotive landscape changes a lot faster now than it did when Toyota built its empire. Tesla is already making much more money per car than Toyota and intends to make even more with Project Highland.
What is certain is that Sato has a very difficult task ahead. And even though he is determined to change the mentality at Toyota, he might not be allowed to do so. In his departure speech, Akio Toyoda hinted at his failed attempts to modernize the company. “The new team can do what I can’t do,” he said without offering more details. Let’s hope he is right and Sato will be offered more leeway in pursuing his EV strategy. Or we will have another Nokia in our lives.
Since then, Toyota’s relationship with electric vehicles has been inconsistent. One year later, the Japanese carmaker has only one EV in production, the bZ4X. It is also a complete failure, not only as an electric vehicle but as a car, considering that its wheels fall off. From time to time, Toyota either announced new EV plans or insisted they were crap, all at the same time, confusing its customers and investors alike. This was the atmosphere at the company when Akio Toyoda announced his surprise departure.
The new CEO Koji Sato will take over on April 1, but he wants all to know that he is no joke. Sato pledged to drastically revamp the carmaker and reinvent it as an EV-first mobility company. The upcoming CEO announced his new team on Monday and promised to accelerate EV rollout, starting with the luxury brand Lexus. Sato also talked about Toyota’s new electric-only architecture, which is expected to arrive in 2026.
Koji Sato talked about a three-pronged strategy comprising a ramp-up of EV development, strengthening its software-first initiatives, and focusing on achieving carbon neutrality in Asia. Although Sato’s message conveyed a new sense of urgency, he still promised to stick with the diverse powertrain strategy pioneered by Toyoda. This means continuing investments in hybrid, plug-in hybrid, and hydrogen powertrains in addition to electric vehicles.
The first step of Sato’s strategy is rethinking Toyota’s EV plans, and he said he intends to impose a “BEV-first” mindset at the company. The overhaul will start with Lexus, which was already slated to go fully electric worldwide by 2035. Sato said Lexus will sell 1 million EVs globally by 2030, while Toyota as a whole is targeting sales of 3.5 million EVs in the same timeframe. That’s a very ambitious plan, considering the Japanese automaker sold less than 24,500 EVs in 2022.
Toyota needs to completely rethink its engineering and manufacturing operations to compete with the EV leader Tesla. The fact that its new EV architecture only arrives in 2026 doesn’t look very promising for Toyota. It may be only two years from now, but the automotive landscape changes a lot faster now than it did when Toyota built its empire. Tesla is already making much more money per car than Toyota and intends to make even more with Project Highland.
What is certain is that Sato has a very difficult task ahead. And even though he is determined to change the mentality at Toyota, he might not be allowed to do so. In his departure speech, Akio Toyoda hinted at his failed attempts to modernize the company. “The new team can do what I can’t do,” he said without offering more details. Let’s hope he is right and Sato will be offered more leeway in pursuing his EV strategy. Or we will have another Nokia in our lives.
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