Toyota Whiffed on Electric Vehicles. Now he’s trying to slow their ascent

Executives at Toyota had a moment of inspiration when the company first developed the Prius. That moment, apparently, has long passed.

The Prius was the world’s first mass-produced hybrid car, years ahead of its competition. The first model, a small sedan, was classic Toyota—A reliable vehicle tailor-made for commuting. After a major overhaul in 2004, sales took off. The Prius’ Kammback profile was instantly recognizable, and the car’s combination of fuel economy and functionality was unparalleled. People grabbed them. Even celebrities looking to spruce up their ecological reputation were won over by the car. Leonardo DiCaprio appeared at the 2008 Oscars in one.

As the Prius’ hybrid technology refined over the years, it began to appear in other models, from the small three-row Prius c. mountain dweller. Even the company’s luxury brand, Lexus, has hybridized several of its cars and SUVs.

For years Toyota has been a leader in green vehicles. Its efficient cars and crossovers offset the emissions of its large trucks and SUVs, giving the company a fuel efficiency advantage over some of its competitors. In May 2012, Toyota had sold 4 million vehicles in the Prius family around the world.

Next month, You’re here presented the Models, which dethroned Toyota’s hybrid as a leader in green transportation. The new car has proven that the long range electric vehicles, although expensive, could be both practical and desirable. Advances in batteries promised to lower prices, ultimately bringing electric vehicles to price parity with fossil fuel vehicles.

But Toyota misunderstood this You’re here represented. While Toyota invested in Tesla, it saw the startup not as a threat but rather as a small player who could help Toyota fulfill its EV mandates. In some respects, this view was justified. For the most part, the two did not compete in the same segments, and Toyota’s global volume eclipsed that of the small American automaker. Plus, hybrids were just a stopgap until Toyota’s hydrogen fuel cells were ready. At this point, the company believed that the long range and rapid refueling of hydrogen vehicles would make electric vehicles obsolete.

Obviously, Toyota did not understand the subtle change that was taking place. It’s true that hybrids were a bridge to cleaner fuels, but Toyota overestimated the length of that bridge. Just like Blackberry rejected the iPhone, Toyota rejected Tesla and electric vehicles. Blackberry believed the world would need physical keyboards for many years to come. Toyota believed the world would need gasoline for several decades to come. Both were wrong.

By focusing on hybrids and betting its future on hydrogen, Toyota now finds itself in an awkward position. Governments around the world are preparing to ban fossil fuel vehicles of all kinds, and they are doing so much sooner than Toyota expected. With prices for electric vehicles falling and charging infrastructure expanding, fuel cell vehicles are unlikely to be ready on time.

In an effort to protect its investments, Toyota has lobbied intensely against battery electric vehicles. But is it already too late?

Hydrogen dead end

After spending the past decade ignoring or rejecting electric vehicles, Toyota now finds itself lagging behind in an industry that is rapidly preparing for an electric, not just electrified, transition.

Toyota’s fuel cell vehicle sales haven’t set the world on fire — the Mirai continues to be a slow seller, even when paired with thousands of dollars worth of hydrogen, and it’s unclear whether his seductive but slow redesign will help. Toyota’s forays into electric vehicles have been timid. The first efforts focused on solid state batteries which, although lighter and safer than existing lithium-ion batteries, have proven difficult to manufacture cost-effectively, as have fuel cells. Last month, the company announced that it would launch more traditional electric vehicle models in the coming years, but the First will not be available until the end of 2022.

Faced with a losing hand, Toyota is doing what most big companies do when they find themselves playing the wrong game: is fight for a game changer.

Toyota has lobbied governments to relax emissions standards or oppose the phase-out of fossil-fueled vehicles, according to a New York Times report. Over the past four years, Toyota’s political contributions to U.S. politicians and PACs have more than doubled. These contributions have also put the company in hot water. By donating to members of Congress who oppose tougher emissions limits, the company legislators funded who opposed the certification of the 2020 presidential election results. Although Toyota promised to stop doing so in January, it was caught making donations to controversial lawmakers as recently as the last month.

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