Weekly Brief: Toyota CEO Change Playing Catch-Up on BEVs?

Toyota CEO Akio Toyoda will step down in April to make way for new CEO Koji Sato, who currently serves as president of Toyota’s Lexus division.

Toyoda has helmed the carmaker since 2009 through tumultuous times, including the Great Recession and the global pandemic, but has faced mounting pressure for his resistance to the electric vehicle revolution. Guided by Toyoda’s belief that EVs aren’t the future, Toyota failed to bring a single all electric vehicle to the mass market until 2020. That was ‘lightyears’ behind Tesla but, more importantly, significantly lagged other legacy carmakers like BMW, General Motors, Ford, Mitsubishi, Nissan and Mercedes-Benz. When Toyoda finally conceded that an EV was necessary, he backed the hapless bZ4z, which finally showed up in the US in 2022, only to face a major recall because its wheels were falling off. A meager 258 bZ4Xs sold before Toyota announced the recall in June 2022.

Through it all, Toyoda continued to argue that hydrogen cars were better than EVs and that his company had done more to curb global CO2 emissions than any other carmaker, thanks to the Toyota Prius. Meanwhile, Toyota ranked dead last in the 2022 Greenpeace East Asia report and has become a target for climate activists owing to its anti-climate lobbying and allegations of greenwashing. Toyoda would like to be remembered as the grandson of the Toyota dynasty who ushered it sure-handedly into the 21st century. Instead, he’ll probably go down as the guy who landed on the wrong side of history.

“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,” Toyoda told reporters after the bombshell announcement last week. You read that correctly: instead of disappearing quietly into the night, Toyoda is switching seats from CEO to the chairman of the board, which begs the question how much is really going to change here and will it happen fast enough? Most analysts agree that Toyota needs a full shakeup and a rapid acceleration of EV deployment to catch up with its competition.

As for what that shakeup looks like, Toyota could take notes from its in-country rival Honda, which announced last week that it’s creating a new division to house all of its EV activities under one roof. The goal is to accelerate Honda’s electrification business by consolidating resources that presently live in different homes across the company and around the world. The new division will start April 1, 2023 – April Fools’ Day.

Honda, like Toyota, has been skeptical of the EV revolution and lags behind its competition in ways that seriously worry investors. Honda has made more strides than Toyota to play catchup. Last year it announced that it would invest $40Bn in electrification over the coming decade and would launch 30 EVs by 2030. The company has also been working on a new joint venture with Sony to bring EVs to market under the brand name “Afeela.”

This year at CES one of the highlights in Vegas was Afeela’s debut of its first prototype. Then again, Honda still hasn’t brought a single EV to market in North America and is currently borrowing its electric platform from General Motors. Like Toyota, if Honda doesn’t want to get lost in the exhaust of its own internal combustion engines, it better get moving fast.

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