As Tesla Stock Plummets, Toyota Chairman Says He Was Right on EVs
As most automakers bet heavily on EVs, Toyota was widely criticized for its more reserved approach to electrification. Now, with Tesla stock plummeting and EV adoption slowing, chairman and former CEO Akio Toyoda says that “people are waking up to reality” that there isn’t a single answer to carbon emission reduction.
Related: Why buy a hybrid?
“There are many ways to climb the mountain that is achieving carbon neutrality,” Toyoda told reporters at the Japan Mobility Show this Wednesday. According to The Wall Street Journal, global EV sales have grown 49% so far in 2023, down from 63% in 2022. While this means EV sales are still growing, the pace was anticipated to accelerate rather than the opposite.
Cooling EV commitments
Because of this slowdown, several American automakers are going back on previous EV commitments. Ford announced it would put the brakes on production of F-150 Lightning pickup trucks. Chevrolet delayed the rollout of its Silverado EV truck by a whole year. GM scrapped plans to build 400,000 EVs in North American through mid-2024.
Meanwhile, the poster-child of American EV manufacturing, Tesla, posted its lowest quarterly earnings per share in two years. After missing an already pessimistic forecast by 10%, its shares dropped 17% almost immediately. In just two trading days, its market capitalization fell by $138 billion.
Why car shoppers aren’t on board
Toyoda says that people are finally seeing reality, but there are confounding effects. GM attributed part of the EV slowdown to the auto strike, while Tesla has suffered from the effects of Elon Musk’s plummeting reputation. Additionally, high interest rates have generally put a damper on the demand for all vehicles, not just those of the electric variety.
Bill Ford, executive chair of Ford Motor, told The New York Times about the politicization of EVs: “Blue states say EVs are great and we need to adopt them as soon as possible for climate reasons,” he said. “Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it.”
To Jessica Caldwell, head of insights at Edmunds, these are just part of the EV industry’s growing pains. “We’re transitioning to a brand new technology,” she told Fortune. “It’s expensive. It requires people to have a different relationship with their vehicle that has been largely unchanged for decades. So to think that everything was going to roll out smoothly and we follow this nice adoption curve, it was a bit unrealistic.”
Currently, Toyota can hardly keep up with demand for hybrids, which it believes are more effective at immediately reducing global emissions. But ultimately, the industry is moving toward EVs, and nobody denies it — not even Toyota. It’s just a matter of how we get there.
Kurt Verlin was born in France and lives in the United States. Throughout his life he was always told French was the language of romance, but it was English he fell in love with. He likes cats, music, cars, 30 Rock, Formula 1, and pretending to be a race car driver in simulators; but most of all, he just likes to write about it all. See more articles by Kurt.