Toyota, along with other major automakers such as Volvo, Mercedes-Benz, General Motors, and Ford, appears to be scaling back production of electric vehicles (EVs). This is in response to slower than expected EV sales in recent years.

The EV revolution, led by major automotive companies, has highlighted fundamental issues hindering the transformation of the global industry. Differences in EV adoption rates around the world, supply chains still recovering from the pandemic, and challenges in meeting demand for key components such as lithium and cobalt have complicated the industry landscape.

Government subsidies for EVs, which are beginning to wane in some key markets amid economic uncertainty, pose additional challenges. Meanwhile, the lack of EV charging infrastructure in several regions continues to be a barrier for consumers to switch to electric vehicles.

Toyota

Toyota plans to reduce its EV production next year, lowering its target from 1.5 million units in 2026 to 1 million. The move follows Volvo's decision to scrap its goal of becoming a fully electric automaker by 2030.

Although Toyota claims its long-term plans remain unchanged, global automakers face challenges from the rapid growth of Tesla and cheaper EV alternatives from China. Toyota, along with other Japanese manufacturers, remains focused on hybrid vehicles due to consumer uncertainty about range, battery prices and charging infrastructure.

Ford 

In August, Ford reduced its investment in EV from 40 percent to 30 percent. This decision was accompanied by the cancellation of plans for a large three-row electric SUV and the delay of an electric pickup truck launch, indicating a shift in the company's focus to hybrid models.

The U.S. auto giant appears to be scaling back its EV ambitions, having recently announced the cancellation of its large electric SUV project and the postponement of its electric pickup truck launch.

Volvo

Volvo recently abandoned its plan to become a fully electric carmaker by 2030, and now aims to have 90% to 100% of its lineup be fully electric or plug-in hybrids, with the remaining 10% being mild hybrids.

This strategic shift is attributed to the slow development of charging infrastructure, reduced government incentives and new tariffs on electric vehicles. By 2025, Volvo expects 50-60% of its sales to be electrified vehicles.

Mercedes-Benz

Mercedes-Benz announced that it will extend production of its A-Class hatchback (a gasoline-powered mini MPV) until 2026 due to concerns about the adoption of electric vehicles. CEO Ola Källenius stated that the company will continue to produce internal combustion engine vehicles into the next decade, as price parity between electric and gasoline vehicles is still a long way off.

In addition, Mercedes-Benz expects electric vehicle sales, including hybrids, to account for up to 50% of total sales by 2030, five years later than previously expected, and has also slowed its plans to expand battery cell capacity.

General Motors

In June, General Motors (GM) lowered its electric vehicle production forecast for 2024. Initially, GM aimed to produce 400,000 units annually by the end of 2023, but this target was pushed back to early 2024 and later revised to 200,000 to 250,000 units by the end of this year due to lower-than-expected demand.

In addition, GM has shifted its strategy by reintroducing plug-in hybrid electric vehicles (PHEVs) to the North American market after previously planning to transition directly from internal combustion engine (ICE) vehicles to battery electric vehicles (BEVs).

Source:

• https://www.reuters.com/business/autos-transportation/volvo-cars-scales-back-electric-vehicle-ambition-2024-09-04/
• https://www.bbc.com/news/articles/c3ejye39434o
• https://www.ntnews.com.au/technology/automakers-scale-back-ev-targets-as-demand-slows/news-story/3cda02e97a38eb07c0f1be3930f22773#:~:text=The%20global%20supply%20chain%20is,in%20an%20uncertain%20economic%20climate.
• https://gmauthority.com/blog/2024/09/gm-rival-toyota-scaling-back-ev-output-target-by-one-third/