Toyota’s reputation as Japan’s leading automaker could be in jeopardy due to the company’s sluggish sales in the electric vehicle (EV) sector, warns economist Koga Koji. In a recent column titled “Is Toyota really that bad?”, Koga states that “if Toyota does not modify its strategy to be future-oriented, it will lose in fierce global competition, which will lead to Japan’s ultimate demise.”
Koga, a former high-ranking official in the Japanese government’s economic and industrial policies, criticizes Toyota’s announcement last month that it plans to release ten electric vehicle (EV) models by 2026 and sell 1.5 million units annually, calling it “a dreamlike story, far from reality.”
While Toyota maintains a strong position in terms of sales revenue, selling 10.48 million vehicles worldwide last year, its sales in the electric vehicle sector are lagging behind competitors such as Tesla and China’s BYD. In 2020, Toyota sold only 24,000 units in the electric vehicle sector, ranking 28th with a market share of 0.3%. This is less than 1/50th of Tesla’s sales (1.26 million units) and only 1/36th of BYD’s sales (860,000 units).
Koga argues that Toyota’s new strategy to increase electric vehicle sales to 1.5 million units annually by 2026 is unlikely to succeed, as leading EV makers like Tesla and BYD will also significantly increase their production by then. Koga adds that “even Tesla took nine years to increase its annual electric vehicle production from 20,000 units to 1.26 million units. Toyota’s full-scale production of electric vehicles is three years behind even the latecomers to the market, not including Tesla.”
Koga concludes by stating that “Toyota does not yet have the technology to produce a decent electric car,” and warns that if the company does not adjust its strategy accordingly, Japan’s future could be at risk.