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Toyota's Future: Hydrogen- and Battery-Powered Vehicles

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Despite the supply chain disruptions caused by the COVID-19 pandemic, Toyota Motor Corporation (Toyota) managed to increase its sales and retain its title as the world's top-selling carmaker for three consecutive years from 2020. However, the gradual shift in global market trends toward battery electric vehicles (BEVs) threatened to leave Toyota lagging behind, particularly in China, the United States, and Europe. In response to the threats from BYD Auto and Tesla in Toyota's main markets, Koji Sato was appointed president of Toyota in April 2023. Under Sato's leadership, Toyota announced plans to establish a BEV Factory, with the goal of producing 1.5 million BEVs by 2026. Despite Toyota's commitment to hydrogen fuel cell electric vehicles, exemplified by the Mirai, the company struggled to increase sales in this category due to infrastructure challenges. With Toyota's Hydrogen Factory scheduled to open in July 2023, Sato emphasized Toyota's intention of preserving hydrogen as a viable option for achieving a carbon-neutral society. The company faced the challenge of determining whether it was a solid strategy to develop and maintain both battery and hydrogen options in pursuit of a zero-emissions environment. Both endeavours demanded tremendous financial investments and time-consuming efforts, thus potentially slowing Toyota's battery development. While other carmakers focused solely on BEVs, Toyota's ability to compete in this category once the BEV Factory commenced mass production in 2026 while also investing in hydrogen remained uncertain.
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