Toyota Motor Corporation, long regarded as a latecomer in the electric vehicle (EV) race, may now be poised to become the first major automaker to cease production of gasoline-only vehicles, according to Reuters.
Almost three decades after the revolutionary introduction of the Prius, a gasoline-electric hybrid, Toyota is now set on transitioning its entire Toyota and Lexus portfolios to exclusively hybrid models. Rather than following the industry’s rush towards full electrification, Toyota is doubling down on hybrids.
Toyota Chairman Akio Toyoda has expressed skepticism about the global dominance of EVs, predicting they will capture only 30% of the market. Instead, he advocates for a diversified approach that includes hybrids, hydrogen fuel-cell vehicles, and other emerging technologies.
David Christ, Toyota’s North American sales and marketing chief, mentioned that the company is currently assessing whether to transition all its models to hybrids during their respective redesign phases.
The RAV4, America’s best-selling SUV, already has hybrid variants accounting for half of its sales and may soon be offered exclusively as a hybrid, much like the Camry and other models. This strategy, largely unreported until now, capitalizes on Toyota’s strength in the hybrid sector, especially as the demand for EVs faces headwinds due to their high costs and charging infrastructure challenges.
Toyota’s hybrids, which require no external charging and offer smooth power transitions, have seen a surge in popularity, now constituting 37% of its sales, a jump from 9% in 2018. This rise has substantially bolstered Toyota’s profits. In the U.S., hybrid sales jumped 66% year-over-year, reaching 438,845 units by June 30, while EV sales remained modest at 15,107 units.
Christ anticipates that hybrids will make up more than half of Toyota’s total sales volume next year. Nearly every model in Toyota’s North American lineup, with few exceptions, now offers a hybrid variant, aligning with the automaker’s broader strategy.
Looking ahead, Toyota is also positioning itself to meet stricter U.S. emissions standards set for 2027, with plans to build a battery plant in North Carolina capable of producing 30 gigawatt-hours annually by 2030. As part of its long-term vision, Toyota will invest $35 billion in batteries and EV platforms, while continuing to refine hybrid technology with more efficient engines, allowing the company to remain competitive as the automotive landscape evolves.