Toyota Chairman Akio Toyoda’s EV Skepticism Gains Ground as Tesla Falters

Akio Toyoda, Chairman and former CEO of Toyota, has long been a vocal skeptic of the electric vehicle (EV) hype, and he’s now asserting that his concerns are vindicated. 

His skepticism led to his resignation as CEO earlier this year, and recent events lend credence to his views. 

Last week, Tesla, the poster child of the EV industry, reported disappointing third-quarter earnings, prompting investors to question the profitability of EVs.

Toyoda has consistently challenged the notion that EVs are the sole solution for achieving carbon neutrality in the automotive sector, stating, “There are many ways to climb the mountain.” Other major automakers increasingly share this perspective.

Lucid has reduced production by 30%, and General Motors has postponed the release of the Chevy Silverado EV by a year.

The Biden administration has strongly supported EVs as part of its climate agenda. 

However, the EV market faces headwinds due to high-interest rates, dampening consumer demand for electric and conventional vehicles. 

Jessica Caldwell, Head of Insights at Edmunds, pointed out that these interest rates are “preventing a lot of people from even getting into the market.”

While EV sales continue to grow, the rate of growth has slowed. In the first half of 2023, EV sales increased by 49% compared to the previous year, a slower pace than the 63% growth seen last year.

Elon Musk, CEO of Tesla and a strong advocate for EVs, faced significant financial setbacks as the company reported its lowest quarterly earnings per share in two years. 

Tesla’s shares plummeted over 17%, resulting in a $138 billion drop in market capitalization in two trading days. 

These events have served as a reality check for the EV industry. Toyoda’s stance on diversifying the approach to carbon neutrality by investing in hybrids, hydrogen-powered vehicles, and other eco-friendly alternatives is echoed by industry players like Ford. Bill Ford, the great-grandson of Henry Ford, has criticized the highly politicized rhetoric surrounding EVs.

General Motors, despite its initial commitment to phase out gas- and diesel-powered vehicles by 2035, has decided to slow down EV production due to decreased demand and labor strikes.

Although the EV market is currently experiencing what experts call “growing pains,” it is widely recognized as the inevitable future of the automotive industry. 

While the transition to EVs is inevitable, the path to full adoption remains uncertain and subject to ongoing debates within the industry.

As the automotive sector navigates this transitional phase, the wisdom of Toyota’s Chairman in urging a diversified approach to sustainability is gaining traction, highlighting the importance of multiple pathways to reduce carbon emissions in the industry.