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(Text/Pan Yuchen, Editor/Gao Xin) Faced with the general trend of automobile electrification, the world's largest automobile manufacturerToyotaThe car seemed to move more resolutely at the intersection where the elephant turned.

Toyota Motor Chairman Akio Toyoda has always been pessimistic about pure electric vehicles. As early as January this year, he said that the global share of pure electric vehicles in the future will only reach 30% at most. On the contrary, Toyota has been lobbying for its "multi-path" strategy, that is, pure electric vehicles, hybrid vehicles, hydrogen fuel cell vehicles, green fuel vehicles and other power paths.

Based on this strategic thinking, the elephant seems to be brewing a major change in North America, Toyota's largest overseas market.

Hybridization is accelerating

According to a Reuters report on August 15, two Toyota executives who wished to remain anonymous revealed that Toyota may stop selling fuel vehicles in the North American market and replace most or even all of its models (includingLexus) to a hybrid model, but no final decision has been made.

Toyota's hybrid models include both gasoline-electric hybrid and plug-in hybrid models. David Christ, Toyota's head of North American sales and marketing, said Toyota is planning to evaluate the prospects of converting its models to hybrid models one by one.

Currently, Toyota (including Lexus) has a total of 34 models on sale worldwide, of which 8 are hybrid models only, and another 8 are fuel-only models.

For example, the best-selling sedan in the United States isToyota CamryThe 2025 model no longer offers a fuel version, while the large SUV Land Cruiser and business MPVSenna, which currently only offers a hybrid version; the best-selling SUV model in the United States, which will be launched in 2026 -RAV4, currently about half of its sales are hybrid models.

Christ said Toyota has not set a deadline for the hybridization of all its models. And because consumers are more sensitive to the price of entry-level models, some models such as pickup trucks and economy cars may take longer to complete the conversion. But he expects Toyota's hybrid sales to continue to accelerate and will definitely exceed 50% of total sales by 2025.

According to data from automotive service agency Cox Automotive, until 2019, hybrid models accounted for less than 3% of total US auto sales. As of now, this proportion has reached 11.3% and is still rising rapidly.

On the other hand, for Toyota, hybrid models only accounted for 9% of its total sales in 2018, but as of June this year, this proportion has reached 37%; in the first half of this year, Toyota's hybrid sales in the United States reached 438,800 units, a year-on-year increase of 66%. In contrast, the sales of pure electric vehicles were only 15,100 units. Therefore, hybrid models are also seen as a key factor in Toyota's push to a record high in profits.

Policy, technology and cost

In the opinion of industry insiders, Toyota's move towards a full hybrid lineup has many considerations, among which increasingly stringent carbon emission policies are the primary factor.

In March this year, the U.S. Environmental Protection Agency (EPA) released the three-stage emission standards for light-duty and medium-duty vehicles for the 2027-2032 model years, involving emissions of greenhouse gases, hydrocarbons, nitrogen oxides (NOx) and PM2.5 particulate matter. Taking greenhouse gases as an example, under the new standards, the industry average emission level of light-duty vehicles by the 2032 model year is 85 grams of carbon dioxide per mile, which is nearly 50% lower than the current 2026 model year standard; the average emission target for medium-duty vehicles is 274 grams of carbon dioxide per mile by the 2032 model year, which will be a 44% reduction compared to the current standard.

The EPA also estimates that automakers can meet the 2032 requirements by increasing sales of pure electric vehicles to 56% of total sales, plug-in hybrid models to 13% of total sales, and traditional combustion engine models to 29% of total sales.

Katsuhiko Hirose, a visiting professor and energy consultant at Kyushu University in Japan and former manager of global powertrain planning at Toyota, estimates that the new regulations will basically require Toyota to use almost all hybrid models around 2030. Toyota's promotion of hybrid models can help it save billions of dollars in regulatory fines and costs, while buying more time to develop electric vehicles or other zero-emission vehicles.

Toyota has adopted a "multi-pronged approach" from the beginning in its layout of electric technology. As early as 1992, Toyota Motor established an electric vehicle research and development department; four years later, it launched a pure electric version based on the best-selling model RAV4, which was earlier than the first mass-produced hybrid model Prius.

However, the upstream and downstream industrial chains were not mature enough at that time, and the supporting industrial facilities, including energy replenishment, were not perfect. In addition, the energy density of early batteries was low, the vehicle charging time was long and the driving range was low. In order to meet the driving range requirements, the capacity of the on-board battery had to be increased accordingly, which further increased the cost of the vehicle.

On the contrary, the Prius, which has no range anxiety, has been very popular in the market and is still one of Toyota's best-selling models in North America. Later, relying on the moat built by hybrid technology, Toyota has entered theCorollaHybrid versions have been launched on mainstream models such as the Toyota Camry and RAV4, which constitutes one of Toyota's core competitive advantages in competing in the global market.

Given this, it seems unsurprising that Toyota executives are prioritizing a more mature, proprietary full-hybrid lineup.

In addition to technology patents, cost is also a major consideration for Toyota's technology path.BYDCompared with Chinese competitors, it does not have the advantages of fuel vehicles in battery technology and cost control. Therefore, the relatively lower-cost hybrid vehicles are given priority over plug-in hybrid and pure electric vehicles.

Stephanie Valdez-Streaty, senior analyst at Cox Automotive, said that the growth of pure electric vehicles will continue in the next few years, but the growth rate will not be as rapid as in the past few years. At the same time, hybrid and plug-in hybrid models will continue to cannibalize the sales of pure electric vehicles because they are more acceptable to fuel vehicle users - compared with pure electric vehicles, the retail price of hybrid vehicles is generally less than $2,000 (about 14,000 yuan) more than that of fuel vehicles, and there is no range anxiety.

Although Toyota's current plug-in hybrid vehicles are often 5,000-6,000 US dollars (about 36,000-43,000 RMB) more expensive than similar fuel vehicles due to high costs, and sales are far lower than oil-electric hybrid vehicles. However, in order to better meet new emission regulations, Toyota also plans to provide more plug-in hybrid models. Currently, Toyota is building a battery factory in North Carolina, USA, and plans to build 14 production lines by 2030, capable of producing 30GWh of batteries per year.

In May, Toyota also unveiled a small prototype internal combustion engine that it said could be paired with a hybrid drivetrain that it said could one day run on biofuels or low-carbon synthetic gasoline. However, according to one of the two sources cited by Reuters, the first hybrid model based on the new platform and engine could be a plug-in hybrid version of the Corolla, which could be launched in China in 2026 and in the United States in 2027.

No standard answer?

"We live in an age where there are no standard answers. Toyota hopes to provide consumers with as many options as possible before the final correct route becomes clear." Akio Toyoda once said that the energy situation in different regions of the world is different, and carbon neutrality requires "diversified choices" because the "enemy" of carbon neutrality is carbon dioxide, not the internal combustion engine.

In fact, in the pure electric track, which Toyota is not good at, announced in 2021 that it would invest US$35 billion (approximately RMB 223 billion) in electric vehicle research and development by 2030, and would launch 30 pure electric models worldwide, with annual sales of pure electric models planned to reach 3.5 million units; it is expected that by 2030, the high-end brand Lexus will achieve full pure electric model sales in major markets such as China, North America, and Europe, with global sales reaching 1 million units; by 2035, pure electric model sales will be fully realized.

However, Toyota's first batch of pure electric models, such as the bZ4X and the bZ3 in cooperation with BYD, have performed poorly in major new energy vehicle markets such as China. No wonder the disappointed Akio Toyoda continues to speak poorly about pure electric vehicles.

Even in April 2023, President Tsuneharu Sato, who had just succeeded Akio Toyoda, announced Toyota's new electrification goal: to launch 10 pure electric vehicles by 2026, with a target sales volume of 1.5 million vehicles, and to launch the next generation of pure electric vehicles. But he also admitted that hybrid and plug-in hybrid vehicles are more conducive to corporate profitability.

Although Toyota's fuel vehicle market share is shrinking sharply in China, the world's largest auto market, facing price competition from local new energy vehicles with rising product power, and both hybrid and pure electric models lack competitiveness in China in the new energy track, Toyota's full hybridization is the most suitable choice for the current market situation in the United States, where the market situation is completely different.

However, as the electrification of the automotive industry continues to affect the market structure, it has become increasingly difficult for Toyota to defend its position as the world's number one:

In the first half of this year, Toyota sold 5.162 million vehicles, a year-on-year decrease of 4.7%, and sales have been declining for five consecutive months. In addition, the vehicle certification test fraud incident that fermented at the end of last year has seriously damaged Toyota's brand image. Just in early August, in order to respond to the recall caused by test fraud, Toyota Motor reduced its global automobile production plan for fiscal year 2025 (April 2024-March 2025) by about 5%; and Akio Toyoda's support rate in the board of directors has also dropped to the lowest level in nearly three years... All kinds of negative factors in recent years may shake the foundation of Toyota's goal of converting hybrid models.

In addition, Toyota's strategy in the North American market is inevitably affected by the US election. Just this July, former US President and Republican candidate Trump, who had just escaped shooting, threatened at the Republican National Convention that he would abolish the electric vehicle policy on the first day after his election. In fact, as early as 2020, Trump pushed for the abolition of the automobile fuel consumption standards set by the Obama administration, reducing the average fuel efficiency of automakers per gallon of gasoline from 5% to 1.5%. For Toyota, with this previous experience, its prospects for promoting hybridization still need time to verify.

This article is an exclusive article of Observer.com and may not be reproduced without authorization.

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