Toyota Motor Corp. aims to have half of its global sales come from electrified vehicles by 2025, five years ahead of schedule, and has said it will tie up with Chinese battery-makers to accommodate an accelerated shift to electric power.
The change illustrates both the breakneck growth in the electric vehicle (EV) market — which is transforming the global auto industry — and an acknowledgment by Japan’s top automaker that it may not be able to meet demand for batteries on its own.
There “may be a gap” between Toyota’s battery needs and what it can produce, as stringent emissions regulations expected in Europe, Japan and China fuel demand, Executive Vice President Shigeki Terashi told a briefing.
Toyota said Friday that it would partner with leading Chinese battery-maker Contemporary Amperex Technology Co. (CATL), as well as Chinese EV-maker BYD Co., for supplies.
The major automaker is expected to achieve its goal of selling over 5.5 million electrified vehicles a year including hybrid models by 2025, five years earlier than the initial target, of which more than 1 million will be EVs or fuel cell vehicles, company officials said.
The firm also announced an ultra-compact two-seater designed for daily errands and short-distance business trips, with a maximum speed of 60 km (37 miles) per hour and a range of 100 kilometers on a single charge. The automaker will start selling two-seater EVs and other types of micro EVs in its home market next year.
However, Terashi noted that while demand for EVs accelerates, profitability will be slower to arrive. EV technology has come a long way since 2010, but it is still a challenge to create a profitable business for them, he added.
Hybrid vehicle sales volumes are projected to be less than battery EV volumes by 2025, with the latter expected to still be fewer than 1 million vehicles, he said.
Toyota has led in technologies for hybrid and fuel cell vehicles, but it has trailed rivals such as Nissan Motor Co., Volkswagen AG and Tesla Inc. in bringing fully electric vehicles to showrooms.
It has been developing its own lithium-ion EV battery technology for decades, and has teamed up with Panasonic Corp. to pool together resources to develop and manufacture rectangular-shaped prismatic batteries in the coming years.
On Thursday, it announced it was teaming up with Subaru Corp. to jointly develop a battery-electric SUV on a platform produced together as they seek to split development costs.
CATL has built relationships with other Japanese automakers, including Honda Motor Co. and Nissan. It also signed a multibillion dollar battery supply deal with Volvo Car Group in May.