Toyota’s bet on hybrids was mocked, then vindicated. Now it’s trying to repeat the trick with an unlikely bet on the combustion engine

Toyota’s bet on hybrids was mocked, then vindicated. Now it’s trying to repeat the trick with an unlikely bet on the combustion engine

While many automakers predicted an imminent future for electric vehicles, Toyota has made gains by emphasizing hybrids rather than fully electric vehicles — a move that earned it derision before being vindicated over the past year as electric vehicle sales have faltered. Now he’s doubling down with a new take on the traditional car engine.

The world’s largest automobile manufacturer said tuesday that it would develop smaller internal combustion engines that are more optimized for hybrid vehicles and can accept alternative fuels such as biofuels, liquid hydrogen and synthetic e-fuels in an effort to reduce emissions. The CEOs of Subaru and Mazda are also committed to producing new engines, they said Tuesday at a news conference with Toyota CEO Koji Sato.

The new engines, while still primarily gas-powered, will produce more compact, more efficient vehicles with better gas mileage as part of a decarbonization effort that treats “carbon as the enemy.” ”, according to a press release published Tuesday.

Sato said that while the auto industry is focusing on battery-powered vehicles, there is still room for improved combustion engines.

“In order to offer our customers various options to achieve carbon neutrality, it is necessary to meet the challenge of evolving engines in line with the energy environment of the future,” he said in a statement on Tuesday.

Toyota’s move is an extension of the company’s so-called “multi-track” approach, which includes offering consumers a variety of options to reduce emissions from their vehicles, including hybrid and electric vehicles. For years, former Toyota CEO Akio Toyoda wavered on electric vehicles and pushed to diversify its offerings.

After electric vehicle sales almost doubled from 2020 to 2021, then CEO Toyoda warned that an all-electric future for the auto industry “would take longer than the media would have us believe.” In January, Toyoda, now president of the automaker, went further, saying that the adoption of electric vehicles peak at 30% of all car sales.

Toyoda’s unpopular stance drew criticism from investors, analysts and environmentalists, who said the company was wrong to bet against the inevitability of an all-electric future. Amid the pressure, Toyoda resigned as CEO to become president.

After all that, the all-electric future has been a long time coming. Some traditional car manufacturers including Ford had to abandon their ambitious electric vehicle projects. American electric vehicle giant You’re here also quietly lowered its sales targetsfollowing CEO Elon Musk’s warning in January of “notably weaker” sales growth this year.

At the same time, Toyota’s diversification was slowly justified as global sales of electric vehicles have stagnated and customers are turning to hybrids as an alternative. In February, the company raised its net profit forecast to a record $30.3 billion, fueled in part by strong hybrid sales.

The automaker’s actions on the Nasdaq are up 20% since January.

This story was originally featured on Fortune.com

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