achieving the best results in its history

• Toyota made an operating profit of $32 billion

• This is the best performance in history for a Japanese company.

If we look at the size of the company and its statements, there is no company in the auto market that is more strongly opposed to electric vehicles. Toyota, from which we expected a smooth transition to this technology, seeing the good work of its hybrid technology, did not stop defending its position: everything has its time.

The Japanese have repeatedly stated that they do not believe in the electric car as a short-term solution. Yes, they have a roadmap, but their priority is not the technology, which they claim will not exceed 30% market share.

At Toyota, all managers confirmed their intention to offer customers all types of technologies, from electric vehicles to hydrogen vehicles, including hybrids. In fact, they argue that it would be cheaper to invest in buying emissions bonuses from electric vehicle manufacturers than to continue pouring money into a technology that they believe has a ceiling.

And so far this strategy is working. We don’t know if this is correct. Nor will they be outdone by the competition as the electric vehicle picks up speed. Or, on the contrary, we do not know whether all the current advantages allow them to continue to build their future and remain the manufacturer producing the largest number of cars in the world.

Time will show. For now, these are your numbers.

Hybrid as a pillar of the future

The transition to electric vehicles is not easy for Toyota from a commercial point of view. In 2023, the manufacturer released 8.69 million cars onto the streets. Of these, only 0.92% were fully electric vehicles. They even have a cooperation agreement with BYD to launch their cars in China.

Moreover, his Toyota bZ4X was a failure. In addition to being noted as one of the worst autonomy cars on the market (relative to expectations), its production process was a headache, with cars being recalled because a wheel could come off.

Since then, statements about the future of the electric car have become more stringent. In the face of criticism, Toyota defended itself by guaranteeing that they would offer electric vehicles at a price people could afford when the time came, that solid-state batteries would be limited to their most ambitious cars, and that hybrids still had a bright future. .

And thus, with its 1:6:90 rule, the company achieved results in 2023. as if they had never seen in its history. In fact, they have not been seen in any company in the entire history of Japan. Let’s take aim.

As stated in Bloomberg, the presentation of the Japanese results dotted the i’s. Toyota posted an operating profit of $32 billion in 2023, the highest in company and national history for a local company.

They also note in the economic newspaper that their Profit margin 11.9% It is also the best in the industry, rising higher in the battle that Tesla has been fighting in recent years. However, lower car prices have significantly reduced this advantage that Elon Musk’s company has gained.

Toyota is now followed by BMW and Stellantis as the brands that make the most profit per vehicle sold. Over the course of a year, the situation has changed. Mercedes ranks fourth, but in 2022 it was the second-most profitable brand in the world. The first, as we have already said, was Tesla, which dropped to sixth position in 2023. Hyundai slipped between the Germans and the Americans.

The Japanese company is now reaping all the benefits of investing in a hybrid car. According to the company, the cost of producing a hybrid vehicle is now six times lower than it was when the Toyota Prius debuted in the 1990s. In fact, back then they said they were losing money with every Prius they sold. Now they are making more money than ever with each of them.

And the economic and social context seems to be on their side. At least for now. Toyota assures that the market uncertainty, the customer chooses a hybrid before any other technology. Japanese data confirms this. Every third car sold is a hybrid. In addition, in 2023, 3.59 million units of cars of this type will be released onto the market. They plan to reach 4.48 million units in 2024.

As we said, the question is whether Toyota is missing an opportunity for an electric vehicle. This is something that time will tell. Back in the day, Toyota was losing money with every hybrid they sold, and the question is whether they should follow the same strategy with an EV to reap what they sow in the future, just like they are doing now.

At the moment they don’t seem to have any intentions.

The numbers back them up.

Time will show.

Image | Toyota

In Hatak | While the world is in a breakneck race for electric vehicles, Japan is moving at its own pace: the innovator’s dilemma