Toyota’s hybrid models have been extremely successful, so you would think the automaker would be quick to embrace full electrification like some of its competitors. However, the automaker seems to be taking a somewhat controversial approach to EVs, and a leaked dealer document about the brand’s electrification strategy lays out exactly why.
A Toyota dealer contact sent me this PDF that was sent directly by Toyota corporate to explain to the dealer network why they should expect to see more hybrids on their lots and not so many EVs or PHEVs.
Essentially what Toyota is saying here is that sourcing the materials for batteries is going to dramatically increase and therefore the costs and difficulty of getting those materials will subsequently rise. The automaker’s position is that those materials can be turned into a lot more hybrids at more affordable price points versus PHEV and EV models.
Toyota also makes the point that the charging infrastructure in the U.S. right now still has a long way to go before it can handle a proliferation of full EV models on the roadways. The other hurdle for most Americans is that EVs and PHEVs can be expensive compared to their gas or hybrid counterparts. Now that the Inflation Reduction Act has eliminated a substantial chunk of EV/PHEV vehicles that qualify for the tax credit, dealers and automakers are reporting a reduced interest in those vehicles.
I can tell you from my own experience as a professional car shopper, I was getting a lot of requests for cars like the Kia EV6 and Hyundai Ioniq5 when those vehicles first launched and they still qualified for the $7,500 credit. Now that the rules have changed, customers don’t find them to be good values anymore. On the other hand, customer interest in standard hybrids like the all-new Prius is growing. I’ve recently gotten more inquiries on that new Prius than at any point in time in my career when I compare it to the previous generations of Prii. I also have clients willing to wait upwards of 9-12 months to score a Sienna because it’s a hybrid minivan, as compared to an Odyssey that can be sourced now.
Of course, Toyota still offer EV and PHEV models; the bZ4X is off to a slow start while the RAV4 Prime continues to be a hit. The automaker is known for a cautious approach to the market and has historically taken an “if it ain’t broke, don’t fix it” product strategy. While the future might be electric, for the time being, it seems like the majority of car buyers want something in between.
Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to Tom@AutomatchConsulting.com