Toyota pledges $70 billion to bolster electrification, stock rally

Toyota pledges $70 billion to bolster electrification, stock rally

TOKYO, Dec 14 (Reuters) – Toyota Motor Corp (7203.T) on Tuesday pledged 8 trillion yen ($70 billion) to electrify its automobiles by 2030, half of which will be to develop a range of electric vehicles at battery (BEV). it seeks to tap into a growing market for zero-emission cars.

But the world’s biggest automaker, which is relatively behind on all-electric cars, said it expects annual BEV sales to reach just 3.5 million vehicles by the end of the year. end of the decade, about a third of its current vehicle sales.

That’s less than bigger rivals such as Europe’s No.1 automaker Volkswagen (VOWG_p.DE), which predicted in July that half of its global vehicle sales would be battery-powered cars by that date.

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Despite this, shares of Toyota and Toyota Group companies Tsusho (8015.T) and Denso (6902.T) rallied on Wednesday, driving gains on the benchmark Nikkei 225 (.N225). Toyota advanced 4.06% while Toyota Tsusho and Denso jumped 4.81% and 4.44%, respectively.

Toyota’s announcement comes as traditional automakers increasingly take aim at Tesla Inc (TSLA.O), which has emerged as the most valuable automaker this year. Tesla’s market value reached more than $1 trillion in October, surpassing the combined value of Toyota, VW, Daimler AG (DAIGn.DE), Ford Motor (FN) and General Motors Co (GM.N).

Speaking at a press conference in Tokyo surrounded by more than a dozen planned BEV models, Toyota CEO Akio Toyoda said his company was still pursuing a multi-pronged strategy to reduce carbon emissions. which also includes hybrid cars and hydrogen vehicles.

“We want to leave the choice up to everyone, and rather than what or what we’re going to focus on, we’ll wait a little longer until we understand where the market is going,” Toyoda said.

His company’s plan to introduce a full lineup of 30 BEVs by 2030 goes beyond the 15 models Toyota had earlier announced it would have available by 2025. The Japanese automaker also said on Tuesday that it planned to invest 2 trillion yen in battery production by 2030, up from 1.5 trillion yen announced earlier.

This investment includes $1.29 billion for a new battery plant in North Carolina that will begin production in 2025. Learn more

Electric vehicles still make up only a small share of car sales, but the market is growing rapidly, with new registrations up 41% in 2020 even as the global car market has contracted by a sixth this that year.

In November, Toyota refused to join a pledge signed by six major automakers, including GM and Ford, to phase out fossil fuel cars by 2040. It argued that not all regions of the world would be not ready to switch to green cars by then. Read more

In addition to electrified cars, Toyota is also developing internal combustion engines running on hydrogen. Toyoda said the technology could help save some of Japan’s 5.5 million auto jobs by allowing the automaker to retain supply chains that would disappear with a full shift to electric cars.

($1 = 113.6900 yen)

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Reporting by Tim Kelly; Additional reporting by Kevin Buckland; Editing by Shri Navaratnam and Ana Nicolaci da Costa

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