Toyota Motor North America CEO Ted Ogawa expects battery electric vehicles (BEVs) to account for only approximately 30% of the U.S. new-vehicle market by 2030. This is half of the target currently set by the Environmental Protection Agency for 2030.
Why It Matters: “We are respecting the regulation, but more important is customer demand,” Ogawa said in an interview with Automotive News.
The company will adjust its strategy to align with consumer preferences, he said, even if it means purchasing credits to meet regulatory requirements. “Wasted investment is worse than the credit purchase,” he added.
Toyota is presently facing flak from select segments for its strategy of offering a multitude of fuel choices instead of transitioning fast to electric vehicles. In a lecture in January, Toyota Motor Corp Chairman Akio Toyoda said that the important thing is not to convert to a battery electric vehicle. “The enemy is CO2. So, let's all think about reducing CO2 right away," he said.
The Chairman further expressed concerns over limiting the transportation options of over a billion people globally who lack electricity. He argued that the decision should be consumer-driven rather than being dictated by regulations or political influence.
Concerns About Competition From China: Like other U.S. automakers, Toyota too is concerned about Chinese automakers entering the U.S. market via the neighboring state of Mexico.
“Their product is so competitive, including the tariffs in Mexico”, Ogawa said. “Our dealers ask us every day (how we will compete with China in the U.S.) Still, we have the better product. However, it’s unclear how to keep competitiveness in terms of the MSRP or price area.”
Chinese automakers presently do not have a significant market in the U.S., partly due to the high tariffs imposed on vehicle imports from China.
However, major U.S. automakers have been flagging concerns about Chinese EV makers entering the domestic market via neighboring countries like Mexico in a bid to evade the high tariffs.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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