Toyota USA will be dialing back on its electric vehicle initiatives as slowing EV sales cast a shadow on the strategy’s future, according to Nikkei Asia. The publication learned the news after speaking with supplier executives close to the matter. One of the ways Toyota will be pumping the brakes on its EV plan will involve delaying an important three-row electric SUV that the company was initially planning to launch in the near future.
Instead, this supposed three-row EV SUV will be delayed until the first half of 2026. According to the sources that Nikkei Asia spoke with, Toyota engineers and designers want to go back to the drawing board on some of the SUV’s key design elements and the slowdown in EV sales in essence relieves any pressure to get the vehicle production-ready, and thus buys them time to put some extra work into researching and developing the model.
Toyota Also Reworking Its EV Production Plans In North America
In addition to this new three-row EV SUV delay, Toyota will be canceling plans to produce some electric vehicles at a North American-based plant that the company was originally investing in to support the initial EV strategy. Toyota initially allocated around $1.3 billion to retool and rearrange its key production facility in Kentucky, the same one home to the North American Camry’s assembly line. But because of the recent change in demand for EVs, Toyota will be restructuring its investment and some of its original EV production plans.
Initially, Toyota had arranged to have another, separate EV SUV model produced in Kentucky with the final product being badged and sold as a Lexus model for the North American market. But instead, Toyota will now produce the vehicle in Japan and is expected to import the models.
Toyota’s initial EV strategy called for the launch of around 10 new EV models by 2026 with an end goal to manufacture around 1.5 million EVs globally by 2026. With the new strategy however, Toyota reduced the production goal to around 1 million globally by the same year.
The ‘Slowdown’ Seen As Temporary, Toyota Expect Sales To Pick Back Up
Though despite the “slowdown” in EV demand, Toyota execs anticipates that the North American EV market will still grow over the long term and is confident that its investments will eventually pay off. It will just be more of a long-term goal and focus, rather than an immediate shift and turnaround. As of now, Toyota seeks to solidify its strategy by looking further down the road and making the right adjustments and moves to make sure there’s better security for the future of its EV investments.
While other companies such as Mercedes-Benz, Ford, Astn Martin, and Porsche all took a few steps back from its EV ambitions, Toyota is the first Japanese automaker to notably slow its efforts on the EV front as well. And although demand has dwindled, Toyota believes that federal tax credits will still play a crucial role in this transition into all-electric vehicles from internal combustion.
Source: Nikkei Asia
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