Toyota President Akio Toyoda’s recent comments seem to reflect a shift with the auto industry. Toyoda mentioned that the silent majority of the auto industry is questioning whether electric vehicles (EVs) should be pursued exclusively.
Toyoda’s comments come close on the heels of KPMG’s annual auto survey that revealed that auto executives are less optimistic about EV adoption than they were a year ago. The KPMG report shows that rising inflation and supply chain have added to concerns, and most are bearish about EV adoption rates.
Recently, Mercedes Benz CEO Ola Kallenius mentioned that the future is EV and the world will soon transition into an electric future.
Toyota President’s Prediction on EV Adoptions
Toyoda expressed doubts about how quickly car companies can transition into producing only EVs and the rising cost of raw materials.
“People involved in the auto industry are largely a silent majority,” Mr. Toyoda said to reporters during a visit to Thailand. “That silent majority is wondering whether EVs are really OK to have as a single option. But they think it’s the trend so they can’t speak out loudly.”
While General Motors and Honda have all set timelines for completing their EV transitions, Toyota is yet to fix a date. And Toyoda explains why. Toyota has adopted a mixed approach, building hydrogen-powered vehicles, along with hybrids and EVs.
He revealed that he believes automakers should not limit themselves to just one option, as the right answer on how to move forward is still unclear.
For most car manufacturers, fossil fuel-based vehicles still drive the majority of their businesses. The sharp pivot to EVs has been taxing on most automakers and Toyoda wants automakers to transition slowly.
Auto executives expect the uptake on EVs could be uneven for some time, and that fossil fuel-powered models, along with hybrids and plug-in hybrids, will endure for many years to come.
Toyoda is of the opinion that even hybrid vehicles can have a large impact for now, the trick is in mass adoption of these vehicles. He also suggested that having a mixed line-up might be better for different cars. Furthermore, he highlighted the fact that EVs are cleaner depending on where and how electricity is produced.
Toyoda’s feelings about EVs have been echoed by many others in the Japanese automotive industry.
In 2021, the Japanese car manufacturer revealed plans to spend up to $35 billion on its EV lineup by 2030. The president’s cautious approach has worried some investors who think that the car company might fall behind its peers in launching full EV models.
The KPMG Auto Survey and Future
Of the more than 900 automotive executives who took part in the annual global auto survey by KPMG, the international consulting and accounting firm reports 76% are concerned that inflation and high interest rates will adversely affect their business next year. In just the US, the figure stood at 84%.
Although the outlook remains grim over 50% of executives are convinced that EV adoption rates will improve down the line, especially in the US.
KPMG’s annual auto survey 2021 also found that executives expect around 50% of all new vehicle sales to be all-electric by 2030. Most companies have put processes in places to achieve this milestone.
“There seems to be more general optimism toward EVs than even 12 months ago. This is probably due to the billions of dollars of freshly committed capital and the bevy of new vehicles coming into the market. That said, our survey shows a very wide range of opinions on 2030 market share,” said Gary Silberg, KPMG global head of automotive.
For many potential EV buyers, access to charging stations, during long travels, remain a challenge. A better network of EV chargers and affordable vehicles could result in an uptake in EV adoption.
In KPMG’s 22nd annual Global Automotive Executive Survey, most auto executives are optimistic that the auto industry will see profitable growth in the next five years, while around 38% are deeply concerned about the effect of rising costs on profits.
Although EV adoption seems to be on the rise, high inflation and the increasing cost of raw materials coupled with supply chain issues, could push back adoption rates. Only time will tell how the economic climate coupled with a changing awareness will shape the auto industry.
