Elon Musk, CEO of Tesla. ODD ANDERSEN/AFP via Getty Images
Elon Musk, CEO of Tesla, doesn’t think much of hybrid vehicles. Last year he did dismissed her as a “phase” and said it was “time to move on.” But Toyota has stepped up its game again – and this step has proven to be groundbreaking.
According to the Wall Street Journal, hybrid sales soared in 2023, rising 48% in the first three quarters compared to the same period last year. Last year, hybrid sales fell about 6% compared to 2021.
“It’s a red-hot market,” David Christ, sales manager for Toyota’s North American business, told the newspaper, adding that Toyota is making as many hybrid vehicles, which save fuel by combining a gasoline engine with an electric motor, as possible.
Meanwhile, demand for electric vehicles has declined. The market is still growing, but the pace of growth has slowed significantly. After growing 63% globally in the first half of last year, they rose just 49% in the same period this year, the Journal reported.
That’s causing automakers to rethink their investments in electric vehicle production, including GM and Ford. Part of the problem is that the first wave of buyers have already purchased their electric vehicles, and the next group of potential buyers is less willing and more price sensitive.
“A large number of people are living paycheck to paycheck, and when they have a lot of debt, they have credit card debt and mortgage debt,” Musk said on a third-quarter earnings call last month. “We need to make our cars more affordable.”
His comments came as Tesla reported its lowest quarterly earnings per share in two years, 10% below analysts’ already negative forecasts.
Ford, meanwhile, reported a 41% increase in hybrid sales in the third quarter – significantly outpacing electric vehicle sales – and expects those sales to quadruple over the next five years.
All of this gives Toyota Chairman and former CEO Akio Toyoda, a long-time skeptic of the electric vehicle hype, a sense of vindication. He has long believed that the industry should hedge its bets on electric vehicles by continuing to invest in hybrids and hydrogen-powered cars.
“People are finally seeing reality,” he said recently.
A little over a year ago, he told dealers gathered in Las Vegas that electric vehicles are “simply going to take longer than the media would have us believe…Toyota is a department store for all types of powertrains.” It’s not right that the department store says, “This is the product you should buy.””
Last year, Toyoda resigned as CEO amid calls from investors for Toyota to invest more in all-electric vehicles.
“Toyota is not responding properly to market demands to take the lead in electric vehicles,” Satoru Aoyama, senior director at Fitch Ratings, told the Financial Times in October last year, warning the company could “lose investor confidence.” .
As it turned out, more trust was deserved, not less.