Toyota cuts EV production target amid global slowdown

Japan’s Toyota Motor Corporation has sharply cut its electric vehicle production target by 30 percent from earlier plans amid slower global electric vehicle adoption, the Nikkei reported on Friday.

Toyota, one of the world’s biggest carmakers, now aims to launch 1 million electric vehicles by 2026, down 30 percent from its previous target, Nikkei reporters have learned.

The 2025 target for electric vehicle production is now at 400,000 units, according to the report.

Toyota has already notified its suppliers of its decision to cut production of electric vehicles, Nikkei reported.

The Japanese auto giant is the latest automaker to go back on commitments to significantly increase production of electric vehicles as the global electric vehicle market has slowed significantly over the past year.

Earlier this week, Volvo Cars said that “changing market conditions and customer demands” had led it to drop its goal of going 100 percent electric by 2030. Instead, Volvo Cars will now aim for 90 percent to 100 % of its global sales volume by 2030. to be composed of electrified cars, i.e. a mix of fully electric and plug-in hybrid models.

Demand for electric vehicles has waned noticeably over the past year, leaving legacy automakers in the U.S., Germany and France struggling with an overcapacity of their electric vehicle models as they realize the transition to fully electrified transportation will take longer than they thought.

Major US and European automakers are scaling back EV production amid overcapacity and rethinking ambitious EV sales targets.

Rising concerns about capital costs for electric vehicles, uncertainties surrounding a number of elections this year, particularly in the US, and a shortage of fast-charging stations are the three key factors slowing EV momentum, the analyst said Goldman Sachs Research Kota Yuzawa in May.

Automakers have bet on hybrids amid slowing demand for electric vehicles.

Ford Motor Company, for example, said earlier this year it was delaying the planned launch of some of its next-generation electric vehicles as it expands its hybrid lineup, the latest sign that consumer adoption of electric vehicles has slowed.

By Charles Kennedy for Oilprice.com

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