Toyota (TM) to Convert Its Entire Lineup to Hybrid-Only
Toyota Motor Corporation TM may have been one of the slowest automakers to pivot to the development of electric vehicles (EVs) but it could be the first one to completely stop producing vehicles that run solely on gasoline, per Reuters.
Nearly three decades after the launch of its pioneering gasoline-electric hybrid Prius, the company aims to convert its entire Toyota and Lexus lineup to hybrid-only models. It remains focused on hybrids, challenging the industry trend toward full electrification.
Per Akio Toyoda, chairman of Toyota, EVs will only comprise 30% of the global market, promoting a multi-pathway strategy that includes hybrids, hydrogen fuel-cell vehicles and other emerging technologies.
Per David Christ, head of sales and marketing for Toyota in North America, the automaker is evaluating whether to make all its models hybrid-only, with decisions being made during each model redesign.
The RAV4, with hybrid variants that make up about half of Toyota’s sales, is America’s top-selling SUV. It might soon be offered only as a hybrid, similar to the Camry and other models. This strategy, not previously reported, leverages TM’s dominant position in the hybrid market, especially as EV demand slows due to high costs and charging challenges.
Toyota’s hybrids that don’t require charging and offer seamless power transitions are getting increasingly popular, making up to 37% of TM’s sales, which represents a sharp increase from 9% in 2018. This surge has significantly boosted the company’s profits.
Also, Toyota’s hybrid sales in the United States surged 66% year over year, reaching 438,845 vehicles by Jun 30, while EV sales totaled only 15,107 during the same period.
Per Christ, Toyota anticipates continued growth in hybrid sales, predicting that hybrids will account for more than 50% of the company’s total volume next year.
Toyota has already electrified most of its North American lineup, with nearly every model (except for its performance cars) now offering a hybrid powertrain.
TM’s approach also provides regulatory advantages in the United States, where stricter emissions standards are set to take effect in 2027. The automaker is establishing a battery plant in North Carolina that will have 14 production lines by 2030, with an annual capacity to produce 30 gigawatt-hours of batteries.
As part of its long-term strategy, Toyota plans to invest $35 billion in batteries and EV platforms while continuing to develop hybrids with smaller and more efficient engines. This hybrid-focused strategy will give TM time to develop next-generation technologies while capitalizing on current market conditions.
Story continues
Zacks Rank & Key Picks
TM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM, Blue Bird Corporation BLBD and Douglas Dynamics, Inc. PLOW, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for PLOW’s 2024 sales and earnings suggests year-over-year growth of 6.45% and 60.4%, respectively. EPS estimates for 2024 and 2025 have improved 15 cents and 2 cents, respectively, in the past 30 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Toyota Motor Corporation (TM) : Free Stock Analysis Report
Douglas Dynamics, Inc. (PLOW) : Free Stock Analysis Report
Dorman Products, Inc. (DORM) : Free Stock Analysis Report
Blue Bird Corporation (BLBD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
#Toyota #Convert #Entire #Lineup #HybridOnly