54 organizations demand Toyota shift to EVs globally as new CEO steps in

A coalition of 54 consumer and environmental groups from 26 countries have written a letter to Toyota asking that the company phase-out fossil fuels globally by 2035, and in Europe by 2030. The letter is timed to coincide with the start of new CEO Koji Sato’s tenure at the company on April 1.

Toyota occupies a commanding role in global auto manufacturing. It is not only the largest company in Japan by a longshot, but also often the world’s number-one automaker (sometimes swapping this title with VW). As a result, the company’s actions can set the tone for the auto industry.

It also carries the respect of manufacturing companies outside of the auto industry, with its famous “kaizen” production methods. Kaizen’s focus on efficiency has influenced manufacturing worldwide – somewhat to its recent detriment, as just-in-time production proved disastrous during COVID-19 supply chain disruptions.

But under CEO Akio Toyoda, Toyota has lagged significantly on electric cars. The company has taken a long time to bring any EV to market, and its first full EV, the bZ4X, didn’t have the best launch. While those kinks have now been worked out after a lengthy recall, the company still sells EVs in very low volume in a world where EVs are becoming more and more front and center in virtually every automaker’s lineup.

Beyond that, and even worse, Toyota has actively worked against electric cars over the last decade. The company has repeatedly spread EV misinformation, including in advertisements and in Japanese schools. It was named one of the most obstructive entities on Earth regarding climate policy, it refused to join international agreements for EV adoption (even though that agreement’s 2040 goal was weak to begin with), and it has joined with anti-environment forces in trying to stop clean air legislation.

As a leader in Japanese industry, Toyota’s (and the rest of the Japanese auto industry’s) intransigence on EVs has led some to warn that Japan’s economy could decline significantly if it doesn’t shape up.

But all of this happened under Akio Toyoda. And Toyota’s inability – or, perhaps more accurately, lack of desire – to adapt to the EV landscape seems to have been a factor in his stepping down. Toyoda seemed to acknowledge that he was unable to lead the company through the level of change needed to adapt for the future, stating:

To advance change at Toyota, I have reached the decision that it is best for me to support a new president while I become chairman.

The incoming CEO, Koji Sato, was previously brand chief at Lexus, where he led Lexus’s electrification efforts. Toyoda picked Sato for his ability to “promote change in an era in which the future is unpredictable.” He begins his tenure on April 1, and has already stated that he wants to get serious about EVs.

Open letter demands change at Toyota – drop fossils by 2035 globally, 2030 in US/EU

To coincide with the beginning of Sato’s tenure, 54 consumer and environmental groups representing millions of supporters in 26 countries have combined to ask that the new CEO, Mr. Sato, “commit to phase out all internal combustion engine vehicles in the U.S. and Europe by 2030, and globally by 2035.” The groups also demand that Toyota end its “anti-climate lobbying” immediately.

The effort was spearheaded by Public Citizen, a US-based nonprofit consumer advocacy group. Other notable signatories include the Japanese chapters of Greenpeace and the Rainforest Action Network, along with the Center for Biological Diversity, Electric Vehicle Association, GreenLatinos, Coltura, EarthJustice, and the Sierra Club. The letter lists the many other groups involved from around the world.

The letter does not mince words. While it does “ask” Toyota for these commitments, it also points out “decades of harm and deceit caused by Toyota” with respect to electric vehicle adoption, including cheating on emissions tests, which led to a record $180 million fine.

The letter points to research that fossil fuels are responsible for millions of deaths per year, accounting for one in five deaths around the globe. Personal vehicles are a primary contributor to this fossil fuel pollution, which harms human health everywhere.

While Toyota has a plan to increase electrification of its fleet, the company currently says that it plans to sell 3.5 million electric cars in 2030. This is only about a third of the company’s current yearly sales, though a huge increase from the 16,000 vehicles, or .2% of its global sales, from its last fiscal year. By comparison, all-electric competitor Tesla sold 1.3 million EVs last year. Even stodgy old GM targets 40-50% electric sales by 2030.

The letter closes by recognizing incoming CEO Sato’s actions to lead Lexus toward electrification, and recent pledges to lead the industry, but requests several specific commitments:

• phase out internal combustion engine vehicles (including hybrids and plug-in hybrids) in the U.S. and Europe by 2030 and globally by 2035;
• align advocacy and lobbying with the goal of phasing out internal combustion engines, and be a voice for 100% renewable energy economy-wide;
• require 100% renewable energy use throughout your supply chains globally by 2035;
• by 2025, sign a procurement commitment for fossil-free primary steel with a steel producer and additionally commit to source 100% fossil-free steel by 2050;
• require responsible sourcing of your battery minerals, and develop battery design that allows for easy reuse and recycling of minerals;
• establish a clear commitment to Indigenous Peoples’ right to Free, Prior and Informed Consent, which should be extended to your suppliers.

City Dwellers’s Take

As I’ve said many times with respect to EV timelines: “Why not sooner?” But this time, this letter’s timeline is one I can actually agree with.

While many regions are looking to put requirements in place for full electrification by 2035, I don’t think this is early enough. Several automakers agree, and are planning to go full electric well before 2035. Jaguar, Alfa Romeo, Lotus, Bentley, Cadillac, Mercedes, Mini, Rolls-Royce, and Volvo have all committed to 2030, so it’s not like this timeline is impossible.

Oh, and of course, there’s one more brand with an all-electric 2030 target: Lexus. Which made the announcement while it was being led by none other than the incoming CEO of Toyota, Koji Sato.

All these automakers are smart to be ready for electrification before regulatory requirements come in. Electrification is happening fast, and once critical mass is reached, the shift can happen quickly. Norway was targeting 2025 for an end to gas car sales, but they’re already at close to zero a few years early.

Besides, electrification has taken several companies by surprise already. It takes time to build battery factories, distribution networks, charging networks, train (and convince) car dealers in how to sell EVs, and so on. Companies could have started on these efforts long ago, but many companies are only starting to build battery factories now. This has led companies with less foresight to be more affected by supply constraints. For one example, just this week, Ford CEO Jim Farley said “batteries are the constraint.”

So a faster route to electrification is not just smarter for every living being on Earth, but smarter for the company. Toyota is very late to the game already, and will have to work extremely hard to catch up. But if the new CEO knows what’s good for Toyota as a businessman, and what’s good for humanity as a human, he’ll put in that effort and realign his company to act responsibly, both for the world and for his shareholders.