Toyota lowers 2026 electric vehicle target by 30% amid sluggish sales

Toyota Motor Corp. has lowered its global production target for electric vehicles for 2026 by around 30 percent, saying it now aims to produce around 1 million units, amid slowing demand for all-electric cars, sources familiar with the matter said Friday, Kyodo reports. 

The move comes as sluggish sales of EVs are pressuring global automakers to reconsider their strategy. Volkswagen AG said recently it is considering closing some of its factories in Germany while Volvo Cars said it has abandoned its target to sell only fully electric vehicles by 2030.

Toyota has notified its parts suppliers of the new target.

In April 2023, Toyota President Koji Sato said he planned to sell 1.5 million EVs by 2026 in a major strategy shift for the automaker, which had been reluctant to embrace the technology.

The global EV market initially experienced explosive growth thanks to popular models made by Tesla Inc. and China's BYD Co. But sales in the segment have slowed as battery-driven cars failed to gain traction beyond early adopters due to their high cost and a lack of charging stations.

The outlook for the EV market is also overshadowed by intensifying price competition in China, where local brands are eroding the market share of foreign manufacturers with more affordable EVs.

Toyota sold around 104,000 EVs in 2023, more than four times what it sold a year earlier but significantly paling in comparison with its total vehicle sales of over 10 million units.

In contrast, its hybrid cars are in high demand as gasoline-electric vehicles are increasingly seen as a practical solution to drive carbon neutrality.

Toyota will respond to market demand flexibly, with a plan to ramp up production of plug-in hybrid cars, the sources said.