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Industry’s last great electric-car skeptic accepts the inevitable

You can’t fight city hall. And you really can’t fight the White House, Congress, Wall Street, Silicon Valley, and governments of various U.S. states and European countries — much less all of them combined.

Or so one would conclude based on Akio Toyoda’s Jan. 26 announcement that he is leaving his post as chief executive of Japan’s Toyota Motor Corp., the world’s second-largest automaker, as of April 1.

The car industry’s most prominent skeptic of the transition to electric vehicles, Toyoda — a grandson of the company’s founder — had frequently expressed reservations about both the feasibility and necessity, in climate-change terms, of going all-electric in the short run. “Carbon is our enemy, not the internal combustion engine,” he once said. At a conference in Thailand just a few weeks ago, Toyoda added that he speaks for a “silent majority” of auto executives who are also “wondering whether EVs are really okay to have as a single option.”

However, his move to board chairman, while turning over day-to-day control to a younger executive, signals that Toyoda’s caution was untenable in the face of growing EV subsidies and mandates intended to decarbonize transportation — which generates about a fifth of global emissions. Not only does the U.S. Inflation Reduction Act include up to $7,500 consumer tax credits, but California and New York have called for phasing out sales of new gas-powered passenger vehicles by 2035. The European Union has mandated zero-emission new cars by that year. China has thrown the weight of its state-dominated economic system behind producing electric cars and batteries to run them. On the hunt for the next Tesla, investors are pouring money into companies they regard as best positioned to profit from this policy-driven boom.

“When it comes to digitization, electrification and connectivity, I personally feel that I belong to the older generation,” Toyoda acknowledged in announcing what he called a personal “step back” and the Wall Street Journal termed a “landmark moment” for the green transition. Certainly, it’s a victory for environmental groups that had been pressuring Toyota to get with the EV program.

And yet the episode should not be allowed to pass without this footnote: Toyoda made a lot of good points. There are still substantial obstacles to mass EV adoption, including the need for rapid, convenient public charging stations, the relatively limited range of electric vehicles as compared to gas-powered equivalents and — despite savings on gas and maintenance — affordability. Even after recent price cuts at Tesla and Ford, and even with a maximum $7,500 tax credit available to qualified customers, many EV models cost more than the $50,000 or less that ordinary car-buyers are prepared to pay for their next new car, according to a new survey by Deloitte.

The United States and other industrialized countries must upgrade their power grids to support EV charging. They must overhaul the global automotive supply chain, securing adequate supplies of minerals and other inputs. China currently dominates the market for processed lithium, a key ingredient of batteries. And the benefits, in terms of carbon-emissions reduction, will be limited unless and until electric grids have been transformed to run on zero-carbon fuel instead of natural gas and coal.

Whether Toyoda spoke for a “silent majority” in the auto industry, he clearly spoke for more than just himself. Carlos Tavares, chief executive of Stellantis — whose brands include Chrysler, Jeep and Peugeot — complained just over a year ago about the decision to “impose” unrealistic EV production demands on the industry.

To be sure, all of these challenges can, potentially, be met. The Inflation Reduction Act and the 2021 infrastructure legislation devote billions of dollars to that goal. It should also be acknowledged that Toyoda was speaking out of self-interest: By holding out for a variety of fuel-efficient propulsion systems, rather than an all-EV approach, he was trying to protect his company’s investments in its Prius and other gas-electric hybrids, along with hydrogen fuel cell technology.

Still, Toyoda undeniably knows a lot about cars — how they work, how they’re made and why people buy them. His is, or was, the perspective of someone who had witnessed, from the inside, the complex, meticulous work over many years that it took to build Toyota into a global enterprise offering affordable products to millions of moderate-income people without sacrificing quality or reliability.

Toyoda’s caution also probably reflects his awareness that even his company’s technological savvy and manufacturing prowess did not immunize it against failure: There was a scandal a decade ago over a dangerous defect that caused some Toyotas to uncontrollably accelerate.

Someday, perhaps, Toyoda will be proven wrong — or get to say “I told you so.” For now, though, political leaders such as Gov. Kathy Hochul (D-N.Y.), are in the driver’s seat. She recently said her plan for state-funded EV chargers means electric-skeptic consumers will “have no more excuses.” The automotive future is being determined not by Toyota but by fiat.

Opinion by Charles Lane, The Washington Post

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