Toyota Chairman: Waning Demand for EVs Shows People are Waking Up to Reality
Toyota’s chairman and former CEO, Akio Toyoda, made a bold statement at an auto show in Japan this week. He told reporters that the declining demand for electric vehicles (EVs) is a clear sign that people are finally realizing that EVs are not the magical solution to carbon emissions that they have been made out to be.
“People are finally seeing reality” about EV technology, Mr. Toyoda declared. He spoke as the head of the Japan Automobile Manufacturers Association, the organizer of the event.
Mr. Toyoda, who has long been skeptical about the rapid adoption of EVs, stepped down as CEO of Toyota this year amid criticism that he wasn’t committed enough to pushing the company towards battery-powered cars.
When asked about the declining demand for EVs, Mr. Toyoda’s response suggested that he feels vindicated in his skepticism.
“There are many ways to achieve carbon neutrality,” he stated, implying that consumers are waking up from a dreamscape created by climate change alarmists who have exaggerated the benefits of EVs while downplaying their drawbacks.
His remarks come as the growth of EV demand in various markets has slowed, leading some companies to scale back their electrification plans.
Toyota Motor Corporation cars are seen at a briefing on the company’s strategies for battery EVs in Tokyo, on Dec. 14, 2021. (Kim Kyung-Hoon/Reuters)
Waning Demand
Market research firm Canalys estimates that global sales of EVs rose 49 percent in the first half of this year, down from last year’s 63 percent pace of growth.
Honda and General Motors recently announced the cancellation of a $5 billion plan to develop EVs together, while GM revealed a slowdown in its electrification strategy.
GM is “moderating the acceleration of EV production to protect our pricing, adjust to slower near-term growth in demand and implement engineering changes that will bolster profits,” said GM Chief Financial Officer Paul Jacobson.
A general view of GMC Hummer EVs is pictured at General Motors’ Factory ZERO electric vehicle assembly plant in Detroit, Michigan, on Nov. 17, 2021. (Nic Antaya/Getty Images)
Ford also announced a temporary cut in production for its electric F-150 Lightning pickup truck after slowing down its EV ramp-up in July.
“EV demand next year could be lower than expectations,” warned Lee Chang-sil, CFO at South Korean battery maker LG Energy Solution.
Transportation Secretary Pete Buttigieg, a proponent of EVs, recently admitted to the challenges of finding reliable EV charging stations. This admission came as the federal agency he leads announced $100 million in funding for EV charging stations.
‘Automotive Seasoning’
Interestingly, Mr. Toyoda’s remarks at the auto show contradict the EV-boosting speech given by the current Toyota CEO and President, Koji Sato.
Mr. Sato hyped up EVs during a press briefing, emphasizing their eco-friendliness and unique driving experience.
However, Mr. Sato acknowledged the need to address the drawbacks of EVs, such as limited driving range, in order to achieve their vision for battery EVs.
While lower center of gravity and spacious interiors may appeal to some drivers, overcoming “range anxiety” remains a significant challenge for widespread EV adoption.
Range Anxiety
One of the main concerns among Americans considering EVs is range anxiety, the fear of running out of power without access to a charging port.
A recent study by the American Automobile Association (AAA) found that EV range can decrease by up to a quarter when carrying heavy loads.
Another study by consultancy Ernst & Young highlighted range anxiety as the second-most cited concern about switching to EVs, with a lack of public charging stations being the top concern.
The study estimates a need for nearly 69 million chargers across the United States and Canada by 2035 to support the pace of the EV transformation.
President Joe Biden aims for 50 percent of all new vehicles by 2030 to be EVs or plug-in hybrids.
How does the issue of charging infrastructure impact the demand for EVs?
In a surprising statement made at an auto show in Japan, Toyota’s chairman and former CEO, Akio Toyoda, has declared that the declining demand for electric vehicles (EVs) indicates that people are finally waking up to the reality that EVs are not the magical solution to carbon emissions that they have been portrayed as. This statement comes as a departure from the industry’s general narrative of promoting EVs as the future of transportation and as a solution to reduce carbon emissions.
As the head of the Japan Automobile Manufacturers Association, the organizer of the event, Mr. Toyoda emphasized that people are now seeing the reality about EV technology. This remark exhibits his long-held skepticism about the rapid adoption of EVs. It is worth noting that he stepped down as CEO of Toyota this year amidst criticism that he was not committed enough to pushing the company towards battery-powered cars. Now, his statement seems to validate his previous reservations about EVs.
The declining demand for EVs raises questions about their viability as a sustainable and widespread transportation option. While EVs have gained popularity in recent years, with governments and companies around the world investing in their development, this shift in consumer demand suggests that there may be limitations and challenges associated with EVs that were not initially considered.
One possible explanation for the declining demand is the issue of charging infrastructure. EVs require charging stations for long-distance travel, which are currently limited in many regions. The lack of a comprehensive and accessible charging network may deter potential buyers from investing in EVs. Furthermore, the time required for charging compared to refueling a traditional gasoline-powered vehicle remains a significant inconvenience for consumers.
Another factor could be the cost of EVs. Despite advancements in technology, EVs often come with a higher price tag compared to traditional cars. The production and integration of batteries contribute significantly to the overall cost of an EV. This may make EVs less accessible to a broader range of consumers, particularly in price-sensitive markets.
Furthermore, concerns about the environmental impact of battery production and disposal are also emerging. The extraction of raw materials for batteries, such as lithium, cobalt, and nickel, raises environmental and ethical concerns. Additionally, the disposal of used batteries poses challenges in terms of recycling and preventing potential environmental contamination.
Interestingly, Mr. Toyoda’s statement seems to align with recent developments in the automotive industry. Many major car manufacturers, including Toyota, have been exploring alternative fuel sources such as hydrogen fuel cell technology, which offers longer ranges and shorter refueling times compared to EVs. This shift suggests that the industry itself is acknowledging the limitations and challenges associated with EV technology.
It is important to note that the declining demand for EVs does not mean that efforts to reduce carbon emissions should be abandoned. The transportation sector plays a significant role in carbon emissions, and finding sustainable alternatives is crucial. However, it is essential to approach this issue critically and consider multiple avenues for reducing emissions, rather than relying solely on one technology.
In conclusion, Mr. Toyoda’s statement about the waning demand for EVs reflects a growing realization among consumers that EVs may not be the ideal solution to carbon emissions. This shift in perspective raises important questions about the long-term viability and limitations of EV technology. It emphasizes the need for a comprehensive and holistic approach to reducing emissions in the transportation sector, considering various technologies and fuel sources. As the industry continues to evolve, it will be interesting to see how manufacturers and consumers navigate these challenges and work towards a sustainable future of transportation.
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