Toyota investors condemn hybrid lobby efforts, as Japan backpedals on EVs
Efforts to shift Japanese government’s stance on hybrid electric vehicles gives the automotive manufacturer ‘global laggard’ status.
Japan’s stance on electric vehicles (EVs) is increasingly coming under scrutiny, as reports in June revealed the G7 member had moved to strike a zero-emissions vehicle target from its net-zero policy. Meanwhile, the country’s largest car maker, Toyota, urged the Japanese government to emphasise hybrid vehicles, as well as EVs.
A draft of an EU communique seen by Reuters revealed Japan had requested a reference to “a collective goal of at least 50% zero-emissions vehicles by 2030” be removed.
This comes as automotive giant Toyota faces growing scrutiny from shareholders, including pension funds operated by New York City, and Denmark’s AkademikerPension, over its inaction to take up electric vehicle production and its government lobbying efforts.
The car maker had urged the Japanese government to make clear fossil-fuel burning hybrids were regarded in equal measure to zero-emissions battery-driven vehicles.
Anders Schelde, CIO of the $19bn Danish pension fund, said in a statement: “In our view – and in the view of many other investors – the lobbying work undertaken by Toyota Motor has given the company a global laggard status on climate action within the auto sector.”
“Public statements, increasing pressure on national governments to weaken EV policies and behind the scenes advocacy through business associations has been repeatedly obstructionist towards the bans on cars that are not purely electric. This is jeopardising Toyota’s valuable brand to the detriment of shareholder interests.”
In our view – and in the view of many other investors – the lobbying work undertaken by Toyota Motor has given the company a global laggard status on climate action within the auto sector.
Stalling progress
Toyota has a history of protesting the transition to low-emissions vehicles. Once hailed for bringing the world’s first mass-produced diesel-electric vehicle to market, climate think tanks like InfluenceMap now predict the Prius maker will fail to make good on its Paris commitments.
InfluenceMap attributed a ‘D’ rating to Toyota in May, suggesting that it was forecast to be producing the lowest percentage of full electronic vehicles in 2029 and, together with Nissan, had the “most negative climate policy engagement”.
Japan lags other regions on EV targets. A Climate Group report recently highlighted it had simply committed to “electrify” all new cars by the mid-2030s, which would include hybrid models (HEVs). Meanwhile, the EU is still set to ban new internal combustion engine (ICE) vehicles by 2035, and China and the US intend for 50% of car sales to be electric by 2035 and 2030 respectively.
Toyota has previously opposed Yoshihide Suga administration’s discussions on banning the sales of ICE vehicles by the mid-2030s.
According to the Intergovernmental Panel on Climate Change vehicles powered by low-emissions electricity “offer the largest decarbonisation potential for land-based transport, on a life-cycle basis”.
