Toyota Hit a Wall as It Rounded the Electric Turn

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In recent years, Toyota has rather accustomed to flattering figures, but that is not what has just happened. The Japanese giant is indeed facing a global drop in its production. Let's take stock.

Difficulties in China and Japan

As specified by Electrek, the Japanese firm built 4.71 million vehicles in the first half of 2024, a 7% drop compared to the previous year's record of 5.06 million cars produced. This is also the first time in four years that Toyota has seen its global production decline.

So what's happening? The company is experiencing difficulties in the Chinese market in particular, where its production is down 17%. It is especially facing a new electric giant: BYD, which is doing well with its Seagull sold for just $10,000 there.

On its own turf, Toyota is also in danger. Indeed, BYD has launched the Seal, often compared to Tesla's Model 3. The firm from the Middle Kingdom is multiplying initiatives and is starting to overshadow its Japanese rival, which has fallen behind in terms of electric vehicles.

Toyota wants to relaunch itself in the electric sector

Of course, the automobile giant is far from having said its last word. Last September, it announced a $7 billion plan to electrify Japanese industry. This project also includes Nissan and other major local companies.

Toyota is therefore promising new-generation batteries that would be much more efficient and less expensive. The ambition is to offer a range of around 600 km by 2027. If this bet is met, the manufacturer would have a serious advantage in its hand, because customers often cite this factor in the reasons that push them to delay the purchase of an electric car.

Putting its money where its mouth is, the company is immediately investing $1.7 billion to boost its specialist subsidiaries and launch a new factory for its luxury brand, Lexus, which is due to open by 2029.

In the short term, however, we have learned that Toyota plans to reduce its global production of electric cars to one million cars in 2026. This would represent a drop of around 30% compared to its previous plan (around 1.5 million). To learn more about this, feel free to reread our dedicated article here.

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