Hybrid Or Electric Power: Toyota's Dilemma

Toyota is the world's largest automobile manufacturer by production and sales. Thanks to its commitment to quality and the efficiency of its factories around the world, this Japanese manufacturer is known in every single country. It has a strong presence on five continents through manufacturing factories and design centers.

Much of Toyota's popularity is due to its ability to offer the right vehicle in every market. Better than its Japanese, US, and European rivals, Toyota is quite good at creating cars to the tastes of the markets in which it operates. And usually, these are global products. The Corolla, RAV4, Land Cruiser, and Yaris are just four examples of a wide range of cars that cater to all markets.

The other part of this explanation stems from hybrid engines. Toyota has been building hybrid cars for over 20 years, selling millions of units in that time. The investment in this powertrain is paying off: the brand is ahead of its rivals in terms of fuel emissions and makes money with these cars.

What Will Happen In The Future?

Despite the success and positive image that hybrid technology has given Toyota, some external factors are forcing the brand to take the next step. It has to decide whether to continue improving existing hybrid technology, or switch to pure zero-emission electric vehicles.

The problem is that the second option is a bit unfamiliar for Toyota. As it has focused on the improvement and proliferation of hybrid cars in these 20 years, it has devoted fewer resources and interest to EVs. Today, Toyota is the world's largest maker of pure hybrid cars, but one of the smallest makers of electric vehicles.

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With emissions regulations tightening around the world, it's clear that hybrid cars won't be enough to meet the targets. Basically, these are internal combustion engines with an electric drive. And while their impact has been quite positive on emissions, such powertrains will never achieve 100 percent zero emissions.

Hybrid tech is the ideal solution for now, but not in ten years. What will Toyota do? Will the company continue to bet on this interesting, cheap, and easy-to-use solution? Or will hybrids be abandoned completely in favor of electric solutions?

The author of the article, Felipe Munoz, is an automotive industry specialist at Jato Dynamics.