In this clip from Motley Fool Live, recorded on Dec. 14, Motley Fool contributor John Bromels discusses the sharp shift in direction Toyota has taken following its announcement to invest in BEVs.
John Bromels: Toyota (TM +0.78%) President Akio Toyoda announced an investment of 4 trillion yen. It's about $35.2 billion in battery electric vehicles between 2022 and 2030, including 30 new battery electric vehicle models by 2030. The reason this is a big deal is because Toyota had its early success in hybrids and had really been the one automaker that was doubling down on hybrids and had announced a bunch of new models, which they kept saying, we are announcing a bunch of new EV models. In fact, they said all of our new models that we are releasing in the United States for 2022 are going to be electric vehicles but none of them were battery electric vehicles. This was all hybrid vehicles that they were going toward.
Well, all of a sudden, they have made a really seismic shift, a big U-turn in their thinking to put these investments in battery electric vehicles. They're investing money in solid-state batteries on top of money that they've already committed. But really, apparently, having seen that the world is moving beyond hybrids. The world is wanting battery electric vehicles and they were lagging behind other automakers e.g., of course Tesla (TSLA +0.07%) but also Volkswagen (VWAGY 0.10%). Also, in fact, in terms of BEVs, they were lagging behind the GMs (GM +0.32%), the Fords (F +0.37%), the BMWs (BMWYY +0.00%) (BAMXF +1.25%) of the world. They have apparently decided that this is not the way the future is going to go, that the future is not hybrids. It's batteries. This includes Toyota models. This includes Lexus models, their luxury brand, all kinds of things. It's huge because Toyota was the last holdout essentially. Whether that is because they were reluctant to let go of that early success that they had seen with the Prius or whether that was because they felt as though the market wasn't going to support battery electric vehicles and now have changed their minds based on what's happening in the market, I'm not sure. We're talking some serious investments here. Just a quick rundown of some of the figures: half-trillion yen, $4.4 billion, toward solid-state batteries. That's on top of a previously announced 1.5 trillion yen, which is about $13.2 billion that they already had announced. Let's see. They're projecting 1 million EV sales by 2030 for Lexus alone it looks like. Don't quote me on that Lexus alone thing. That's what I think this is saying but, keep in mind, this is translated. I'm not exactly sure that translation is accurate. This is the world's second-largest automaker, the largest traditional automaker besides Tesla by market cap. Big news. I want to personally thank Akio Toyoda [laughs] because I now don't have to do the Kansas City southern thing.
