Toyota sold more cars in 2023 than ever before but electric vehicles had a minimal impact on the growth. Of the 11,233,039 vehicles delivered by the Japanese conglomerate, only 104,018 were EVs. Just 0.926 percent of the cars sold by Toyota, Lexus, and the other subsidiaries last year were battery EVs. With that in mind, the company reckons there's still a need for combustion engines.

During a speech held in front of 200 corporate managers and executives, Chairman Akio Toyoda reaffirmed plans for a "major engine development project." His statement is in line with an announcement made at the 2024 Tokyo Auto Salon where he "used the opportunity to tell everyone that we're going to keep doing engines."

During the Q&A session, Toyoda expressed his belief that battery EVs will never exceed a market share of 30 percent, regardless of technological advancements. As a result, the remaining 70 percent will be represented by gasoline cars, hybrids, and fuel cell EVs. The firm's chairman also mentioned that hydrogen-burning combustion engines could potentially offer a solution. Diesel was not mentioned.

While addressing questions from journalists, Toyoda didn't solely focus on decarbonization. He also touched on the delicate matter of jobs:

"If we suddenly shift to BEVs, I'm sure the 5.5 million people in Japan's auto industry who have spent their lives working on engines will start to question, 'What was it all for?' Some of our engine-related suppliers can't even get banks to lend them money."

We've reached the point where the announcement of a new combustion engine comes as a surprise. In 2024, automakers are predominantly focused on revealing plans for new EVs. Some even go as far as claiming they'll cease production of ICE cars in the coming years. For instance, brands like Jaguar, Chrysler, Lotus, Aston Martin, Bentley, Buick, Cadillac, Rolls-Royce, Genesis, Maserati, Mini, Opel/Vauxhall, and Volvo have committed to becoming purely electric by the end of the decade. Even Toyota's Lexus brand has pledged to halt sales of cars with combustion engines by 2035.

In Europe, Stellantis promises to sell only EVs by the end of the decade. Mercedes also intends to go fully electric on the Old Continent by 2030 but only "where market conditions allow." Archrival Audi will stop making cars with combustion engines in 2032. BMW has not set a cutoff date yet. The Volkswagen core brand aims to only make EVs in Europe from 2033.

Toyota sees things differently, as it believes battery EVs can't be the sole solution to achieve carbon neutrality. Akio Toyoda mentioned that the charging infrastructure is far from being ready, pointing out that "a billion people live without access to electricity" worldwide. Since Toyota sells cars in those regions, going all-in on EVs wouldn't make sense.

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