Hybrid wins by a landslide in the U.S. automobile market, Toyota strengthens, Tesla falls
The transition to electric vehicles in the U.S. automobile market was marked by a landslide victory for hybrids, with Toyota showing strength and GM joining in, leading to a decline in electric vehicle-only Tesla.
Japan's Toyota, a latecomer to electric vehicles, saw its U.S. sales increase 20% in January and February, driven by an 83% increase in sales of hybrid and plug-in models.
On the other hand, GM, which stopped selling hybrids in the U.S. to focus on electric vehicles, postponed the launch of some battery-powered models.
The New York Times reported on the 9th that the three U.S. automakers that have begun switching to electric vehicles due to the rapid growth of Tesla, the leader in electric vehicles, are using Toyota hybrids, not Tesla, as their models.
Regarding the hybrid craze, the New York Times said, “Mercedes-Benz, which had hoped to phase out internal combustion engine models by 2030, last month pushed back that goal by at least five years,” and “Ford of the U.S. lowered its electric vehicle production target and increased sales of electric vehicle models.” The construction of a factory to produce batteries is also being delayed. GM announced on the 9th that it plans to reintroduce the hybrid and plug-in hybrid models that dealers had been promoting.
Toyota's breakthrough is that it has surpassed other automakers by offering more than 20 hybrid or plug-in hybrid models, accounting for 30% of sales. Last year, Toyota sold 2.2 million vehicles in the U.S. market, more than all automakers except GM. sold the vehicle.
Tesla, a pioneer in electric vehicles, has grown rapidly to become the world's most valuable automaker, but the stock market has now reduced Tesla's value to less than half of its market capitalization of $1.2 trillion in November 2021.
Tesla's stock price has fallen because its sales are growing more slowly and the profits it makes from each vehicle are falling, while Toyota's value has risen by about a third to about $400 billion over the same period.
Toyota's sudden rise to power is a reminder of how profoundly the auto industry is changing. Technological developments such as electric vehicles, advanced microchips and software have become central to the automotive industry, putting a steady but slow-moving sector of technological advancement into rapid motion.
NYT said, “Toyota made a profit of $27 billion in the nine months from last April, which is about twice the amount for the same period a year ago,” and “In comparison, Tesla’s profit in 2023 is $15 billion, which is 2022 “It was about 19% higher than the previous year’s figure,” he said.
NYT said, “Twenty-one years ago, Toyota launched the Prius, a compact car with a small gasoline engine and a battery-powered electric motor. This combination allows the Prius to travel more than 50 miles on a gallon of gasoline, and the plug-in hybrid model uses gasoline. “Other automakers dismissed the car as a curiosity, but the Prius was a hit, and soon GM, Ford and others were developing their own hybrids, and Tesla CEO Elon Musk “He said with disdain, ‘It doesn’t make sense to have two propulsion systems under the hood.’”
“Deploying plug-in technology in strategic sectors will deliver some of the environmental benefits of EVs as the country continues to build its charging infrastructure,” GM CEO Mary T. Barra said in February.
NYT said, “Electric vehicles have so far failed to attract many car buyers because they are generally more expensive than internal combustion engine or hybrid models, even considering government incentives,” and “Difficult to charge electric vehicles, concerns about driving range, and cold weather.” “The declining performance has made some people hesitate,” he said.
The NYT continued, “Hybrids do not face these problems. “Some hybrids cost a few hundred dollars more than comparable gasoline-powered cars, a premium that owners quickly recoup in fuel savings, while regular hybrids don’t need to be plugged in,” he said. “Some of our plug-in hybrid models can travel more than 40 miles on electricity alone.” “It has a gasoline engine for long-distance travel, has a much smaller battery than an electric car, and can be charged relatively quickly.”
Toyota plans to significantly increase hybrid production and sales this year. A hybrid version of the Tacoma pickup is being released, and the new Camry sedan, scheduled for release in the spring, will be sold only as a hybrid.
Unlike in the U.S., Toyota is struggling in China.
Many Chinese car buyers are switching to buying electric vehicles, helping BYD and other Chinese automakers steal market share from Toyota Volkswagen and other foreign manufacturers.
Reuters reported, “Volkswagen Group and Toyota’s share of the world’s largest automobile market decreased last year, as existing international automakers gave way to Chinese competitors,” the China Passenger Car Association (CPCA) reported on January 9. ) reported citing data.
The association's report said the sales share of Volkswagen's two joint ventures in China with FAW and SAIC decreased from 14.8% in 2022 to 14.2% in 2023.
Sales of Volkswagen Group's SAIC VW and FAW VW, which declined, include the Volkswagen, Audi and Jetta brands.
Toyota's GAC and FAW and Chinese joint ventures see a total market share decline of 7.9% compared to 8.6% in 2022.
BYD, which overtook Tesla in China, led the Chinese market with a market share of 8.8% to 12.5% in 2022.
Volkswagen and Toyota's joint venture in China was among the top 10 automakers by sales last year, but was not among the top 10 new energy vehicle suppliers.
China's BYD and America's Tesla are the two largest NEV manufacturers in China.
“The figures come as China's foreign legacy automakers are losing ground to local rivals and catching up with the shift to electric vehicles amid a price war and slowing demand as China's post-pandemic economic recovery slows,” Reuters said of the January report. “It shows that the German automaker, which plans to launch an entry-level electric platform exclusively for China, is betting on local partnerships that will help China’s electric vehicle (EV) competition, and in July last year, it signed a contract with X, a small Chinese electric vehicle manufacturer. “We signed a contract with Xpeng,” he said, announcing his “strategy to expand the market by relying on local investment.”
Last year, Volkswagen's delivery of battery electric vehicles in China increased by 23.2% to 191,800 units, and total sales increased by 1.6% to 3.2 million units due to these investment expansion efforts.
"Toyota's hybrid strategy is based on a strong, long-term logic, but changes in technology or markets could undermine the company's future performance and position," said Mike Ramsey, an analyst at research firm Gartner. "It seems to oscillate between insensitivity and genius depending on the state. They still seem to sell more cars and trucks than anyone else," he told the NYT.