The Future of Toyota: Insights From the Company's New CEO

Yoshihiro Watanabe, Toyota's new CEO, faces an immense task as he attempts to lead the world's largest automaker on its path toward success and sustainability. He must coordinate among an expansive group of managers that span every corner of the organization - some may disagree over how best to serve Toyota customers.

What Will Toyota Look Like in 2040?

Toyota's leadership team must approach its transition into mobility as an organization differently, looking beyond traditional automotive design for ways to increase accessibility, safety and efficiency while remaining true to Toyota's values.

Toyota CEO Akio Toyoda is taking steps to move his company in this direction by making several adjustments, chief among them an extensive overhaul of Toyota's executive structure that will reduce board membership to 11 from 27 and bring high-level executives closer to work floor operations.

Toyota's restructuring initiative seeks to streamline and increase agility within their management structure, according to analysts, in order to better adapt to changing global conditions and market trends more quickly.

Toyoda's restructuring includes cutting the number of executive vice presidents responsible for various areas of business. His goal is to place these executives closer to their actual tasks and involve them more directly in strategic decision-making rather than focus on specific markets.

Toyota believes this change could help them focus more effectively on its core products - such as its popular sedan Camry. Furthermore, this move would enable the automaker to better adapt to emerging market trends like increased diesel vehicle sales or rising interest in electric cars.

Toyota's commitment to zero emissions vehicles marks another key shift. Already the carmaker has released its hydrogen-powered Mirai fuel cell vehicle and plans on launching more such cars by 2022. Furthermore, they are developing battery electric vehicles based on their e-TNGA platform which covers small cars and three-row crossovers with all-wheel drive as well as batteries from 50 kWh up.

Toyoda's restructuring will likely speed up the adoption of hybrid and electric vehicles, as well as continue their push towards hydrogen energy as a carbon neutral source of power.

The Future of Hybrids

Toyota is widely recognized as an innovator in hybrid technology. They were the first automaker to mass produce gasoline-electric hybrid cars such as the Prius, making it one of the world's best-selling models today.

Toyota recognizes that hybrid technology is rapidly advancing, prompting it to consider rethinking its hybrid car strategy. Koji Sato, their new CEO, has been charged with transforming Toyota into a mobility brand.

He has pledged to implement "big changes" at Toyota, including taking an active role in electric vehicle (EV) development by increasing EV sales as well as offering its hybrid technology to other automakers.

Toyota recently unveiled their bZ4X electric crossover vehicle powered by a hybrid engine - making history by becoming one of the first EVs with engineering that shares components with internal-combustion vehicles.

The company also unveiled a number of electric vehicles set for release within the next several years, such as an SUV and truck. Furthermore, Tesla announced plans for solid-state batteries which offer greater range in the same size pack compared to lithium-ion cells in 2020s first half.

While Toyota will continue offering hybrid models such as the RAV4 hybrid, some experts speculate as to whether or not Toyota will discontinue their flagship Prius hybrid vehicle. Although Toyota's latest Prius version may be easier than any previous iteration of this car to drive, its initial popularity wasn't felt throughout North America until much later on in production.

Although Toyota does not plan to discontinue the Prius anytime soon, its global president of sales Gianluca Carlucci recently told Automotive News he expected full replacement around 2023.

Toyota remains firm that its hybrid technology should only be deployed when necessary - such as in areas without enough infrastructure to support solely electric vehicles - which stands in stark contrast to what competitors like BMW have advocated for.

The Future of Electric Vehicles

Toyota has long led the world in hybrid vehicle sales, yet has been slow to adopt pure battery electrics into its lineup. That could change soon as Toyota plans to increase EV sales worldwide by 2025.

At this year's Tokyo Auto Show, Toyota unveiled 15 concept cars highlighting their plans for electrified vehicle production. Of particular note was their sporty SUV collaboration with Subaru; using a 71.4kWh battery it covers 280 miles and marks an all-electric first for Japanese manufacturers.

Toyota recently unveiled an exciting new direction for their brand with the bZ4x electric vehicle - just one of 30 vehicles they plan to introduce globally by 2030. Additionally, they announced they would invest $35 billion over five years to increase its overall EV portfolio.

Toyota recently made an important financial commitment, signaling a dramatic shift in its approach to electric vehicles (EVs). They halted some projects they had underway while assigning a team the task of revising its strategy in order to better compete against Tesla (TSLA.O).

Toyota is also considering expanding their approach to thermal management of electric vehicle batteries, which would decrease both their size and weight while cutting costs by thousands of dollars per car, according to four people familiar with the matter. That could prove key in its bid to catch up with Tesla in this lucrative EV market, according to four people familiar with this matter.

Toyota is upgrading its powertrain factories to produce more lithium-ion batteries for its EVs, which will increase global capacity and give them extra global reach. They plan to produce up to 280 gigawatt-hours by the end of this decade.

The Future of Mobility

Future mobility trends include connectivity, autonomy, shared mobility and electrification - trends which are revolutionizing how we travel as well as shaping society as a whole.

Toyota has long been dedicated to hydrogen fuel cell vehicles, but recently made public their commitment to electric vehicle production as well. They've displayed prototype EVs at events and may build an entirely new platform specifically dedicated to these types of cars for ease of production.

Toyota's move could prove transformative for the auto industry at large; yet it remains unknown how this will go down and whether or not Toyota will succeed.

Toyota recently unveiled plans to create a new mobility model that allows people to use vehicles for longer and only pay for what they use, while investing in various mobility services, including ridesharing and ridehailing services.

Toyota's new mobility model is an integral component of their plan to move away from car manufacturing towards providing services that enable smooth travel experiences with maximum comfort, convenience and safety.

Toyota has set itself an ambitious goal of becoming a world leader in mobility services through its Lexus and Toyota brands, and this endeavor makes sense given their fleet size. They have already begun exploring various methods to provide mobility services across their fleet of vehicles.

The company has demonstrated how its approach has been applied with examples like its self-driving e-Palette used for transport at the Summer Olympic games and Lexus electric EV concepts that it claims can go from zero to 60 MPH in two seconds and have a 435-mile range.

Many companies are working towards micromobility, the concept that allows you to operate something smaller than an automobile - like a scooter or bike - without needing your own personal vehicle.