Toyota warns of "very big challenge" created by ZEV mandate

Toyota has just one EV in its line-up but will add five more by 2026

Firm's Europe chief says car makers must co-ordinate with the government for a workable solution

The UK government’s ZEV mandate is “a very big challenge” and could affect the viability of the whole automotive industry, Toyota Europe president and CEO Yoshihiro Nakata has told Autocar.

Nakata, speaking at Goodwood’s Festival of Speed, said he believes only co-ordinated action by car companies, and “constructive communication” with law makers, can create workable solutions to hit the challenging targets.

These state that EV sales must be at least 22% (in 2024, rising each year) of a car maker’s overall volumes, or fines of £15,000 per non-compliant vehicle are dished out.

Nakata acknowledged that Toyota’s current position of having just one pure EV in its range (the bZ4x) is a concern but insists Toyota will have a range of EVs “to provide customer choice” when necessary. 

For now, however, Nakata believes Toyota’s heavy concentration on selling pure and plug-in hybrids continues to make an effective contribution to the universally acknowledged target of reducing CO2 levels by as much as possible, as soon as possible. 

“We never forget that real customer demand is the basis for what we do,” he says, hinting that hybrid models, rather than EVs, is what buyers want.

This notion is backed by the brand’s new pact with Japanese allies Mazda and Subaru to “optimise” combustion engines with more efficient electric motors and batteries and a push to use alternative fuels.

The trio said the decision to not fully focus on EVs was driven by “a deep understanding of their customers’ diverse lifestyles” as well as a belief in a future for ICE.

Despite this, and coupled with Toyota’s current range-of-one EV line-up, UK boss Scott Thompson, appointed MD and president of Toyota GB last January, has confirmed the company is on track to hit ZEV mandate targets this year.

Thompson declined to provide detail of next year’s strategy but insists he already has a workable plan and he feels “extremely confident about Toyota’s multi-path philosophy” for the future. The company is reported to be planning the launch of five new EVs by 2026, including the Urban Crossover, which has already been revealed in concept form.

Meanwhile, Nakata neatly avoided opportunities to support or criticise the EU’s decision to increase import tariffs to as much as 37.6% on Chinese-built EVs (a move likely to be echoed by the incoming UK government, but not yet confirmed) but he agrees that, for the time being, the move will “provide a following wind for us”.

However, he believes tariffs will soon trigger efforts by Chinese companies to build cars in new European factories. BYD, for example, has already confirmed plans for sites in Hungary and Turkey.

“If this happens,” he says, “we will do our best to compete. This is normal competition. If their prices are still lower than ours, we will depend on our engineers and designers to produce more competitive products.

“Meantime, we will take measures to build our brand strength higher, much as [Toyota chairman] Akio Toyoda has done with his concentration on innovation, driving pleasure and advanced technology. We have some ideas, but we are not ready to talk about them yet.”

Nakata insists that Toyota will maintain its long-held values – happiness for all, mobility for all, leave no one out, take a visionary approach. 

This approach, he suggests, extends directly to Toyota’s determination to continue making Corolla hybrids at Burnaston, near Derby, a plant the company opened 32 years ago. “This is a key part of the contribution we will continue making to UK society,” he said. “As part of Toyota’s management, I want it to continue.”