Toyota’s electrified vehicle strategy undeniably concentrates on hybrids. Its stance towards electric vehicles (EVs), meanwhile, has been very bold and rocky. On the one hand, the company’s chairman, Akio Toyoda, seems to have a lot of things to say about EVs, while on the other hand, the company is now pushing EVs that are finally competitive.
Toyota
Founded 1937
Founder Kiichiro Toyoda
Headquarters Toyota City, Aichi, Japan
Current CEO Akio Toyoda
Brands Owned Lexus
Status Active
Total Vehicles Sold In 2022 9,615,157
Revenue In 2022 $276.57 billion
Region Asia
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And then there’s Toyota’s continued push for its hydrogen combustion engine, and the various claims of game-changing solid-state batteries. What’s Toyota’s electrified vehicle strategy all about, and what’s actually happening behind the press releases that the company constantly offers up?
Well, this is all about not putting all of its eggs in one basket, as many automakers who went all-in on EVs too early are in a sticky financial situation today. For now, Toyota’s global position as the dominant automaker is safe. But as other automakers, particularly the Chinese, steam ahead with their EV developments, what is Toyota doing behind the curtains in its electrified vehicle development to remain competitive?
To give you the most up-to-date and accurate information possible, the data used to compile this article was sourced from various manufacturers and other authoritative sources, including Reuters and The Autopian.
Hybrids Are Its Profit Driver
Let’s start with what’s working for Toyota–its hybrids. In the United States, every single model lineup by Toyota, except for the GR86 and outgoing GR Supra, is available with a hybrid drivetrain. That helps in driving sales, especially since Toyota is in the right position to even offer some of its models purely as hybrids, which also happen to have higher profit margins. However, as global Toyota sales experience slower growth, as well as tariffs eating into its finances, the company is expected to make fewer profits this year.
It Pays To Make Hybrid-Only Models
Toyota’s two best-selling models include the RAV4 (which recently got a complete redesign) and the Camry. By turning these two models into hybrid-only offerings in the United States, you are setting up the right ingredients to increase your share of hybrid sales in the market. When the Camry went all hybrid, the price increase wasn’t substantial. It was only high enough that the fuel efficiency benefits outweighed the incremental price premium.
As a result, despite having a higher base price than the model it replaced, the current Camry’s sales in 2024 increased by six percent, while sales for the first half of 2025 remained practically the same at 155,242 units. We’ll have to wait and see if that same effect will carry through the RAV4. For the first half of 2025, 239,451 RAV4s have been sold, which is down slightly by four percent as Toyota prepares for the new, all-hybrid RAV4. 95,813 of those were for the hybrid, while 11,357 were for the plug-in hybrid. Combined, the RAV4 Hybrid and RAV4 Plug-In Hybrid account for 44 percent of overall RAV4 sales.
It Also Pays To Have A Well-Designed Hybrid
But of course, what’s the point of going all-hybrid on certain models if the hybrid system isn’t good enough for people to choose it, right? Thankfully, with experience of making mass-market hybrids since 1997, Toyota’s big bet on hybrids is paying off massively in 2025. We now have the fifth-generation Toyota Hybrid System (THS V), which is already fitted to the Camry and new-generation RAV4, along with the Lexus UX 300h (but not yet the NX and RX).
THS V, which is a series-parallel hybrid system, traces its lineage back to the original Prius from 1997 (or 2001 for the United States), wherein decades of refinement and improvements have made it so robust that its reliability record is unmatched by even pure internal combustion engine (ICE) cars. And then there’s also the i-Force Max and Hybrid Max parallel hybrid systems, which are catered to high-powered and/or large vehicles. Though these two parallel hybrid systems are still very new, there have been no major reports of poor reliability on i-Force Max and Hybrid Max thus far, giving us confidence in these two new hybrid systems.
Electric Vehicles For The Right Market
While Akio Toyoda is extremely vocal regarding EVs, Toyota, as a company, is still pushing ahead with EV development. However, unlike other automakers who went all-in with EVs, whatever the market, Toyota takes a more nuanced approach – one that’s highly dependent on the market it’s competing in.
Toyota’s Competitive EVs In 2025
Toyota’s first mass-market EV, the bZ4X (the RAV4 EV was only sold in limited quantities), came onto the market with so-so specifications and capabilities. For a company that pioneered hybrids, a ho-hum EV was unexpected. However, in 2025, the bZ4X, which was renamed simply as bZ, is finally worth considering. At its most efficient, the bZ has a Toyota-estimated 314 miles of range, all for a base price of $37,900. A more affordable $34,900 XLE FWD with 236 miles is also available, and this actually costs less than the previous bZ4X.
And then you have EVs like the C-HR, whose standard dual-motor AWD gives it 338 horsepower. This EV drivetrain is also present in the new bZ, but it’s a higher-trim option. The move is to make the C-HR the sportier, faster alternative to the bZ, since it won’t be available in front-wheel drive (FWD). Expect less range as a result of its higher power outputs by default.
But, Even More Competitive For China
Toyota’s multipronged approach means that its level of competitiveness greatly varies in the region where it’s competing. Over in China, where the EV battleground is fiercest, Toyota is set to have a plethora of EVs that are highly competitive with what the Chinese domestic brands offer. Right now, they already have the bZ3 and bZ3X – their most affordable offerings so far, but that’s set to expand with the introduction of the bZ5 and bZ7.
The bZ5 is a sleek, genre-bending coupe-like crossover SUV, while the bZ7 is a flagship full-size sedan. Both electric models are limited to China and are produced with its local joint venture partners to speed up development. Toyota’s upcoming wave of EVs for China is its bid to regain declining market share from ever-competitive Chinese offerings.
The Real Deal Behind The Curtain
Now, these are Toyota’s current developments, but what about in the future, where Toyota has long been promising solid-state batteries and even, to a certain degree, hydrogen cars? Well, outside the glamor of press releases and their supposed technology “breakthroughs”, here’s what’s happening on the ground with Toyota’s EV roadmap.
Behind The Scenes Of Solid-State Batteries
Is Toyota actually developing solid-state batteries? I mean, they’ve been revealing how many “breakthroughs” they’ve achieved, so where are they? Well, I wrote an article two years ago about this supposed 745-mile solid-state battery breakthrough, but even they admit that they aren’t good at promoting a technology until it reaches a production vehicle. What we know so far is that Toyota has more than 1,000 patents for solid-state batteries – the most of any automaker.
But there are also tangible signs that there’s even more development happening behind the scenes. In 2024, Toyota acquired Primearth EV Energy (PEVE) from Panasonic, making it a wholly-owned Toyota subsidiary. Toyota has another affiliate company called Prime Planet Energy & Solutions, in which the Japanese automaker has a 51 percent stake, and the remaining 49 percent with Panasonic. Prime Planet Energy & Solutions already makes EV batteries, while PEVE’s EV battery production is only set to ramp up. Finally, Idemitsu Kosan, a large petroleum company in Japan, will strengthen its materials business for Toyota’s all-solid-state battery production plans. A new lithium-sulfide plant has a planned completion date of June 2027, just in time for Toyota to finally produce all-solid-state batteries based on its timeline.
Let’s Talk About Its Hydrogen Vehicles
Now, as for its hydrogen vehicles, this is another key area where Toyota is pushing the narrative for its Beyond Zero campaign. Versus its EV strategy, the hydrogen strategy takes a lot more time and effort to be commercialized. Its Mirai hydrogen fuel cell electric vehicle (FCEV), which uses hydrogen’s chemical bonding with oxygen to produce electricity, seems to have been left in limbo, enough for owners to gather and sue Toyota for the inconvenience the Mirai has caused. For one, hydrogen infrastructure isn’t just limited to California, but it’s also plain limited, period. Oh, and even if you do find a hydrogen station, do pray that it’s working, too, alright?
And then there’s also its hydrogen combustion engine cars, which basically use an ICE that’s been tweaked to combust hydrogen fuel. Why isn’t this taking off? Well, once again, outside the glamor of press releases, hydrogen is a pain to produce, store, and fill up. If you think EV infrastructure is challenging, you haven’t seen how challenging hydrogen fuel infrastructure is. EV chargers can easily be retrofitted, while hydrogen production and stations need a completely new infrastructure. Hydrogen must be pressurized, as it’s a very unstable element that only exists on Earth when bonded with another element (good ‘ol H2O, for instance). Unless the hydrogen infrastructure can be as simplified as the EV infrastructure, don’t expect hydrogen vehicles in any shape or form to take off anytime soon.
