Toyota bets big on hybrid-only models as EV demand slows

TEXAS, Aug 15 (Reuters): Toyota may be one of the slowest legacy automakers to develop electric vehicles but it could be the first to jettison cars powered only by gasoline.
Almost three decades after launching the Prius, its pioneering gasoline-electric hybrid, Toyota is moving to convert most, and eventually maybe all, of its Toyota and Lexus line-up to hybrid-only models, two Toyota executives told Reuters.
Toyota's stubborn focus on hybrids over EVs is part of a broader challenge by the world's biggest automaker to the prevailing industry and regulatory orthodoxy that all cars will be electric in the near future.
Toyota Chairman Akio Toyoda said in January that he believed the global share of EVs would top out at just 30 per cent. The Japanese automaker instead touts a "multi-pathway" strategy that includes EVs along with hybrids, hydrogen fuel-cell vehicles, green fuels and, potentially, other technologies yet to emerge.
"Going forward, we plan to evaluate, carline by carline, whether going all-hybrid makes sense," David Christ, head of sales and marketing for Toyota in North America, told Reuters.
Those evaluations will come with every model redesign, if not sooner.
That includes the pending overhaul of the RAV4 for the 2026 model year. The RAV4, America's best-selling SUV, already has hybrid variants that account for about half of sales.
Two people familiar with Toyota's product planning discussions said the automaker is highly likely to ditch the gasoline-only version for the North American market, but hasn't made a final call.
The automaker has already stopped offering a gasoline-only version of its Camry, America's best-selling sedan, for the 2025 model year while its rugged Land Cruiser and Sienna minivan, for example, also now come only as hybrids.
Many of the hybrid-only models will also likely come as a plug-in hybrid with a bigger battery, according to the two people, who declined to be named.
Toyota's effort to convert all or almost all of its North American line-up to hybrid-only vehicles has not previously been reported.
The automaker's hybrid strategy aims to solidify its already dominant position in a part of the market that has found a new lease on life as demand for EVs slows, partly due to their high prices and charging hassles.
Toyota's hybrids don't need charging and switch seamlessly between gasoline and electric power, or use both at once, depending on driving conditions. Its plug-in hybrids can be charged and typically travel about 40 miles (64 km) on battery power, like an EV, before their gasoline engines are required.
Stripping out two EVs and a fuel-cell car on sale in North America, there are currently 31 other Toyota and Lexus models. Eight are already hybrid-only and eight are available in gasoline versions only.
The hybrid strategy will also give Toyota unique advantages in complying with increasingly tough US carbon-emissions restrictions, Toyota executives and industry experts said.
As the US lowers pollution limits under regulations announced in March, Toyota's booming hybrid sales could help the automaker save billions of dollars in regulatory fines and costs while buying Toyota more time to develop EVs or other zero-emission vehicles.