With a new lineup of electrified vehicles, including plug-in hybrid (PHEV), hybrid, and EV models, Toyota is swinging for the fences. By offering every powertrain option, Toyota believes it has a better chance of hitting a home run. Will it hit it out of the park, or is Toyota setting itself up for a swing and a miss?
Toyota bets on new PHEV, hybrid, and EVs for growth
Toyota is the king of hybrids. When you see a Prius, you immediately recognize the brand. That’s because the compact hybrid has been around for over 25 years now.
As the industry shifts toward cleaner, more efficient options, Toyota is banking on PHEVs to drive growth. Plug-in hybrids are not a new thing for Toyota. The first Prius PHEV was introduced in the US in 2016.
Between Toyota and Lexus brand vehicles, the Japanese automaker offers 32 “electrified” cars in the US, which it claims to be the most of any automaker. In the first quarter, Toyota sold 112,608 electrified vehicles, accounting for nearly 50% of sales.
Over the next few years, the company anticipates a substantial increase in demand for plug-in hybrid vehicles in the US.
In a recent interview with CNBC, David Christ, Vice President of Toyota Motor North America, said the company will “grow our PHEV volume through the lineup over the next few years.”
Sources claim that Toyota plans for PHEV sales to account for around 20% of US sales by 2030, up from the current 2.4%.
To boost the appeal, Toyota is “working to increase, perpetually increase, the amount of miles you can drive on EV-only range,” Christ explained.
The updated PHEV version of its best-selling RAV4, introduced last week, has 50 miles EV range. Although that’s up from 42 miles in the outgoing model, will it be enough?
Christ compared Toyota’s upcoming “electrified” lineup to having bases loaded in a baseball game. “We’ve got ICE. We’ve got hybrid. We got plug-in hybrid. We got EV,” he told CNBC, adding “So, our chances of being successful in scoring runs is just a lot better than if you’re really overly committed to any one of those power trains.”
Like a handful of other automakers, Toyota believes PHEVs will act as a “bridge” to 100% electric vehicles, but they also have some major drawbacks.
Since PHEVs are essentially a combination of an EV and a gas-powered vehicle, they require both technologies, which is significantly more costly. Toyota’s plug-in models cost thousands more than its hybrid or gas-powered vehicles.
The 2025 Toyota RAV4 PHEV ($44,265 MSRP) costs nearly $15,000 more than the base gas model and $12,000 more than the hybrid.
While it ramps up PHEV volume, Toyota has a handful of new EVs set to launch in the US. The updated bZ electric SUV (formerly known as the bZ4X) will arrive at US dealerships later this year, featuring increased range, new styling, and an NACS port to access Tesla Superchargers. In 2026, Toyota will launch the smaller C-HR and rugged bZ Woodland electric SUVs.
Electrek’s Take
Will Toyota’s big bet on hybrids and PHEVs pay off? With so many EVs hitting the market, which are much more advanced and efficient, it could be a big swing and a miss for Toyota.
Several Japanese automakers, including Nissan and Honda, are also banking on hybrids and PHEVs over the next few years.
Nissan believes its third-gen e-Power hybrid system will be its saviour, but it will likely be too little, too late, with BYD and other Chinese EV leaders rapidly launching more affordable, efficient tech and vehicles.
Since Toyota is already ahead of the game with several PHEV models on the market, it won’t be as costly, but it’s still delaying the inevitable.
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