Toyoda to step down as Toyota CEO

Akio Toyoda (right) and Koji Sato at the Tokyo Auto Salon 2023 (Photo: Reuters)

After 14 years of leading the company his grandfather founded, Akio Toyoda is to step down as CEO of Toyota Motor Corporation, effective 1 April. The new CEO will be Koji Sato, who is currently president and chief branding officer of Lexus, Toyota’s luxury passenger car brand. Toyoda will become chairman of Toyota.

The unexpected move has reportedly been prompted by Toyota’s (and allegedly Toyoda’s) reluctance to embrace pure electric vehicles. While the carmaker has now introduced its first full electric passenger model, the BZ4X crossover SUV, it had elected to continue development of hybrid and hydrogen fuel cell powertrains over battery-electric drives.

While Toyota had much success with its Prius hybrid (and related petrol/electric spinoffs, such as the C-HR crossover and more recent Corolla and Yaris hybrids), it was seen to be losing traction (both in sales and share value) against such market disruptors as Tesla Motor.

Toyota has also invested heavily in development of fuel cell electric vehicles (FCEV). While sales of the Toyota Mirai FCEV almost tripled between 2020 and 2021 (1770 to 5918 units), the technology has yet to overcome sourcing and distribution of hydrogen fuel to support the consumer market.

In 2018, Toyota unveiled Project Portal 2.0, the second-generation of its heavy-duty Class 8 truck powered by a hydrogen fuel cell powertrain formed using two stacks from the Mirai. As with many similar experimental haulage vehicles, the truck was to undergo proving in California, completing routes between the ports of Long Beach and Los Angeles.

While Toyota’s commercial truck brand, Hino, was also involved in Project Portal, it was during the stewardship of Toyoda that the brand was found to have been falsifying engine emissions results for up to a decade.

The move to replace Toyoda could address the technology ‘stagnation’ at Toyota and open the door to a greater interest in pure electric powertrains. In making the announcement that he would step down as CEO (on 26 January), Toyoda noted that Sato’s mission would be turn Toyota into a ‘mobility company’, without offering any specifics as to what that would entail.

It could be that the appointment of a new CEO will see Toyota make greater headway into battery-electric models across all vehicle segments, from passenger cars to trucks. The company has long been investing in development of solid state batteries, which are reported to offer greater energy density and shorter recharging times over lithium-ion packs. But in 2022 it was revealed the tech would first appear in petrol/electric hybrid model, rather than a pure EV.

While having Toyoda as chairman could still see his influence carry across development of future Toyota powertrains, launching the solid state battery tech in a pure EV would almost certainly position the Japanese company as a leader in the battery-electric market – much as it was when it launched the first Prius hybrid in 1997.