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Hybrid pioneer Toyota fights move to all EVs

By Hiroko Tabuchi

© The New York Times Co.

The Toyota Prius hybrid was a milestone in the history of clean cars, attracting millions of buyers worldwide who could do their part for the environment while saving money on gasoline.

But in recent months, Toyota, one of the world’s largest automakers, has quietly become the industry’s strongest voice opposing an all-out transition to electric vehicles — which proponents say is critical to fighting climate change.

In June, Chris Reynolds, a senior executive who oversees government affairs for the company, traveled to Washington for closed-door meetings with congressional staff members and outlined Toyota’s opposition to an aggressive transition to all-electric cars. He argued that gaselectric hybrids such as the Prius and hydrogen-powered cars should play a bigger role, according to four people familiar with the talks.

Behind that position is a business quandary: Even as other automakers have embraced electric cars, Toyota bet its future on the development of hydrogen fuel cells — a costlier technology that has fallen far behind electric batteries — with greater use of hybrids in the near term. That means a rapid shift from gasoline to electric on the roads could be devastating for the company’s market share and bottom line.

The recent push in Washington follows Toyota’s worldwide efforts — in markets including the United States, the United Kingdom, the European Union and Australia — to oppose stricter car-emissions standards or fight electric vehicle mandates. For example, executives at Toyota’s Indian subsidiary publicly criticized India’s target for 100% electric vehicle sales by 2030, saying it was not practical.

Together with other automakers, Toyota also sided with the Trump administration in a battle with California over the Clean Air Act and sued Mexico over fuel-efficiency rules. In Japan, Toyota officials argued against carbon taxes. “Toyota has gone from a leading position to an industry laggard” in cleancar policy even as other automakers push ahead with ambitious electric vehicle plans, said Danny Magill, an analyst at Influence-Map, a London-based think tank that tracks corporate climate lobbying. InfluenceMap gives Toyota a “D-” grade, the worst among automakers, saying it exerts policy influence to undermine public climate goals.

In statements, Toyota said it was in no way opposed to electric vehicles. “We agree and embrace the fact that all-electric vehi- cles are the future,” said Eric Booth, a Toyota representative. But Toyota thinks that “too little attention is being paid to what happens between today, when 98% of the cars and trucks sold are powered at least in part by gasoline, and that fully electrified future,” he said.

Until then, Booth said, it makes sense for Toyota to lean on its existing hybrid and plug-in hybrid vehicles to reduce emissions. Hydrogen fuel cell technology should also play a role. And any efficiency standards should “be informed by what technology can realistically deliver and help keep vehicles affordable,” the company said in a statement.

Last year in the United States, a group of leading automakers reached a compromise on tailpipeemissions standards with California, which sought to impose tougher emissions standards than the Trump administration wanted. Toyota didn’t join that compromise agreement.

More recently, the Alliance for Automotive Innovation, an industry lobby group, argued in closeddoor meetings in Washington that the California compromise — which is expected to be a model for new standards from the Biden administration — is in fact not feasible for all of its members, according to two of the people with direct knowledge of the discussions. The chairman of the alliance is Reynolds, the Toyota executive.

The Biden administration wants to use tougher emissions rules to rapidly increase sales of electric vehicles. Congress could also approve billions of dollars for construction of charging stations as well as tax incentives for electric cars and trucks.

Don Stewart, a spokesman for the alliance, said he was unaware that any of the group’s representatives had said the California compromise was not feasible. The alliance supports standards roughly midway between what the Trump and Obama administrations had adopted, he said.

Toyota’s strategy is that, in the longer term, hydrogen fuel cell cars can still be a major technology for passenger cars, with gaselectric hybrids helping reduce emissions in the short term. However, hydrogen cars remain costlier, and hydrogen as a fuel for passenger cars isn’t widely available. Various studies have shown, meanwhile, that hybrids achieve more modest near-term emissions reductions.

Toyota is promoting itself as strongly backing a green transition, but in effect, it is opposing efforts that others say are crucial to a swift green transition.

Toyota’s lobbying also comes as the Japanese automaker’s political donations have come under scrutiny. In June, the nonprofit watchdog Citizens for Responsibility and Ethics tallied campaign contributions and found that Toyota was the largest corporate donor by far this year to Republicans in Congress who disputed the result of the 2020 presidential election.

According to a New York Times analysis, at least 22 of those lawmakers have also denied the scientific consensus on humancaused climate change.

Toyota initially defended its contributions, then changed course, saying it would halt its donations.

The automaker has begun lagging behind in fuel efficiency across its entire fleet, as it has pushed sales of larger trucks and sportsutility vehicles, which bring bigger profit margins. EPA figures show that Toyota has made relatively little progress on fuel economy over the past five years, going from an industry leader to part of the bottom tier, along with General Motors and Ford.

There are several factors that could ultimately force Toyota’s hand. For one, China, an important market for Toyota, has moved aggressively to require automakers there to make electric vehicles. That has spurred Toyota to start producing electric cars under a joint venture.

Mary Nichols, who negotiated with Toyota as the former chairwoman of the California Air Resources Board, the state’s clean-air regulator, said she had been surprised by Toyota over the last few years. “I think they, over the years, have produced really good technology, and that they’ve been pioneers,” she said. “But at this moment, they’ve definitely been caught flat-footed.”

 

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