Toyota to spend $A18.5bn on battery development as it hedges bets on hybrids

2021 Mirai FCEV. Source: Toyota
2021 Mirai FCEV. Source: Toyota

Japanese automotive giant Toyota expects to invest approximately 1.5 trillion yen, or around $A18.5 billion, on the development and supply of electric vehicle batteries by 2030.

The company – which has so farn trailled its rivals in the development of fully electric vehicles – says it also expects to be able to reduce the battery cost per vehicle by 50% in the second half of the 2020s.

Toyota, still the world’s largest automaker by volume, is preparing a full line-up of electrified vehicles as a direct effort to combat “the world’s concentration of CO2 [which] has been increasing since the Industrial Revolution.”

In separate online presentations to the media and Toyota investors, the company’s leadership team, led by chief technology officer Masahiko Maeda, declared that “There is no time to lose when it comes to reducing, in all aspects, the amount of CO2 emitted by humankind” .

He noted that the CO2 reduction of a single battery electric vehicle is the same as that of three hybrid electric vehicles for which the company is best known, hence the move to full battery electric vehicles (BEVs).

Toyota will not stop making hybrid electric vehicles, it is looking to focus on zero-emissions vehicles such as BEVs and fuel cell electric vehicles (FCEVs) “in regions where renewable energy is abundant.”

Moreover, they are even acknowledging the use of bioethanol in “some regions such as South America” in being “put to practical use as a response to CO2 reduction.”

But the focus of Toyota’s briefings on Tuesday was the preparation of a “full line-up of electrified vehicles” and the need to ramp up battery development and supply.

Already Toyota offers a range of batteries, suited for different vehicle needs: For example, Toyota’s hybrid (HEV) batteries focus on “power output, or in other words, instantaneous power”, whereas its batteries for plug-in hybrid EVs (PHEVs) and BEVs focus on capacity, or what the company terms as “endurance”.

In terms of battery design, Toyota’s HEV batteries are either nickel-metal hydride or lithium-ion batteries and has been working to improve both the cost and endurance of its lithium-ion batteries for PHEVs and BEVs.

Toyota’s Chief Technology Officer Masahiko Maeda also acknowledged that the company is “developing a further advanced new type of lithium-ion battery for introduction in the second half of the 2020s.”

But it was Toyota’s battery plans for the future that were of most interest, starting with the promise to reduce the cost of batteries by 30% or more by developing new materials and structures.

Toyota also hopes to improve the power consumption of its vehicles by 30%, starting with the Toyota bZ4X, which was announced back in April. Toyota expects that improved vehicle power consumption will result in improved power efficiency and lead to reduced battery capacity, which will in turn result in a cost reduction of 30%.

Toyota is therefore aiming at, through the integrated development of vehicles and batteries, a battery cost reduction per vehicle of 50% compared to the Toyota bZ4X in the second half of the 2020s.

A suite of next generation batteries was also promised, including liquid batteries as well as all-solid-state batteries – with the latter already being tested, after Toyota began test runs on a test course of a vehicle equipped with all-solid-state batteries.

This allowed the company to also acquire license plate registration for vehicles equipped with all-solid-state batteries and conducted test drives.


“All-solid-state batteries are expected to have higher output because of the fast movement of ions within them,” said Masahiko Maeda.

“Therefore, we would like to take advantage of the favorable properties of all-solid-state batteries by also using them in HEVs. On the other hand, we found that short service life was an issue. To solve this and other issues, we need to continue development, mainly of solid electrolyte materials.”

Finally, Toyota is also focusing on the development of a battery supply system that will underpin its development and sale of BEVs.

“With the rapid expansion of electrified vehicles, we are working to build a flexible system that can stably supply the required volume of batteries at the required timing while meeting the needs of various customers in each region around the world,” said Maeda.

“In pursuit of our battery development concept of achieving batteries that can be used with peace of mind, we will establish the needed technologies by conducting a certain amount of in-house production, and we will cooperate and collaborate with partners who understand and will put into practice our concept. We will also proceed with discussions with new partners in some regions.”

Already expecting battery supply of 180GWh, Toyota promised to ready 200GWh or more “if the dissemination of BEVs is faster than expected.”

All of Toyota’s growing focus on battery development and supply will necessitate investment of approximately 1.5 trillion yen by 2030, or around $AU18.5 billion.

“By establishing a system for both development and supply, we will promote the dissemination of electrified vehicles, including BEVs,” Maeda concluded.

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