In our previous column, we examined the actual state of rapid electric vehicle adoption in the Chinese market and global markets based on data. It can be said that the objective fact shown by data is that the electric vehicle market is growing quite rapidly, primarily centered on China. So, has the era finally arrived when hybrid cars, which have demonstrated an overwhelming presence in the energy-saving and eco-car sector for several decades, will be displaced by electric vehicles? We would like to examine this theme with data in this edition.

　The graph at the beginning shows the monthly trends in global sales volumes of electric vehicles (Battery EV: BEV) and hybrid vehicles (HV) (period: January 2021 to June 2023). BEV includes only 100% pure EVs, and PHEV sales figures are not included in the numbers. Similarly, hybrid car sales figures do not include mild hybrid or PHEV sales volumes.

■ Global hybrid vehicle sales are growing steadily. HVs are not "obsolete."

　As analyzed in our previous column, BEV sales volumes are growing at an astonishing pace, primarily centered on the Chinese market. However, as the graph data shows, HV vehicles are also increasing their sales volumes. As is well known, HV vehicles are a domain where Japanese automakers boast overwhelming competitiveness. Naturally, their main market is Japan. However, looking at the data for the top five countries in HV sales (the graph on the right above), we can see that Japan is not the only country where sales are growing. Even in China and the United States, where BEVs are experiencing rapid growth, HV vehicles are also increasing their sales volumes. It would be fair to say that HV vehicles are still strongly demanded by users worldwide.

　So, which automotive company sells the most HV vehicles globally? Needless to say, it is Japan's Toyota Motor Corporation. Most of the factors behind the growth in HV sales in the United States, China, and France are due to increased sales volumes by local Toyota subsidiaries. This goes without saying for the Japanese market. Only in South Korea has the Hyundai-KIA Group, rather than Toyota, secured the number one market share position in HV sales.

■ Hybrid cars derided as "transitional technology." Toyota bet on this.

　Toyota first introduced HV vehicles to the market in October 1997. It has been almost 30 years since then. From the late 1980s to the early 1990s, when Toyota was engaged in hybrid vehicle research and development, global automakers abandoned HV research and development at an early stage and withdrew. This was because they concluded that there was no need to invest enormous research budgets in "merely transitional technology that was also difficult to realize." The transitional period, needless to say, referred to the transitional period until the "era of full-scale BEVs" that was anticipated even at that time.

　However, the cost of dismissing hybrids as "temporary transitional technology" and "technically impossible" proved to be far too great for European and American automakers. From the perspective of decarbonization and fuel efficiency improvement, Toyota's hybrids achieved explosive global growth, which was decisive in Toyota becoming the world's largest automaker.

■ Is the "transitional era" finally coming to an end?

　Thirty years later, has the era finally arrived when hybrids will be displaced by electric vehicles? Let us return to the graph at the beginning. Looking at this data, at least at present, we cannot see a pattern of BEVs displacing HVs. Even in the United States and China, both countries that account for more than half of the global automotive market where the electric vehicle market is experiencing rapid growth, hybrid cars are still demanded by users and are increasing their sales volumes.

　According to Toyota's analysis, with the battery equivalent of one BEV, 90 HVs can be manufactured, and the CO2 reduction effect of these 90 HVs is estimated to be 37 times that of one BEV. (Source: Wall Street Journal, June 5, 2023 article) Which has a fundamentally lower environmental impact, BEVs or HVs, and whether BEVs are definitively the correct answer, is still unclear.

■ "Toyota bashing" is not a conspiracy theory. It is a manifestation of crisis awareness, like "a cornered rat biting a cat"

　It is whispered that behind the world's collective push toward electrification lies the aim of European and American manufacturers to "destroy Toyota." Is this merely a conspiracy theory? As our company has been monitoring the automotive sector, we believe that there is undeniably significant anxiety, particularly among European manufacturers. However, viewing this solely from a Japanese perspective and interpreting it as a "Toyota-destroying conspiracy" also feels uncomfortable. Our understanding is that the recent rapid global movement toward BEV adoption is rather a manifestation of crisis awareness that could be described as "a cornered rat biting a cat."

　When traveling abroad, Japanese cars are invariably running in every country. This is something to be very proud of. Those who have traveled overseas will surely empathize with this. However, from another perspective, for people who love their own country, this may often be a complex sight. The automotive industry, which has special scale and significance, is always integrated with national strategy. Politicians in any country would prefer to conduct official duties in vehicles of their own national brands if possible. The automotive industry is not just any industry. Just as it is in Japan, the automotive industry generates employment and nurtures peripheral industries in many countries.

　The fear that this automotive industry might be completely destroyed by Toyota's hybrid vehicles is probably difficult to understand from a Japanese perspective. For such countries, electric vehicles could be said to be the only means to aim for a "desperate comeback reversal." When looking ahead to the future of the global automotive industry, it may be necessary to exercise imagination about the current landscape as seen from positions different from Japan's perspective.

■ We should listen more carefully to Toyota's "multi-pathway strategy"

　In fact, one of the companies thinking most seriously about this is Toyota Motor Corporation. The strategy that Toyota arrived at precisely because of its experiences of often clashing with local people when expanding overseas and accumulating efforts at dialogue is the multi-pathway strategy. Toyota's multi-pathway strategy reflects serious concern that just as Toyota's domination of the global automotive market with HVs alone would create major distortions in the world economy, an automotive industry focused entirely on electric vehicles would impose irreversible burdens on economic society and the global environment. We feel that an attitude is required that excludes "conspiracy theories," "excessive optimism," and "BEV fundamentalist thinking," and seriously listens to the true intentions behind Toyota Motor Corporation's multi-pathway strategy.