Toyota Reverses Its EV Policy

Toyota Motor Corp. is making an “agonizing” shift in its attitude about battery-powered cars to meet China’s demand for EVs.

Sources tell Reuters the company is being forced to scrap plans to bypass battery-based EVs by leaping eventually from conventional gasoline-electric hybrids directly to hydrogen-powered fuel cells.

But China proposes to require that sales by automakers in the country include 8% battery-electric or plug-in hybrids by 2018, 10% in 2019 and 12% in 2020. Achieving those targets will require developing both types of powertrains almost immediately.

China’s policy grants no credit for conventional hybrids, which typically can travel only a few miles in all-electric mode. Toyota already makes a plug-in version of the Prius, which has a larger battery and longer electric-only range. But it isn’t clear if the Prius plug-in delivers sufficient range to qualify.

One Toyota executive grouses to Reuters that China’s new rules “are tough to the point it could wreck our fundamental business case.” But adds another, “We have no choice but to get over our EV allergy and come up with an electric car.”