Toyota shares surge 5% after announcing plans for next-gen battery EVs

KEY POINTS

• The new unit, named BEV Factory, is aiming to produce electric vehicles with a range of 1,000 kilometers.
• BEV Factory will introduce a full lineup of battery electric vehicles with “next generation” batteries from 2026.
• This continues a more aggressive push by the Japanese automaker toward all-electric vehicles under new CEO Koji Sato.

Shares of Japanese automaker Toyota spiked 5% Tuesday after the company announced it will introduce a full lineup of battery electric vehicles with “next generation” batteries from 2026.

These will be developed and manufactured by a new EV unit called BEV Factory, which was established in May.

In a presentation Tuesday, Takero Kato, president of BEV Factory, said that Toyota is targeting a driving range of 1,000 kilometers (620 miles) for its EVs. BEV Factory aims to produce about 1.7 million vehicles by 2030, Kato said.

In comparison, the Tesla Model 3 has a range of about 430 kilometers, while the long-range model has a range of about 570 kilometers.

Toyota has a goal of achieving sales of 1.5 million all-electric vehicles per year by 2026, and selling 3.5 million all-electric vehicles annually by 2030.

Separately, the company is also developing a method for mass producing all-solid-state batteries for battery electric vehicles, and aims to commercialize this in 2027 to 2028. Toyota said it will be looking at a 20% improvement in cruising range for its all-solid-state batteries, compared to the current batteries.

This is along with a higher-specification model that is under research and development. This model aims for a 50% improvement in cruising range compared to the current product.

More pronounced shift to EVs?

Most notably, Toyota said that it has discovered a technological breakthrough that overcomes the challenge of battery durability in its all-solid-state batteries, and as such, the company is “reviewing its introduction to conventional HEVs and accelerating [its] development as a battery for BEVs.”

HEVs refer to hybrid electric vehicles, which are vehicles that are powered by a conventional internal combustion engine in combination with one or more electric motors.

This could signal a continued shift in the automaker’s EV strategy under new CEO Koji Sato, who took over the helm in April. In February, Sato said that the company will “accelerate the development of BEVs with a different approach than before,” Nikkei reported.

Under previous CEO Akio Toyoda, Toyota had come under fire for its go-slow approach to all-electric cars, instead sticking with the belief that all-electric vehicles are one solution, not the solution, for the company’s goal to become carbon neutral. This strategy persisted even up to the end of 2022, when it unveiled new hybrid Prius models.