Toyota Motor Corporation

Supplier engagement

Decarbonisation of the supply chain is key to achieving both fleet and manufacturing emissions reductions. Toyota is clearly engaging and collaborating with its suppliers to develop low-carbon drivetrains for internal combustion engine vehicles. Moreover, the Toyota Environmental Challenge 2050 programme has informed the company’s revised Green Purchacing Guidelines to enhance initiatives aimed at reducing Toyota’s fleet emissions throughout a vehicle’s lifecycle.

Low-carbon transition plan

Toyota published six challenges under the Environmental Challenge 2050 initiative. Analysis of internationally recognised scenarios such as the IEA’s 2°C Scenario, Beyond 2°C Scenario, New Policies Scenario and Mobility Model informed this initiative. While climate change responsibility sits at the highest levels of management and incentives for emissions reductions are in place throughout the company, Toyota’s objectives for a low-carbon transition are only reported in its Sustainable Data Book. More details on baseline levels and financial content would help assess Toyota’s alignment to the low-carbon pathway.

Fleet emissions pathway

Toyota currently has a significant gap between the emissions per passenger per kilometre and the low-carbon pathway (its ‘action gap’). This is primarily due to current consumer preferences in the US for larger passenger vehicles and SUVs. However, with plug-in hybrid versions of SUVs due to go on the market shortly and fuel cell electric versions of saloon models already available, Toyota could rapidly reduce its overall fleet emissions as well as close its ‘action gap’ in the US.

Trend in past emissions intensity

While Toyota has reduced the emissions intensity of its manufacturing in recent years, the rate of decrease is significantly slower than that required by the low-carbon pathway. Toyota expects to achieve further manufacturing efficiencies as it rolls out its New Global Architecture approach to vehicle design, engineering, and manufacturing.

Toyota commits to transforming itself “from a car making company into a mobility company”. It has published its intention to become a net zero company by 2050, with a 90 percent reduction of fleet emissions from its 2010 levels by that date.

Toyota’s cumulative hybrid vehicle sales are due to reach 15 million units in 2020. The company also plans to launch ten or more battery electric vehicle models by the early 2020s, sell at least 30,000 fuel cell electric vehicles per year also by  the early 2020s, and launch electric vehicles or electrified options for all models by the mid 2020s. However, Toyota also intends to roll out new conventional gasoline internal combustion engine powertrains in approximately 80 percent of its vehicle sales units by 2023.

Toyota has a section on its website dedicated to popularising battery electric vehicles, though it does not preferentially promote advanced low-carbon vehicles over internal combustion engine vehicles. The company is, however, exploring new business models to maintain profitability in a low-carbon economy, such as integrating home charging and power management products, fuel cell power generators, community transportation solutions and fuel cell electric buses.

Toyota has shown a consistent commitment to micro vehicles, which use less fuel per passenger than larger vehicles, and represent approximately 6 percent of its annual sales. It is also increasing its fuel cell electric vehicle sales. The company has also managed to reduce its manufacturing emissions per vehicle produced, though these emissions must be cut even further to align with the automotive industry’s low-carbon pathway. Likewise, while the company’s internal combustion engine fuel efficiency gains are on track, achieved primarily through hybrid technology, its share of sales from advanced low-carbon vehicles still falls below the industry’s targets.

Toyota could enhance its target setting to drive short and medium-term action and maintain focus to reach the long-term fleet emissions reduction target set for the automotive industry’s low-carbon pathway. For the medium term, Toyota is still heavily reliant on internal combustion engine and conventional hybrid vehicles, rather than low-carbon alternatives. It expects 90 percent of sales in 2030 to come from these conventional vehicles. Given this strategy, it is unclear how Toyota will reduce its fleet emissions at a sufficient rate to align with the automotive industry’s pathway towards a low-carbon economy.