At the beginning of the decade, car companies rushed to set expiration dates for combustion engines. It's as if there was a race to see who could go all-in on EVs first, with companies like Volvo and Bentley pledging to abandon gas cars by 2030. Others, like Ford of Europe, promised it would only sell electric passenger cars by the end of the decade. Other brands set targets for EVs to represent a large share of their annual sales. Porsche, for instance, hoped electric cars would account for more than 80 percent of total deliveries by 2030, while Audi projected it would discontinue ICE cars altogether by 2032. Yet, many of these goals have since been delayed; some by a few years, while others have been indefinitely postponed. Notice the pattern? Automakers jumped on the EV bandwagon, assuming demand would skyrocket. But while most announced plans to phase out combustion engines entirely, two major players bucked the trend: BMW and Toyota. Neither BMW nor Toyota committed to aggressive EV-only strategies. Instead, the best-selling luxury brand and the world’s largest car manufacturer argued that EVs wouldn’t be suitable everywhere in such a short timeframe. Not only are electric cars generally more expensive than their gas counterparts, but the charging infrastructure is still underdeveloped in many parts of the world. BMW has stayed true to its "Power of Choice" philosophy, offering customers what they want, whether it’s gasoline, diesel, plug-in hybrid, or electric. Come 2028, the company will even launch a hydrogen-powered vehicle based on the X5, featuring a fuel-cell setup co-developed with Toyota. Then there's the legislation accelerating the demise of conventional drivetrains. BMW CEO Oliver Zipse has repeatedly voiced concern about the European Union’s planned 2035 ban on new gas-powered car sales. He argues the policy would severely limit consumer choice and devastate the automotive industry by forcing companies to cut tens of thousands of jobs: 'We don’t believe in technically one-sided regulations that limit supply. As a standalone technology, e-mobility leads down a dead-end street—that much is now clear. The differences are simply too great, even just within Europe. Europe needs a top-performing automotive and supplier industry. We are fighting for this and pushing back against negative developments.' That’s not to say BMW is ignoring decarbonization. The company has poured more than €10 billion into the Neue Klasse, its largest single investment ever. The new iX3 leads a wave of upcoming electric vehicles, including an i3 sedan arriving next year. A fully electric iX5 has already been confirmed, with many more zero-emission models to follow in quick succession. Still, BMW remains committed to combustion engines, even large-displacement ones, such as the M division’s inline-six and V-8. Both are being reworked to meet Euro 7 regulations, ensuring a future for the 3.0- and 4.4-liter powertrains in performance models. Even diesel isn’t disappearing, with BMW already confirming it for the next-generation X5 due in 2026. Toyota, meanwhile, plans to use its upcoming gasoline engine for everything. Andrea Carlucci, Toyota Europe’s Vice President of Product Strategy and Marketing, recently said: "We are trying to optimize the new engine for any type of application, whether it’s electric, hybrid, or hydrogen." Last year, Toyota chairman Akio Toyoda made headlines by predicting that EVs would never exceed a 30 percent global market share. Regardless, Toyota’s current approach mirrors BMW’s by refusing to artificially limit customer choice. It’s not betting everything on EVs at the expense of combustion engines, especially given its long-running success with hybrids since the Prius debuted in 1997. Toyota is also investing heavily in alternative solutions to reduce emissions while keeping engines alive. It’s working with Mazda and Subaru to develop synthetic, carbon-neutral, and bio-based fuels. The company has even been testing hydrogen-burning combustion engines, fitting GR Yaris and GR Corolla experimental prototypes with modified versions of the 1.6-liter turbocharged three-cylinder engine. Because BMW and Toyota never had to overhaul their strategies, both now enjoy a competitive advantage. Just look at Porsche, which must now make unexpected investments to replace the first-generation Macan with a new gas-powered crossover that wasn’t originally planned. Likewise, the 718 Boxster and Cayman will once again receive combustion engines, while a three-row SUV initially intended to be electric-only will launch first with conventional powertrains. These unplanned course corrections are costly. But that’s not to say EVs are in decline. Despite all the AI-generated anti-EV slop spreading online like a disease, electric vehicle sales continue to grow, just not as quickly as automakers had hoped. According to the European Automobile Manufacturers’ Association (ACEA), EVs represented 17.7 percent of total new car sales in Europe during the first eight months of the year, up from 14.1 percent. In 2024, over 20 percent of new cars sold globally were electric, according to the International Energy Agency (IEA). The IEA also reported that global EV shipments rose by more than 25 percent year over year, exceeding 17 million units. For 2025, it expects another 25 percent increase to more than 20 million units, with China accounting for about 14 million EVs, or roughly 60 percent of its new-car market. Because BMW and Toyota never had to overhaul their strategies, both now enjoy a competitive advantage. BMW and Toyota appear well prepared for whatever the future brings. By sticking to a multi-energy strategy established years ago, both automakers are positioned to serve all market segments around the world, regardless of how quickly the shift to electric power unfolds. The only safe prediction is that some regions will transition far faster than others. In 2024, for example, EVs made up 89 percent of new car sales in Norway, according to the Norwegian Road Federation (OFV). Meanwhile, a study by Experian Automotive found that only 9.2 percent of cars sold in the United States last year were fully electric. Such stark regional disparities are likely to persist for years, reinforcing the view that BMW and Toyota took the right approach.
