Toyota 2023 AGM. Source: Toyota Times
New details from Toyota’s recent general meeting have been released via the company’s media outlet Toyota Times including a shareholder question “Can Toyota beat Tesla?”, as well as discussions around the recent shareholder proposal calling on Toyota to disclose its lobbying efforts against progressive climate policies.
Toyota’s first shareholder proposal in 18 years was brought by a group of three asset managers, who collectively hold $400 million of Toyota stock, included Danish pension fund AkademikerPension, Norway’s Storebrand Asset Management and Dutch pension investment company APG Asset Management.
Toyota Times reports that the group was seeking to amend the Articles of Incorporation to include an annual review and report on Toyota’s lobbying activities and alignment with the Paris Agreement’s global framework for tackling climate change.
Toyota’s board of directors expressed opposition to the proposal, saying that “the ideal state of disclosure changes with time.
Generally, the articles of incorporation are intended to define the fundamental details of a corporation and its operations, and are not for stipulating matters related to specific business execution such as those in this shareholder proposal. Therefore, we would like to maintain our current Articles of Incorporation,” reported Toyota Times on Wednesday.
A shareholder asked about the discussions held with institutional investors. The response was provided by Accounting Group Chief Officer Masahiro Yamamoto, who had visited the investors in the lead up to the meeting.
Toyota Accounting Group Chief Officer Masahiro Yamamoto. Source: Toyota Times
“I actually went to speak with the Danish pension fund and other shareholders who were part of the joint proposal,” said Masahiro Yamamoto.
“First, I wish to thank you for all the comments on the information we disclose. This leads to kaizen, and we are very grateful.
“However, there were areas where we didn’t agree. We were asked whether continued use of the internal combustion engine (IC engine) would lead to carbon neutrality.
“The same comments were made when we declared our carbon neutrality commitment two years ago and when the popular opinion shifted behind electric vehicles (BEVs) as the only carbon-neutral solution.
“From the outset, however, Chairman Akio Toyoda has continued to emphasize that carbon neutrality is not just about cars; we must consider the overall picture of how energy is produced, transported, and used, and that while BEVs are of course important, we must prepare a range of options.
“Gradually, a growing number of people have come to embrace this mindset, and we believe that public sentiment has changed considerably.”
Yamamoto’s claims about the number of people “embracing the mindset” of Toyota’s diversified approach to decarbonising transport seems to be completely devoid of reality. Both Tesla and BYD hit record EV sales numbers in June while in Europe not a single hydrogen fuel cell vehicle was sold, a technology Toyota has sunk billions into over the past decade.
“Can Toyota beat Tesla?”
Tesla delivered a record 466,140 EVs in Q2 of 2023 bringing their first half yearly sales to 889,015. Over the same period Toyota sold less than 8,000 making up just 0.19% of Toyota’s 4.15 million vehicles sold in the first 6 months of 2023.
The fact that Tesla is selling 110 EVs for every one EV sold by Toyota should be highly worrying for the shareholders of the world’s largest automaker and some are starting to voice their concerns.
“In light of Toyota’s announcement that it will invest more in battery plants and begin producing BEVs in the U.S. in 2025, a shareholder questioned whether the company would be able to keep pace with Tesla.” noted Toyota Times this week providing further details of the recent general meeting.
Toyota 2023 AGM Executive Vice President Yoichi Miyazaki. Source: Toyota Times
Toyota’s executive vice president Yoichi Miyazaki responded to the questions explaining Toyota’s “multi-pathway approach” of decarbonising through diverse options.
“I love BEVs. Through BEVs, I want to change the future of cars, monozukuri, and work.”
“We want people to feel Toyota’s unique character in the BEV products we create and deliver.”
“Next, monozukuri. We want to change our vehicle structure and halve the length of our production lines, and reduce or eliminate physically strenuous work, protecting Japanese monozukuri and creating a happy workplace for an aging population.”
“I love BEVs. I said it twice. I wanted to convey this feeling, and with your support, we will do our best.”
Current chairman, former CEO and grandson of Toyota’s founder Akio Toyoda added to Miyazaki comments.
“I don’t know if love can beat Tesla. However, cars made by engineers who love them will move people’s hearts.”
Toyota continues to send mixed messages on its strategy. Top management is saying they “love” electric vehicles while also saying Toyota’s is sticking with a “diversified approach”, code for continuing hydrogen and hybrids.
Toyota’s chief scientist Gill Pratt continued the confusing messaging saying “from a scientific perspective, the optimal strategy for dealing with diverse conditions is to prepare a diverse range of solutions.”
As EV sales soar around the world Toyota’s diversified approach seems less like a legitimate strategy and more like a delaying tactic of a company that’s completely missed the boat.
Keyword: “I don’t know if love can beat Tesla:” Toyota’s mixed messages on EV transition