Toyota, the leading global car manufacturer, reported a 7% year-on-year increase in global output for January on Wednesday. This marks the 13th consecutive month of growth, attributed to robust demand in the United States. In addition, the company unveiled an $8 billion initiative to substantially expand a battery plant currently being built in North Carolina. Toyota has set an ambitious target of selling 1.5 million electric vehicles (EVs) annually by 2025.
Toyota’s global sales rose about 11% in January from a year earlier as growth in overseas markets such as the United States made up for declining sales in Japan. Both figures include the luxury Lexus brand.
The results show that Toyota is benefiting from rising consumer spending in the United States and other markets and a weaker yen that makes its vehicles more affordable for international buyers. They also put the company in an excellent position to take advantage of a shift toward electric vehicles, even though it has been slower than some of its competitors to make significant investments in EVs.
While General Motors (GM.N) and others have vowed to spend billions in recent years to develop a broad portfolio of all-electric vehicles, Toyota has taken a more cautious approach, arguing that hybrid technology it pioneered with the Prius will remain important along with investments in hydrogen cars. That strategy has sparked criticism from investors and activists who want to see the world’s largest automaker move more quickly toward a carbon-free future.
But as EVs have risen in popularity, Toyota has shifted gears, announcing plans to sell 5.5 million electrified vehicles annually by 2030, with at least 2 million being fully electric or fuel cell models. The automaker is also investing in a new generation of battery technology that can be used for more than one charge and is working to improve efficiency and reduce costs.
Toyota’s annual output climbed to a record 9.1 million units in the business year that ended in March, as factory disruptions related to COVID-19 and the pandemic eased. But the automaker warned that the lingering chip shortage continued to hamper production in some markets.
In addition to the broader boost from the lower yen, Toyota’s profit rose due to a lower tax rate in the United States and other factors. The company reported a net profit of 4.4 trillion yen ($42 billion), up from 3.0 trillion yen a year earlier. That was boosted by a lower tax rate in the United States, which helped lower the effective corporate tax rate to 21% from 35%. The company raised its profit forecast for the current fiscal year through March. It now expects a profit of 4.5 trillion yen, up from 3 trillion yen in previous guidance. It also boosted its dividend to 30 yen per share from 25 yen. That will bring the total dividend payout to 67 billion yen. The company also boosted its share buyback program to 100 billion yen.