Toyota chief Akio Toyoda to step down as world’s biggest carmaker wages EV battle

Akio Toyoda is stepping down as president of Toyota as the world’s largest carmaker battles to maintain its lead in a world shifting to electric vehicles, autonomous driving and other disruptive technologies.

Toyoda, 66, who is the grandson of the company’s founder and has led the company since 2009, will become chair. He will be replaced by Koji Sato, the company’s chief branding officer and simultaneously head of the high-end Lexus unit.

The handover comes as Toyota confronts what analysts view as a formidable range of strategic and technical challenges, with its 14-year stay at the pinnacle of the global car market under relentless attack.

Sato, 53 and a 30-year veteran of Toyota, will take over as the company overhauls its strategy on electric vehicles, a segment in which it has a far smaller range of models than rivals.

“Because of my strong passion for cars, I am an old-fashioned person in regards to digitalisation, electric vehicles, and connected cars. I cannot go beyond being a car guy, and that is my limitation,” Toyoda told reporters online on Thursday.

“The new team can do what I can’t do . . . I now need to take a step back in order to let young people enter the new chapter of what the future of mobility should be like.”

Sato told reporters there was “still more work to be done in software and hardware while polishing the value” of the cars that Toyota built.

Toyota for years delayed a large-scale rollout of electric cars to compete with offerings from Tesla, industry incumbents such as Nissan and Volkswagen, and emerging EV manufacturers in China.

It pledged in 2021 that it would invest $35bn in the shift to electric vehicles by 2030 but is under increasing pressure from investors to hone its strategy after the botched launch of the bZ4X, its first mass-produced model, which was recalled weeks after its launch last May. Production was resumed in October.

Japan’s largest carmaker has argued that a swift enforced shift to electric vehicles will increase emissions, because of the required expansion in production. It views hybrids, which combine a battery and petrol engine, as a cleaner interim solution.

The leadership change will take effect from April 1 and comes amid speculation that Toyoda is likely to be appointed as the next chair of Japan’s politically powerful Keidanren business federation. Toyoda, as a member of the automaker’s founding family, is expected to retain significant influence in his new role as chair.

Toyoda, who has consistently presented himself as a passionate “boy racer” car enthusiast, took over as head of Toyota one year after it overtook GM to become the world’s largest automaker.

In his first year in charge a scandal erupted around issues where the accelerator pedal in certain models became stuck, causing fatal accidents. Millions of cars were recalled worldwide and Toyoda was forced to testify before the US Congress on the crisis.

He also led the company through the destruction and factory shutdowns that followed Japan’s 2011 Tohoku earthquake.

Since those challenges he has shifted the company from a heavy focus on sales volume to profitability, with stringent cost controls. That allowed Toyota to generate record profits even as sales fell during the Covid-19 pandemic.

Sanshiro Fukao, a senior fellow at the Itochu Research Institute, said the management reshuffle was probably triggered by the accelerating shift to electric vehicles. “But it’s still unknown if the young president can fight enough against new rivals like BYD and Tesla, who are energy solution providers rather than EV manufacturers,” he added.