Toyota is softening on critics of its EV push

Toyota Motor corp.

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wants to meet with critics who say it is behind rivals in the race for greener cars, nearly a year after the automaker pledged to spend billions of dollars to expand its electric car program.

Some investors and environmental groups have said Toyota is not committed to fully electric cars, pointing to the company’s cautionary statements about electric cars and its promotion of the competing gas-electric hybrid technology it invented.

Toyota has responded by engaging more with its biggest critics and exploring ways to improve its environmental image, people at the company said. The company has said it sees hybrids — of which it has sold more than any other automaker — as an important transitional technology at a time when charging infrastructure is still inadequate in many parts of the United States and the rest of the world.

Toyota’s environmental and electric vehicle image has become a concern for top executives, including President Akio Toyoda, the people said. Last year, Toyota outlined plans to spend 4 trillion yen, equivalent to $28 billion, on the technology over the next decade.

Toyota president Akio Toyoda has been one of the industry’s most prominent voices for caution around electric cars.


Kiyoshi Ota/Bloomberg News

The Danish foundation AkademikerPension, which manages about $19 billion on behalf of academic institutions and school employees, has battled with Toyota for nearly two years over what it sees as the automaker’s resistance to measures to promote electric cars.

Earlier this year, ahead of Toyota’s shareholder meeting, Akademiker tried to introduce a resolution proposing that the company disclose more information about its lobbying efforts for hybrid and gasoline-powered cars. Academic said Toyota rejected the proposal on the grounds that the fund had missed the submission deadline – by one day.

“We have never experienced anything like this before,” says Anders Schelde, Akademiker’s investment director. The fund responded by posting its questions online, along with a statement that said EV skepticism “put Toyota’s valuable brand at risk to the detriment of shareholder interests.”

Toyota recently invited Akademiker to Japan for meetings with top company officials. Mr. Schelde said he or the foundation’s executive director plans to visit Toyota in the next few months, in what would be their first face-to-face meeting.

“We are committed to an open two-way dialogue with investors and other stakeholders to ensure that their views are reflected in our management,” Toyota spokeswoman Shino Yamada said.

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Toyota has also interacted more with the environmental group Greenpeace, which for the past two years has placed the Japanese company at the bottom of its auto industry decarbonization ranking. Toyota has begun saving seats for Greenpeace at EV-related company events and recently invited representatives to a one-on-one meeting, according to Daniel Read, who works at the organization on energy and climate issues.

Toyota, like other traditional automakers, faces the challenge of reorienting its decades-old manufacturing operations to focus more on electric vehicles. The automaker aims to sell about 3.5 million of the vehicles a year by 2030, which would be about a third of its current annual sales.

Electric cars made up less than 1% of Toyota’s unit sales in the April-June quarter, compared with nearly 6% for Volkswagen AG

group, the automaker closest to Toyota in terms of scale.

Sir. Toyoda, Toyota’s boss, has been one of the industry’s most prominent voices of caution around electric cars. He has questioned whether the vehicles are as environmentally friendly as advertised and expressed doubt that consumers want them.

Toyota has said it believes hybrids can reduce carbon emissions as the battery supply chains and charging networks needed to support large fleets of electric cars are built globally in the coming decades. Hybrids – which accounted for nearly 30% of Toyota and Lexus’ global shipments last quarter – are helping the automaker meet tighter emissions regulations in markets such as Europe.

The Danish fund AkademikerPension is part of a group of investors who have said they are unhappy with Toyota’s climate-related lobbying.


Charlotte de la Fuente for The Wall Street Journal

Demand for hybrids also helped Toyota post a record operating profit of 3 trillion yen, or $21 billion, for the fiscal year that ended in March. Its share price on the Tokyo Stock Exchange has held up reasonably well, down 9% this year, while other automakers have suffered steeper declines.

Mr. Toyoda has been trying to understand why some investors and environmental groups remain unconvinced of the company’s electrification strategy. He has assigned an adviser to ask influential figures in the U.S. and European auto industry about their views on Toyota’s EV efforts and learn why it is not getting the credit that other automakers have, according to people familiar with those conversations. They said that feedback is reported directly back to Mr. Toyoda.

Unlike General Motors co.

and Ford Motor co.

Toyota has yet to set a date when all its global vehicles will be zero-emissions – a concern for some investors.


What must Toyota do to catch up in the EV space? Join the conversation below.

“Dialogues have been constructive, but there has been nothing to hang our hat on in terms of them changing their behavior,” said Michael Garland, assistant comptroller for corporate governance and responsible investment at the Office of the New York City Comptroller, who leads supervision of the city’s public pension funds. “If we measure companies by their actions, we’ve gotten more of a response from GM and Ford.”

Toyota’s Ms. Yamada said the company wanted to reduce carbon dioxide emissions as quickly as possible and aimed to offer customers many types of electric cars as well as cars with other powertrains.

Akademiker, the Danish fund, represents a group of investors – including the Church of England Pensions Board, Swedish pension fund AP7 and Nordic asset manager Storebrand – who have said they are unhappy with Toyota’s climate-related lobbying.

As of September, Akademiker, AP7 and Storebrand held more than $250 million in Toyota shares, a fraction of Toyota’s $200 billion market cap. The Church of England Pensions Board did not disclose the size of its share.

Anders Schelde, Akademiker’s investment manager, could visit Toyota within the next few months.


Charlotte de la Fuente for The Wall Street Journal

People at Toyota said company executives have been advised by public-relations specialists and others at the company to dial back negative comments about electric cars and instead highlight their benefits as well as Toyota’s extensive investment in the technology.

Sage Advisory Services, an investment management firm in Austin, Texas, which holds Toyota bonds, said it has sensed a shift in rhetoric.

Sage Advisory had approached the automaker last year with concerns about its EV stance, to which Toyota responded with its usual arguments, including about hybrid vehicles, Sage Vice President Emma Harper said. She said the points made sense to her but were difficult for the public to understand.

Recently, she said Toyota has “turned around and they’ve felt the change in the tide and how consumers and politicians and other stakeholders feel about the transition away from fossil fuel cars.”

Demand for hybrid cars helped Toyota post a record operating profit in the financial year to March.


Brittany Greeson for The Wall Street Journal

Write to River Davis at

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