02:32 19-01-2026

Toyota's split development strategy for EVs and hybrids

Toyota continues to swim against the tide, officially cementing its split development strategy. While most automakers have tried to impose a single electrification scenario on the world, the Japanese company is betting on different technologies for different markets. In this arrangement, the US will not get the "best" electric offerings.

China is becoming Toyota's key EV region. It's there that the brand is ready to develop fully electric models created specifically for the local market. Already, the affordable bZ3X crossover with LFP batteries is sold in China, to be followed by the bZ7 sedan. These models are developed jointly with Chinese partners and are focused on price, digital features, and rapid updates—the very factors that currently define success in China.

Toyota is taking a completely different approach with the US. Here, the company is betting on hybrids and preserving internal combustion engines. In 2025, hybrids accounted for about 13% of the American market, and Toyota intends to strengthen its position in this very segment. The opening of a battery plant in North Carolina and investments of up to $10 billion in local hybrid production confirm these long-term plans.

The brand's philosophy is well illustrated by the GR GT project—a production supercar with a 4.0-liter twin-turbo V8 in a hybrid setup. For Toyota, this is not just a demonstration of power, but a question of identity. Akio Toyoda openly states that the engine remains a key element of the car and should not disappear for the sake of universal trends.

This approach comes at a high cost: in 2025, Toyota spent 1.3 trillion yen on research and development, while simultaneously investing in AI, autonomous driving, and partnerships with technology companies. But the bet is clear—the world will be fragmented, not uniform, and Toyota wants to be ready for all scenarios.

Toyota is taking a risk by rejecting the simple "all-in on EVs" strategy, but this very pragmatism could give it an advantage if the market never does choose a single path forward.