Toyota shares surge 5% after announcing plans for next-gen battery EVs

Shares of Japanese automaker Toyota spiked 5% Tuesday after the company announced it will introduce a full lineup of battery electric vehicles with “next generation” batteries from 2026.

These will be developed and manufactured by a new EV unit called BEV Factory, which was established in May.

In a presentation Tuesday, Takero Kato, president of BEV Factory, said that Toyota is targeting a driving range of 1,000 kilometers (620 miles) for its EVs. BEV Factory aims to produce about 1.7 million vehicles by 2030, Kato said.

In comparison, the Tesla Model 3 has a range of about 430 kilometers, while the long-range model has a range of about 570 kilometers.

Toyota has a goal of achieving sales of 1.5 million all-electric vehicles per year by 2026, and selling 3.5 million all-electric vehicles annually by 2030.

Separately, the company is also developing a method for mass producing all-solid-state batteries for battery electric vehicles, and aims to commercialize this in 2027 to 2028. Toyota said it will be looking at a 20% improvement in cruising range for its all-solid-state batteries, compared to the current batteries.

This is along with a higher-specification model that is under research and development. This model aims for a 50% improvement in cruising range compared to the current product.

This could signal a continued shift in the automaker’s EV strategy under new CEO Koji Sato, who took over the helm in April. In February, Sato said that the company will “accelerate the development of BEVs with a different approach than before,” Nikkei reported.

Under previous CEO Akio Toyoda, Toyota had come under fire for its go-slow approach to all-electric cars, instead sticking with the belief that all-electric vehicles are one solution, not the solution, for the company’s goal to become carbon neutral. This strategy persisted even up to the end of 2022, when it unveiled new hybrid Prius models.

Toyota executives had argued they did not believe that all-electric vehicles will be adopted as readily as competitors think, citing reasons like roadblocks and saying that the market was not “mature enough.”

On its website, Toyota says that the materials needed to produce one long-range, all-electric vehicle battery could be used to produce six plug-in hybrid vehicle batteries, or 90 hybrid electric vehicle batteries.

The more aggressive push to all-electric vehicles could be seen in Kato’s presentation, with the BEV Factory president saying that “our aim is to change the future with BEVs … the next-generation battery EVs will adopt new batteries, through which we are determined to become a world leader in battery EV energy consumption.”