Toyota is a hard company to figure out. It’s generally accepted to be a latecomer to electric vehicles and EV technology, but it repeatedly assures its customers that it has big plans for battery-powered cars. Then again, it still isn’t giving up that ill-fated hydrogen push, it doesn’t really seem to want hybrids to go anywhere in the long-term, and when we look at its lobbying efforts, we find a concerted effort against EVs. What gives, right?

That kicks off this midweek edition of Critical Materials as some of us, your humble author included, make our way to the New York Auto Show. Also on tap for today: Hyundai makes clear it has no plans to back off on the EV front, and we take a closer look at what Nissan’s future efforts mean for the U.S. market. 

30%: ‘We Will Not Back Down’

The new Environmental Protection Agency (EPA) fuel economy and emissions rules are the strictest ones the U.S. market has ever seen, and set the country on a path to a future that mostly runs on electric cars. But they aren’t as tough as the ones that were initially proposed. Some say that’s a realistic approach, given prices, range concerns and charging availability; others say the climate emergency demands faster action. 

But the new rules do favor hybrids, and you can thank Toyota’s lobbying for that, the New York Times‘ Hiroko Tabuchi reports: 

Speaking [at a dealer breakfast in 2023] was Stephen Ciccone, Toyota’s top lobbyist. He said the industry was facing an existential crisis — not because of the economy or fuel prices, but because of stronger tailpipe pollution limits being proposed in the United States. The rules were “bad for the country, bad for the consumer, and bad for the auto industry,” he said, according to a memo he later circulated among Toyota dealerships that was reviewed by The New York Times.

“For more than two years, Toyota and our dealer partners have stood alone in the fight against unrealistic BEV mandates,” he wrote, using the acronym for battery-electric vehicles. “We have taken a lot of hits from environmental activists, the media, and some politicians. But we have not — and we will not — back down.”

[The new EPA rules] relaxed major elements of an earlier, more stringent proposal. In particular, the final regulations were favorable to hybrid cars, those that run both on gasoline and electricity — giving a bigger role to a market that Toyota dominates.

Toyota, it appeared, had come out on top.

Pretty much all the automakers had objections to the proposed EPA rules, even the ones who have substantial and public EV plans. But Toyota took a different approach: 

Toyota said that it had steadily called on the E.P.A. to provide greater flexibility to meet the regulations. And it said its argument had prevailed, noting that several companies have recently announced plans to offer more hybrids rather than electric cars. “It appears that the industry has moved toward the position Toyota has consistently held,” it said.

The Times also reports that Toyota’s efforts had a big impact on getting dealers to push back publicly on EVs, despite them being the fastest-growing new car segment. 

In a statement to the Times, Toyota said the best way to reduce emissions “is to give consumers a variety of choices to meet their needs.” And it’s true that replacing purely gas cars with more hybrids—as Toyota’s whole lineup seems poised to go—is a vastly better option than the alternative. But it’s clear that when Toyota talks about winning, it means winning with its technology. And that’s probably not going to go over great with longtime fans who want to move into a Toyota-made EV. 

60%: Hyundai Keeps The EV Party Going

There are always two ways (at least) to look at the EV transition. One is that it can’t happen fast enough for climate reasons; the other is that automakers are still for-profit entities who need to keep those profits going until they can scale up to what’s inevitably coming, and that timing is hard to get right. The two goals are not in sync, because capitalism probably can’t fix climate change, but here we are.

Anyway, the Hyundai Motor Group continues to roll out some new gas-powered cars and more hybrids, some of which we will see at the New York Auto Show this week. But it’s also continuing to make huge, undaunted investments into EVs, as Reuters reports today: 

South Korea’s Hyundai Motor Group said on Wednesday it will invest 68 trillion won ($51 billion) over three years to bolster its growth potential in electric vehicles and new mobility business and separately hire 80,000 new employees.

More than half of the investment, or 35.5 trillion won, will be allocated for new research and development infrastructure and assembly lines for electric vehicles, the group said in a statement.

Another 31.1 trillion won will be slated for research and development in electric vehicles, including software-defined vehicles (SDVs) and battery technology, it said.

Across its three brands, the Hyundai Motor Group sold more EVs in 2023 than Ford or General Motors in the U.S. Clearly, it’s doing something right there. 

90%: More On Nissan’s ‘Arc’ To The Future, Including The U.S.

Earlier this week, Nissan released more details on The Arc, the name for its interim strategy to get from where it is now—sagging profits, falling sales and still feeling battered by a scandal in its top ranks—and a long-term plan for the 2030s and beyond. Here’s Automotive News today diving deeper, including into what this all means for the U.S.: 

Nissan is preparing three new batteries for electrified vehicles: a next-generation nickel-cobalt-manganese lithium-ion battery; a lithium iron-phosphate battery; and a solid-state battery.

To supply them, the carmaker plans to secure 60 gigawatt hours of additional capacity in the U.S. through the end of the decade. This will help the carmaker’s EVs meet local procurement requirements for government incentives.

Executives say 60 gigawatt hours is enough to supply about 600,000 EVs. It is part of a wider campaign to add 135 gigawatt hours of battery capacity globally through the fiscal year ending March 31, 2031.

And also:

Nissan’s assembly plant in Canton, Miss., will get an update in the fiscal year ending March 31, 2027, and its Smyrna, Tenn., assembly plant will be revamped by the fiscal year ending March 31, 2029.

Meanwhile, Canton and the Decherd, Tenn., powertrain factory will be overhauled for EV production in the fiscal year ending March 31, 2027. Modular manufacturing will achieve a 20 percent reduction in per-vehicle production time. 

So what Nissan is selling is a pretty hardcore acceleration of its entire business, including and especially on the EV front, to get ready for the end of this decade. But is Nissan up for this? It’d be an epic comeback story if it can pull this off, but that all remains to be seen.

100%: How Does This Play Out For Toyota In The Long Run?

I don’t doubt the company is serious about future EV development so it doesn’t get left behind long-term by new players from China, Korea and even Tesla. But how do you see this current strategy working out for them over the next few years, then into the 2030s and beyond? 

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