Toyota CEO questions Japan’s plans to ban conventional cars

Toyota Motor’s CEO Akio Toyoda questioned Japan’s plans to ban conventional cars only days after the automaker said it was reviewing its climate lobbying and intended for carbon neutrality by 2050.

The five investors, who collectively have around $500 billion in assets under management, talked to Reuters and said the automaker risks falling behind rivals that are rolling out electric vehicles while giving cover for other companies seeking to prevent big changes to meet climate goals.

Toyota signalled a shift in its climate change stance last month when it said it would evaluate its lobbying and be more transparent on what steps it was taking as it responded to rising activist and investor pressure.

But after three days, in his capacity as head of the Japanese automobile Manufacturers Association, Toyoda questioned the nation’s decision to prohibit new internal combustion-engined vehicles by 2035 in its quest for carbon neutrality.

“What Japan needs to do now is to expand its options for technology. I think regulations and legislations should follow after,” Toyoda said.

“Policy that bans gasoline-powered or diesel cars from the very beginning would limit such options, and could also cause the country to lose its strengths,” he added.

Investors who had welcomed the earlier statement of the automaker on lobbying said they were worried that Toyoda may not be on board with the strategies.

A Toyota spokeswoman said the automaker could not immediately comment on the investors’ concerns but would be addressing climate issues later in the week when it will discuss earnings.