Global Sales Leader Faces Survival Crisis
Toyota Chairman Akio Toyoda issued a stark warning in an NHK interview on July 19, stating that the company risks failing to survive in the electric vehicle era if it persists with traditional manufacturing methods. As the world’s best-selling car model, the Corolla has sold over 57 million units since its launch in 1966. However, Toyoda emphasized that the next-generation electric version of this iconic model will determine the company’s future.
In the interview, Toyoda remarked, "Unless Japan becomes a country chosen by every other country, it cannot survive." He highlighted that rapid technological evolution and the rise of Chinese automakers like BYD have posed severe challenges to Toyota’s traditional strengths. An NHK documentary delved into Toyota’s development base in Japan, revealing progress on the next-generation Corolla EV. Several engineers admitted on camera that Toyota lags behind Chinese competitors in development speed and manufacturing efficiency.
A Toyota engineer stated bluntly, "I think we are losing to China." This sentiment underscores internal concerns about the competitive threat from Chinese automakers. Despite Toyota retaining its position as the world’s top-selling automaker in 2025, its capabilities in electric vehicle technology and software integration have fallen behind. Toyoda stressed that the company faces "unprecedented transformation pressure" and must accelerate reforms to maintain its leading position.
New Platform Supports Multiple Powertrains, Flagship EV Project Canceled
Toyota CEO Koji Sato announced at the Japan Mobility Show in October of the previous year that the next-generation Corolla would be built on an all-new platform supporting various powertrain configurations, including battery electric, plug-in hybrid, hybrid, and internal combustion engines. He declared, "Whether it’s a battery EV, plug-in hybrid, hybrid, or internal combustion engine vehicle—whatever the power source—let’s make good-looking cars that everyone will want to drive!"
The NHK program showcased a prototype of the next-generation Corolla EV, which closely resembled the Corolla Concept unveiled earlier. The prototype featured a low-slung, sporty design, though Toyota has kept technical details tightly under wraps. However, Toyota’s recent decision to cancel its flagship electric vehicle, the Lexus LF-ZC, has raised questions about its commitment to electrification. The LF-ZC was expected to debut with advanced battery technology, but Toyota only stated it was "delaying the inevitable transition to pure electric vehicles" without providing specific reasons.
Toyota’s current electric vehicle lineup, including the bZ4X, C-HR, and bZ Woodland, has received lukewarm market responses and struggles to compete with Tesla or BYD. In the interview, Toyoda acknowledged that the company lags in battery technology and software integration, emphasizing the need to accelerate efforts to close the gap and maintain competitiveness.
Chinese Automakers Gain Ground, Can Toyota Reverse Its Decline?
BYD ceased production of vehicles powered solely by internal combustion engines in 2022, transitioning entirely to electric and plug-in hybrid models. By 2025, BYD had surpassed Ford to become the world’s sixth-largest automaker. BYD CEO Wang Chuanfu boldly claimed that the company would "truly become the No. 1 automaker globally in terms of scale" within the next five years. In contrast, while Toyota remained the global sales leader in 2025, its electric vehicle sales and technological capabilities have clearly fallen behind.
In the interview, Toyoda pointed out that Japanese automakers’ bureaucratic systems and over-reliance on the domestic market have become obstacles in global competition. He stressed that the next-generation Corolla EV would be a critical battle in Toyota’s transformation. If it fails, the company risks losing its leading position in the electric vehicle era. Toyota’s internal awareness of the crisis is evident, but whether it can catch up to Chinese automakers in the short term remains uncertain.
Toyota plans to launch the next-generation Corolla EV in 2026, though the exact release date and technical specifications have not been disclosed. As Chinese automakers continue their aggressive rise and Tesla maintains its lead, whether Toyota can reverse its fortunes with the electric version of its best-selling model will be a focal point for the automotive industry.
