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Toyota Motor (NYSE:TM) has reportedly planned to cut its electric vehicle production target for 2026 to a million cars, 30% below its earlier forecast amid a slowdown in global demand.
What Happened: The Japanese automaker’s decision was driven by a slowdown in the global EV market. Toyota has already informed its parts suppliers of the revised plan, Nikkei Asia reported on Friday.
Under the new strategy, Toyota aims to produce over 400,000 EVs in 2025 and more than double that number the following year. This marks a significant reduction from its previous target of 1.5 million EVs by 2026.
Despite the cut, Toyota still anticipates a substantial increase in EV sales. The company sold about 100,000 EVs in 2023 and around 80,000 from January to July this year, according to the report.
Toyota did not immediately respond to Benzinga’s request for comment.
Why It Matters: The reduction in Toyota‘s EV production targets comes amid a broader trend of cooling enthusiasm in the electric vehicle sector. Earlier, Jeep reportedly halted production of its Wrangler and Grand Cherokee models due to high inventory levels and sluggish sales.
Similarly, Ford Motor Co. and General Motors have also scaled back their EV ambitions. Ford recently decided to abandon plans for a fully electric SUV, reflecting a broader industry trend.
Moreover, Tesla Inc. CEO Elon Musk expressed skepticism about Volkswagen‘s proposed $5 billion investment in Rivian Automotive (NASDAQ:RIVN), amid reports that Volkswagen is considering factory closures in Germany.
The broader economic backdrop also plays a role. U.S. manufacturing activity has been contracting for five consecutive months, according to the Institute for Supply Management.
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Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
