Give Toyota (TM) credit for flexibility and adaptability -- as well as a practical outlook - when it comes to corporate strategy.
The global No. 1 automaker in terms of sales disclosed this week to the Nikkei news organization that it will mass produce a battery-powered vehicle by 2020, probably in time for the next Olympic games in Tokyo. The move follows an accelerated adoption of EV technology by rivals responding to government pressure.
Previously, Toyota had downplayed battery-powered electric vehicles due to their limited range and the lack of a public recharging infrastructure. Instead, Toyota has brought out fuel-cell vehicles that run on hydrogen as a means of complying with zero emission regulatory standards.
Toyota will create an in-house team, perhaps by the start of the new year, to develop a new EV and answer basic questions such as which vehicle architecture to use -- Prius or Corolla -- and whether to rely on internally developed batteries or buy from the outside. It remains unclear whether the automaker may de-emphasize or delay further fuel-cell research.
Over the next month or two, Toyota executives are sure to elaborate on the reasons for the change of direction, as well as details such as where the new model will be sold and its expected performance characteristics. California and U.S. states mirroring California's zero-emission regulations could be the first markets to see the new model.
Battery-powered EVs, though still representing only a sliver of the new-vehicle market, have moved closer to the mainstream in the past few years because of improvements in range and affordability. Nissan (NSANY) , the leading EV manufacturer, sells the mass-market Leaf EV in the U.S., while Tesla's (TSLA) Model S and Model X are luxury cars.