Toyota Makes a Change at the Top as a Toyoda Steps Aside

Akio Toyoda, the scion chief of the Japanese automotive giant Toyota, will make way for a younger successor as the company struggles to adapt to the world’s growing demand for electric vehicles.

Mr. Toyoda, who has been a vocal skeptic of the global efforts to shift to battery-powered electric cars, will step down as chief executive and become the company’s chairman on April 1, Toyota said Thursday. He will be succeededby Koji Sato, a top executive at Toyota’s luxury subsidiary Lexus.

Over more than 13 years, Mr. Toyoda, the grandson of the company’s founder, turned around Toyota’s finances and helped it maintain its position as one of the world’s largest and most important automakers through crises both external and internal. But his reluctance to embrace the auto industry’s turn toward electrification has made him the subject of fierce criticism and raised concerns among some shareholders that the company, which once led the world in the development of eco-friendly cars, could be left behind.

“A carmaker is all that I am, and I see that as my own limit,” said Mr. Toyoda, 66, explaining why he was passing the baton. Mr. Sato “has a mission to transform Toyota into a mobility company,” he added. “I expect this new team to go beyond the limits that I cannot break through.”

A video introducing Mr. Sato showed him and Mr. Toyoda putting an all-electric Lexus through its paces. In 2021,Lexus pledged that by 2030 battery-powered cars would account for allof the luxury brand’s sales in the United States, Europe and China.

The Rise of Electric Vehicles

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  • Battery Recycling: As sales of electric cars and trucks take off, the race is on to recycle used lithium-ion batteries — but few will be available to reuse for a decade or more.
  • Mail Trucks: In a win for the Biden administration, the United States Postal Service said it would spend nearly $10 billion to create one of the largest electric truck fleets in the nation.

During his time as president, Mr. Toyoda successfully navigated the company through a series of challenges that threatened its position as one of the world’s top automakers. When he took over in 2009, the global financial crisis had put the company in the red for the first time since 1950, casting a pall over its prospects. And he was immediately confronted with an international recall over stuck accelerator pedals that eventually forced him to testify in front of a U.S. House committee investigating the company’s actions.

The company’s response to those challenges made it stronger. The lessons learned from disruptions to Toyota’s famously tight supply chains following Japan’s 2011 earthquake and tsunami helped prepare the company for the coronavirus pandemic, leaving it better situated than its rivals to meet the surging demand for cars during the last several years and winning it the title of the world’s best-selling automaker.

Still, “these 13 years have been a period of struggling to survive one day after the next,” Mr. Toyoda said in his remarks.

The Toyoda family has had a prominent role in the company’s management since 1937, when Toyota was spun off from an automatic loom manufacturer founded by Sakichi Toyoda. Akio Toyoda’s grandfather and father both led the company, and he was groomed for decades to take his place at its head, working his way up through the company’s ranks.

Although his family name undoubtedly eased his path to the top, there were no guarantees that he would make it there. He alsospent a decade training to race cars, participating in grueling endurance trials in preparation to become the company’s “master driver” a role in which he personally test drove new models.

He is credited with making Toyota a leader in more energy efficient vehicles — symbolized by its best-selling Prius, a hybrid-electric car — but Mr. Toyoda has been slow to respond to the automotive industry’s recent movement toward full electrification.

Toyota in 2017 exited an early partnership with Tesla, and Mr. Toyoda was flummoxed when the market cap of Elon Musk’s electric car company surpassed that of his own company. As competitors in the United States and elsewhere embraced all electric vehicles and as governments and automakers revealed plans to phase out combustion engines, Mr. Toyoda insisted that the world wasn’t yet ready to make the leap, arguing that many of the company’s customers, particularly in the developing world, would continue to rely on fossil fuels. Toyota, he insisted, would continue to manufacture its pioneering hybrid vehicles, combining electric motors and internal combustion engines, for decades to come.

In an interview published by Toyota this month, Mr. Toyoda said that his views on battery vehicles had been misrepresented by reporters hungry for conflict.

“I’ve never said BEVs are wrong,” he said, using an abbreviation for battery-electric vehicles. “BEVs are an important option. However, they may not be the only option. That point just didn’t get across.”

As competitors stake out larger claims on the growing market for electric cars, however, Toyota has struggled to catch up. Its first mass-produced all-electric car — one of many planned models — faced a recall soon after its introduction last year. And the company has had little success so far in commercializing its big bet on hydrogen-fueled passenger vehicles. The company has also lobbied against stricter emissions standards and rules mandating electric vehicles in markets around the world.

In his remarks Thursday, Mr. Toyoda said that his decision to hand over the reins had been prompted by the retirement of the current chairman, Takeshi Uchiyamada. Mr. Sato had been selected, he said, because he is young, he “loves cars” and he worked “to embrace Toyota’s philosophy, techniques, and practices.”

The 53-year-old Mr. Sato has spent his entire career at Toyota or its subsidiaries, joining the company in 1992 after graduating from Tokyo’s prestigious Waseda University. He became Lexus’s chief engineer in 2016 and rose to become its president before being promoted to Toyota’s chief branding officer.

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