Toyota (TYT.L), as the new largest vehicle manufacturer in the world, has been strangely quiet in the electric vehicle (EV) market. They are one of the most established names in the hybrid market, manufacturing some of the most popular hybrid models globally, including the Prius. However, they have not yet mass-produced a bespoke battery electric vehicle (BEV) for markets outside of China.

A few days ago, Toyota announced their first two US BEVs, releasing 2022. These new vehicles may mark a decided change in Toyota’s long term strategy, shifting away from their position backing hybrid and fuel cell vehicles over BEVs. 

Although they are relatively new to the wider BEV market, they have decades of experience making hybrid vehicles. This knowledge is likely to translate well into the manufacturing and performance of these new BEV models.

As a whole, this move could be viewed as a positive for their investors. Given global sentiment is now mostly in favour of EVs and green technologies in general, the move to bring BEVs into their wider production plans will likely lead to further rises in the TYT.L stock price in the future.

In addition to the BEV announcement, Toyota recently predicted record operating profits in the fiscal year ending March 31. In a time when the majority of carmakers have limited production capacity, due to global chip shortages and weakened economies, Toyota have actually predicted increases in production over the coming year. They appear to have been affected relatively little by chip shortages, which they claim is due to good communication with suppliers. 

While recent news announcements may have made the TYT.L stock price slightly too high to be appealing, it could be one worth keeping an eye on as their lack of production woes, and their move to embrace full-electric both may reflect positively on their future outlook.

Broker Consensus (15/02/21)

Analysts who cover this security

Broker Name Withheld
Jefferies – Takaki Nakanishi
Morningstar, Inc. – David Whiston
S&P Capital IQ