Toyota

Toyota, a company that started with a loom and a dream, and revved its way to becoming the world’s largest automotive manufacturer. Yes, you heard right, loom – as in, the kind that makes fabric! This isn't just about cars; it's about a family legacy, a revolutionary approach to manufacturing, and a company that's continuously shaped the automotive industry.

Founded by the visionary Kiichiro Toyoda in 1937, Toyota's roots extend further back to Toyota Industries, the machine company founded by his father, Sakichi Toyoda. From their first Type A engine in 1934 and the Toyota AA, the family was already laying the groundwork for a transportation revolution. Imagine, creating a groundbreaking car in the 1930's – a true testament to vision and innovation. Then, after World War II, Toyota strategically learned from the Americans, birthing "The Toyota Way," and "The Toyota Production System" – practices so revolutionary, they became textbooks for business schools!

Fast forward to the 1960s, and the Toyota Corolla is born – the car that would become the bestselling vehicle of all time. But Toyota didn’t stop there; fueled by Japan’s booming economy, they expanded globally, becoming the behemoth we know today. In 2012, they became the first to produce over 10 million vehicles in a year, a number that continues to grow. Of course, with every success comes new challenges. We'll explore their leadership in hybrid technology with the iconic Toyota Prius, but also dissect the criticisms surrounding their approach to electric vehicles.

Beyond the cars themselves, we'll uncover the interconnected web of brands under the Toyota umbrella, from Lexus to Daihatsu and their various partnerships around the globe. Think of it as a family tree, and you’ll find that Toyota's reach extends far and wide with stakes in Subaru, Mazda, Suzuki, and even tech giant, Panasonic.

So, whether you're a car enthusiast, a business guru, or just curious about how one company rose to the top, this is a ride you won't want to miss. Let's get under the hood and explore the Toyota story.

History

1920s-1930s: Toyota's Foundations: From Looms to Automobiles

The story of Toyota begins not with automobiles, but with looms. In 1924, Sakichi Toyoda invented the groundbreaking Toyoda Model G Automatic loom. This invention not only revolutionized the textile industry but also introduced the principle of jidoka, meaning the machine stops itself when a problem occurs. This principle would later become a cornerstone of the Toyota Production System. These looms were manufactured using a small production line. In 1929, the patent for the automatic loom was sold to the British company Platt Brothers, generating the crucial starting capital that would pave the way for automobile development.

Under the guidance of the founder's son, Kiichiro Toyoda, Toyoda Automatic Loom Works established an Automobile Division on September 1, 1933, and formally declared its intention to begin manufacturing automobiles on January 29, 1934. A prototype Toyota Type A engine was completed on September 25, 1934, and the company's first prototype sedan, the A1, was completed the following May. Recognizing his limited experience with automobile production, Kiichiro initially focused on truck production. The company's first truck, the G1, was completed on August 25, 1935, and debuted on November 21 in Tokyo, becoming the company's first production model. The G1, modeled on a period Ford truck, was sold for ¥2,900, which was ¥200 cheaper than the Ford truck, reflecting the company's early strategy. A total of 379 G1 trucks were ultimately produced.

In April 1936, Toyoda's first passenger car, the Model AA, was completed. The sales price was ¥3,350, which was ¥400 cheaper than Ford or GM cars, highlighting its commitment to affordability. The company's plant at Kariya was completed in May. In July, the company fulfilled its first export order, sending four G1 trucks to northeastern China, marking the beginning of its international trade. On September 19, 1936, the Japanese imperial government officially designated Toyota Automatic Loom Works as an automotive manufacturer.

Initially, vehicles were sold under the name "Toyoda" (トヨダ), derived from the family name of the company's founder, Kiichirō Toyoda. However, in September 1936, the company held a public competition to design a new logo. Out of 27,000 entries, the winning entry was the three Japanese katakana letters for "Toyoda" in a circle. Nevertheless, Rizaburo Toyoda, who had married into the family and was not born with that name, preferred "Toyota" (トヨタ) for several reasons: it took eight brush strokes (considered a lucky number) to write in Japanese, it was visually simpler (without the diacritic), and it featured a voiceless consonant instead of a voiced one (voiced consonants are considered to have a "murky" or "muddy" sound compared to voiceless consonants, which are "clear"), which was seen as more modern and sleek.

Furthermore, since toyoda literally means "fertile rice paddies," changing the name also prevented the company from being associated with traditional farming. The newly formed word was trademarked, and the company began trading on August 28, 1937, as the Toyota Motor Company Ltd. Kiichiro's brother-in-law, Rizaburo Toyoda, was appointed the firm's first president, with Kiichiro as vice-president. Toyota Automatic Loom Works formally transferred automobile manufacturing to the new entity on September 29, 1937.

The Japanese government supported the company by restricting foreign competitors Ford and General Motors from importing automobiles into Japan, creating a more favorable environment for Toyota's growth.

At the onset of World War II, Toyota shifted almost exclusively to producing standard-sized trucks for the Japanese Army, which paid one-fifth of the price in advance and the remainder in cash upon delivery, demonstrating the close link between the company and the government during wartime.

1940s: Navigating War and Rebuilding

The 1940s were a tumultuous period for Japan and for Toyota. As World War II raged, Japan suffered extensive damage, and Toyota's plants, which had been repurposed for the war effort, were not spared. On August 14, 1945, just one day before the surrender of Japan, Toyota's Koromo Plant was bombed by the Allied forces, marking a significant blow to the company's infrastructure. After the surrender, the U.S.-led occupying forces prohibited passenger car production in Japan. However, automakers like Toyota were permitted to begin building trucks for civilian use, in an effort to rebuild the nation's infrastructure. The U.S. military also contracted with Toyota to repair its vehicles, providing the company with some much-needed income during the challenging postwar period.

By 1947, an emerging global Cold War between the Soviet Union and the U.S., who had been allies in World War II, began to reshape global priorities. U.S. policy shifted (the "Reverse Course") from punishing and reforming Japan to ensuring internal political stability, rebuilding the economy, and to some degree, remilitarizing the country. Under these new policies, in 1949, Japanese automakers were allowed to resume passenger car production. However, at the same time, a new economic stabilization program designed to control inflation plunged the automotive industry into a serious shortage of funds, while many truck owners defaulted on their loans. Ultimately, the Bank of Japan, the country's central bank, bailed out the company, demanding that Toyota implement a series of reforms, highlighting the precarious situation that the company faced at this time.

1950s: From Crisis to Global Ambition

As the 1950s began, Toyota emerged from its financial crisis as a smaller company, having closed factories and laid off workers. Meanwhile, the Korean War broke out, and due to its close proximity to the battlefront, the U.S. Army placed an order for 1,000 trucks from Toyota, providing a crucial boost that helped to rapidly improve the struggling company's business performance. In 1950, company executives, including Kiichiro's cousin Eiji Toyoda, embarked on a trip to the United States where they trained at the Ford Motor Company and observed the operations of dozens of U.S. manufacturers. The knowledge they gained during this trip, combined with the company's experience in making looms, gave rise to The Toyota Way (a management philosophy) and the Toyota Production System (a lean manufacturing practice), which ultimately transformed the company into a leader in the manufacturing industry, demonstrating the importance of adapting and learning from other industries.

Toyota began developing its first full-fledged passenger car, the Toyopet Crown, in 1952. Prior to the Crown, Toyota had been outsourcing the design and manufacturing of auto bodies, which were then mounted on truck frames made by Toyota. The project was a major test for Toyota, as it needed to build its own bodies and develop a new chassis that would be comfortable, but also robust enough to withstand the muddy, slow, unpaved roads common in Japan at the time. This project had been championed for many years by founder Kiichiro Toyoda, who sadly died suddenly on March 27, 1952. The first prototypes were completed in June 1953 and underwent extensive testing, before the Crown went on sale in August 1955. The car was met with positive reviews from around the world, highlighting the company’s capacity to create quality vehicles.

After the introduction of the Crown, Toyota began aggressively expanding into the export market. The company entered Saudi Arabia for the first time in 1955 with Land Cruisers, following an agreement reached with Abdul Latif Jameel (founder of his company of the same name). Toyota also brought Land Cruisers into neighboring Yemen in 1956. In 1958, Toyota established a production facility in Brazil, the company's first outside of Japan, which marked a new step in the company's expansion strategy.

Toyota entered the United States market in 1958, attempting to sell the Toyopet Crown. However, the company faced challenges almost immediately. The company had to confront for the first time how its name sounded to native speakers of the English language. Namely, "Toyota" has the English word "toy" in its first syllable. Toyota Motor Sales, USA's first sales administrator James F. McGraw bluntly told his new Japanese supervisors after joining the company in 1959: "'Toy' sounds like a toy and toys break". The Crown was ultimately a flop in the U.S. market, with buyers finding it overpriced and underpowered because it was designed for endurance on the bad roads of Japan, not high-speed performance on the well-maintained roads of America. In response, exports of the Crown to the United States were suspended in the early 1960s in favor of the Land Cruiser and the Tiara, which reflected its capacity to learn from its mistakes.

After Kiichiro's death, his cousin Eiji Toyoda led the company for two decades, guiding it through a critical period of growth and development. Eiji helped establish the company's first plant independent from the Loom Works plant, marking a new era for the company's growth.

1960s-1970s: A Period of Expansion and Strategic Partnerships

At the start of the 1960s, the Japanese economy was experiencing a boom, a period that came to be known as the Japanese economic miracle. As the economy grew, so did the income of everyday people, allowing them to purchase vehicles. Concurrently, the Japanese government invested heavily in improving road infrastructure. To capitalize on this opportune moment, Toyota and other automakers began offering affordable economy cars like the Toyota Corolla, which would eventually become the world's all-time best-selling automobile, demonstrating its successful understanding of the market demands.

Toyota also found success in the United States in 1965 with the Toyota Corona compact car, which was redesigned specifically for the American market with a more powerful engine, signaling the importance of adapting products for different audiences. The Corona helped to increase U.S. sales of Toyota vehicles to more than 20,000 units in 1966 (a threefold increase) and propelled the company to become the third-best-selling import brand in the United States by 1967, showcasing its growing presence in the American market. Toyota's first manufacturing investment in the United States came in 1972 when the company struck a deal with Atlas Fabricators to produce truck beds in Long Beach, in an effort to avoid the 25% "chicken tax" on imported light trucks. By importing the truck as an incomplete chassis cab (the truck without a bed), the vehicle only faced a 4% tariff. Once in the United States, Atlas would build the truck beds and attach them to the trucks, demonstrating its ability to find creative strategies to thrive in different markets. The partnership proved successful, and two years later, Toyota purchased Atlas, integrating the operation into the company.

In Southeast Asia, Toyota made significant efforts to establish domestic production in the Philippines and Indonesia in the early 1970s. In the Philippines, it partnered with local company Delta Motor Corporation, assisting them with capital procurement and technology transfers. In 1973, Delta Motor commenced operations at a new plant, initiating local production of engine blocks for the Toyota Corona 12R engine and other parts. In Indonesia, Toyota established Toyota Astra Motor as a joint venture with local partner Astra International in 1971, and conducted significant retooling at the PT Gaya Motor assembly plant. The plant began assembling various models, including the Toyota Corona, Toyota Land Cruiser, large trucks, and the Toyota Corolla, with production surpassing 10,000 vehicles by 1973. For both countries, Toyota developed a basic utility vehicle (BUV) with local partners to meet local needs and support technology transfers, in response to domestic production policies in Asia. The first prototype of the BUV was completed in January 1975. The BUV was launched as the Toyota Tamaraw in the Philippines in December 1976, and as the Toyota Kijang in June 1977. The vehicle was well-received in both countries, highlighting its focus on understanding and catering to local needs.

The energy crisis of the 1970s was a major turning point in the American auto industry. Before the crisis, large and heavy vehicles with powerful but inefficient engines were common. But in the years after, consumers started demanding high-quality and fuel-efficient small cars. Domestic automakers, in the midst of their malaise era, struggled to build these cars profitably, but foreign automakers like Toyota were well-positioned. This, along with growing anti-Japanese sentiment, prompted the U.S. Congress to consider import restrictions to protect the domestic auto industry, demonstrating the political complexities of international trade.

The 1960s also saw the slight opening of the Japanese auto market to foreign companies. In an effort to strengthen Japan's auto industry ahead of the market opening, Toyota purchased stakes in other Japanese automakers. This included a stake in Hino Motors, a manufacturer of large commercial trucks, buses, and diesel engines, along with a 16.8 percent stake in Daihatsu, a manufacturer of kei cars, the smallest highway-legal passenger vehicles sold in Japan. That began what became a long-standing partnership between Toyota and the two companies, reflecting its strategic approach towards creating alliances for growth.

1980s: Expanding to North America and Embracing Luxury

Following the successes of the 1970s, and in response to threats of import restrictions, Toyota began to make further investments in the North American market during the 1980s. In 1981, Japan agreed to voluntary export restraints, which limited the number of vehicles the nation would send to the United States each year. This led Toyota to establish assembly plants in North America to circumvent these limitations. The U.S. government also closed the loophole that had allowed Toyota to pay lower taxes by building truck beds in America, further motivating the need for local production.

Also in 1981, Eiji Toyoda stepped down as president and assumed the title of chairman. He was succeeded as president by Shoichiro Toyoda, the son of the company's founder. Within months, Shoichiro initiated a merger of Toyota's sales and production organizations, and in 1982 the combined entities became the Toyota Motor Corporation, streamlining the company’s structure. These two groups were described as "oil and water," and it took years of leadership from Shoichiro to successfully integrate them into one cohesive organization.

In Japan, Toyota offered mid-level luxury cars that were a class below the Crown and Century, and offered hardtop coupes and sedans. Models such as the Supra, Mark II, Cresta, and Chaser offered several trim packages with varying engine displacements to provide buyers with annual road tax advantages. At the same time, sports cars like the Celica, Corolla Levin, and Sprinter Trueno also sold very well, catering to a variety of consumer preferences.

Efforts to open a Toyota assembly plant in the United States began in 1980, with the company proposing a joint venture with the Ford Motor Company. However, those talks broke down in July 1981. Eventually in 1984, the company struck a deal with General Motors (GM) to establish a joint-venture vehicle manufacturing plant called NUMMI (New United Motor Manufacturing, Inc.) in Fremont, California. GM saw the joint venture as a way to gain access to a high-quality small car and an opportunity to learn about The Toyota Way and the Toyota Production System, while for Toyota, the factory gave the company its first manufacturing base in North America, allowing it to avoid any future tariffs on imported vehicles, and also provided a partnership with GM who could help them navigate the American labor environment. The plant would be led by Tatsuro Toyoda, the younger brother of company president Shoichiro Toyoda. The first Toyota assembled in America, a white Corolla, rolled off the line at NUMMI on October 7, 1986, marking an important milestone for the company.

Toyota received its first Japanese Quality Control Award at the start of the 1980s and also began participating in a wide variety of motorsports. However, the conservative Toyota held on to rear-wheel-drive designs for longer than most. While they were a clear leader in overall production, they were only third in the production of front-wheel-drive cars in 1983, behind Nissan and Honda. Partly due to this, Nissan's Sunny managed to narrowly surpass the Corolla in the number of units built that year.

Before the end of the decade, Toyota introduced Lexus, a new division that was formed to market and service luxury vehicles in international markets. Prior to the debut of Lexus, Toyota's two existing flagship models, the Crown and Century, both catered exclusively to the Japanese market and had little global appeal that could compete with international luxury brands such as Mercedes-Benz, BMW, and Jaguar. The company had been developing the brand and vehicles in secret since August 1983, at a cost of over US$1 billion. The LS 400 flagship full-size sedan debuted in 1989 to strong sales and was largely responsible for the successful launch of the Lexus marque, showcasing the company's ambitions in the luxury market.

1990s: Diversification, Innovation, and Global Expansion

In the 1990s, Toyota began to diversify its product lineup, moving beyond its traditional focus on compact cars. The company added larger and more luxurious vehicles to its portfolio, including a full-sized pickup, the T100 (and later the Tundra), several lines of SUVs, and a sport version of the Camry, known as the Camry Solara. They also launched newer iterations of their sports cars, namely the MR2, Celica, and Supra during this era, catering to different segments of the market and growing its brand recognition.

In Japan, Toyota continued to cater to the growing demand for mid-level luxury cars, offering several conventional and pillared hardtop sedans through its dealership network. Models like the Soarer, Mark II, Cresta, Chaser, Corona EXiV, and Carina ED found many buyers, demonstrating its strong position in the domestic market. At the same time, sports cars like the Supra, Celica, MR2, Corolla Levin, Sprinter Trueno, and even the subcompact Starlet GT reflected a period of prosperity and demand for performance vehicles.

December 1997 saw the introduction of the first-generation Toyota Prius, the world's first mass-produced gasoline-electric hybrid car, which represented a pivotal moment in automotive history. Initially, the vehicle was produced exclusively for the Japanese market for the first two years, highlighting the company’s focus on innovation and technology.

With a growing presence in Europe, largely due to the success of Toyota Team Europe in motorsport, the corporation decided to establish Toyota Motor Europe Marketing and Engineering, TMME, to help market vehicles in the continent, signaling a more organized approach to the European market. Two years later, Toyota set up a base in the United Kingdom, TMUK, as the company's cars had become very popular among British drivers. Bases in Indiana, Virginia, and Tianjin were also established, reflecting its expanding global footprint.

Toyota also increased its ownership stake in Daihatsu during this period. In 1995, Toyota increased its shareholding in the company to 33.4 percent, giving Toyota the ability to veto shareholder resolutions at the annual meeting, showcasing a growing level of control. By 1998, Toyota had increased its holding in the company to 51.2 percent, becoming the majority shareholder, further consolidating their influence over the company.

On September 29, 1999, the company decided to list itself on the New York and London Stock Exchanges, a move that was meant to further expand its reach and investor base.

The later half of the 1990s also saw the Toyoda brothers step back from the company their father had founded, marking a new era for the leadership of the company. In 1992, Shoichiro Toyoda shifted to become chairman, allowing his brother Tatsuro to become president, a role he held until his retirement in 1995. Shoichiro would step down as chairman in 1999, with both retaining honorary advisory roles in the company, symbolizing a transition of leadership within the founding family. Hiroshi Okuda would lead the company as president from 1995 until 1999, when he became chairman, and the President's office would be filled by Fujio Cho, further showcasing the transitions in the company’s management structure.

2000s: Global Leadership, Challenges, and a New Generation

In August 2000, exports of the Prius began, marking the global introduction of the company’s innovative hybrid technology. In 2001, Toyota solidified its relationship with its long-time partner, acquiring truck and bus manufacturer Hino Motors. In 2002, Toyota entered Formula One competition, signaling a push into motorsports, and also established a manufacturing joint venture in France with French automakers Citroën and Peugeot, demonstrating its increasing global partnerships. A youth-oriented marque for North America, Scion, was introduced in 2003, reflecting its attempts to appeal to younger consumers. Toyota ranked eighth on the Forbes 2000 list of the world's leading companies for the year 2005, showcasing its strong global presence. Also in 2005, Fujio Cho shifted to become chairman of Toyota and was replaced as president by Katsuaki Watanabe, marking a change in leadership.

In 2007, Toyota released an update of its full-sized truck, the Tundra, produced in two American factories, one in Texas and one in Indiana, demonstrating its commitment to the North American market. Motor Trend named the 2007 Toyota Camry "Car of the Year" for 2007, further highlighting the quality and appeal of its vehicles. It also began the construction of two new factories, one in Woodstock, Ontario, Canada, and the other in Blue Springs, Mississippi, USA, underscoring its growing production capacity.

The company held the number one position in global automobile sales for the first quarter of 2008, demonstrating its global leadership in the automotive industry.

However, Toyota was significantly impacted by the global financial crisis of 2008, and was forced in December 2008 to forecast its first annual loss in 70 years, highlighting the vulnerability of the automotive industry to economic downturns. In January 2009, it announced the closure of all of its Japanese plants for 11 days to reduce output and stocks of unsold vehicles, reflecting the drastic measures the company had to take to adjust to the situation.

In October 2009, Toyota announced that they were establishing an office in South Korea and launched the Camry sedan, Camry hybrid, Prius, and the RAV4 during the launching event at the Grand Hyatt Seoul, demonstrating a continuing effort to expand its operations around the globe.

2010s: Navigating Disasters, Shifting Markets, and Investing in the Future

In 2011, Toyota, along with large parts of the Japanese automotive industry, was significantly impacted by a series of natural disasters. The 2011 Tōhoku earthquake and tsunami led to a severe disruption of the supplier base and a drop in production and exports, creating a challenging situation for the company. Severe flooding during the 2011 monsoon season in Thailand also affected Japanese automakers who had chosen Thailand as a production base. Toyota is estimated to have lost production of 150,000 units due to the tsunami and production of 240,000 units due to the floods, highlighting the vulnerability of global supply chains to natural disasters.

On February 10, 2014, it was announced that Toyota would cease manufacturing vehicles and engines in Australia by the end of 2017. The decision was based on unfavorable exchange rates with the Australian dollar making exports unviable, the high cost of local manufacturing, and the intense competition in a relatively small local market. The company planned to consolidate its corporate functions in Melbourne by the end of 2017 and retain its Altona plant for other functions, resulting in a significant reduction of its workforce from 3,900 to 1,300. Both Ford Motor Company and General Motors (Holden) followed suit, ending Australian production in 2016 and 2017 respectively, highlighting the overall challenges in the Australian manufacturing market.

The automaker narrowly topped global sales for the first half of 2014, selling 5.1 million vehicles in the six months ending June 30, 2014, an increase of 3.8% compared to the same period the previous year. Volkswagen AG, which recorded sales of 5.07 million vehicles, was close behind, showcasing the tight competition in the global automotive market.

In August 2014, Toyota announced it would be cutting its spare-parts prices in China by up to 35%. The company admitted this move was in response to a probe foreshadowed earlier in the month by China's National Development and Reform Commission regarding Toyota's Lexus spare-parts policies. This was part of an industry-wide investigation into what the Chinese regulator considered to be exorbitantly high prices charged by automakers for spare parts and after-sales servicing, demonstrating the challenges of navigating regulatory landscapes in different countries.

In November 2015, the company announced that it would invest US$1 billion over the next five years into artificial intelligence and robotics research, reflecting its forward-thinking approach to innovation. In 2016, Toyota invested in Uber, and by 2020, a corporate governance report showed that Toyota owned 10.25 million shares of Uber, which were valued at $292.46 million as of March 30, 2020. According to Reuters, this was roughly 0.6 percent of Uber's outstanding shares, indicating its interest in ride-sharing and future mobility solutions.

In March 2016, Toyota partnered with Yanmar to create a fiberglass pleasure boat using Yanmar outboard marine diesel engines or Toyota inboard engines, demonstrating its efforts to diversify its business beyond automobiles.

In August 2016, the company purchased all remaining assets of Daihatsu, making the manufacturer of small cars a wholly owned subsidiary of Toyota, further consolidating its position in the small car market.

On August 27, 2018, Toyota announced an investment of US$500 million in Uber's autonomous cars, underscoring its commitment to the development of autonomous driving technology.

In October 2019, Toyota backed the Trump Administration's proposal that federal authority should override California's ability to set its own emissions standards for automobiles. The proposal would reduce California's 2025 fuel efficiency standard from about 54.5 to 37 MPG. This shift by Toyota away from fuel efficiency damaged the company's reputation as a green brand, sparking public debate about corporate responsibility.

2020s: Navigating a New Era of Electrification and Competition

By 2020, Toyota reclaimed its position as the largest automaker in the world, surpassing Volkswagen. It sold 9.528 million vehicles globally despite an 11.3% drop in sales due to the COVID-19 pandemic, demonstrating its resilience and strong market position. This included the sales of its subsidiaries, Daihatsu and Hino Motors.

On April 2, 2020, BYD and Toyota announced a new joint venture between the two companies called BYD Toyota EV Technology Co., Ltd., with the aim of "developing BEVs (Battery Electric Vehicles) that appeal to customers," showcasing its strategy of collaboration for its new energy vehicle production.

In March 2021, Toyota, its subsidiary Hino, and Isuzu announced the creation of a strategic partnership between the three companies. Toyota acquired a 4.6% stake in Isuzu while the latter planned to acquire Toyota shares for an equivalent value. The three companies said they would form a new joint venture by April called Commercial Japan Partnership Technologies Corporation with the aim of developing fuel cell and electric light trucks, demonstrating its commitment to sustainable transportation solutions through collaboration.

In April 2021, Toyota said that it would buy Lyft's self-driving technology unit for $550 million and merge it with its newly created Woven Planet Holdings automation division, underscoring its focus on advancing autonomous driving technology.

In June 2021, the company defended its donations to United States Republican lawmakers after they voted against certifying the results of the 2020 presidential election, saying it did not believe it was "appropriate to judge members of Congress" for that one vote. A report by Axios found that Toyota was the top donor to 2020 election objectors, by a substantial margin. The company then reversed course in July 2021 and ceased donations to election objectors, releasing a statement saying it understood that its PAC's donations to those objectors, which far outpaced those of any other company, "troubled some stakeholders", reflecting the sensitivity around corporate political donations and the company's willingness to respond to feedback. Toyota resumed donations after a six-month pause, showing the complexity of balancing business interests and public perceptions.

In December 2021, Toyota announced that it would invest ¥8,000,000,000,000 ($70 billion at the 2021 exchange rate) in electric vehicles by 2030, launch 30 EV models worldwide by that year, and set a sales target of 3.5 million electric vehicles in 2030, signaling a major shift towards electric mobility.

Toyota will increase its software engineer intake to around 40% to 50% of all technical hires from the second quarter of 2022, a move designed to address a transformation to so-called CASE — connected, autonomous, shared, and electric — technologies in an environment of intensifying global competition, further demonstrating its commitment to technology and innovation.

In 2021, Toyota told some of its suppliers to increase their semiconductor inventory levels from the conventional three months to five months in response to the COVID-19 chip shortage. The "just-in-time" supply chain, in which parts are only delivered when necessary, had already been revised after the March 11, 2011, earthquake and tsunami in Japan, lifting inventories across the entire procurement network. The time it takes Toyota to turn over its inventory increased by around 40% during the past ten years, to 36.36 days as of March 2021, highlighting the adjustments being made to its supply chain management.

In June 2022, Toyota recalled 2,700 of its first mass-produced all-electric vehicles due to worries that their wheels could fall off during driving. It was discovered that the bolts on the bZ4X's wheels could loosen to the point where the wheel simply detached from the car, causing a loss of control over the vehicle and a possible accident, showcasing the company’s difficulties with adopting new technology.

In August 2022, Toyota pledged up to $5.6 billion towards electric vehicle battery production and announced an increase in investment in its plant near Greensboro, North Carolina, further solidifying its commitment to electric vehicle production in the US. Also in 2022, Toyota managed to maintain its position as the world's best-selling automaker for the third year in a row, demonstrating its resilience in a competitive market.

In 2022, Toyota signed a £11.3 million deal with the British government to develop hydrogen-powered pickup trucks. The Department for Business, Energy and Industrial Strategy is investing £5.6 million in the research scheme, based at Burnaston, with a further £5.7 million coming through the Advanced Propulsion Centre UK (APC), reflecting its interest in multiple sustainable solutions.

In January 2023, Toyota CEO and President Akio Toyoda announced that he was stepping down and passing the position to Koji Sato. Akio is the great-grandson of company founder Rizaburo Toyoda. Sato had previously run Lexus, Toyota's luxury car brand, signaling a transition in leadership at the highest levels of the company. The change took effect on April 1, 2023.

In 2023, after negotiating with the unions, Toyota implemented the largest increase in employee wages in 20 years, reflecting its attention to its workforce.

In July 2024, Toyota announced plans to build an electric car cell plant in Fukuoka and export them to the rest of Asia, demonstrating its further investment in new battery technology.

In October 18, 2024, Toyota announced its return to Formula 1 after a 15-year absence, partnering with the US-based Haas team, showcasing its renewed interest in motorsports.

In November 2024, Toyota and Joby Aviation completed an air taxi test flight in Japan using an electric vertical take-off and landing (eVTOL) aircraft. Toyota had invested $394 million in Joby as part of a strategic alliance on commercial manufacturing, highlighting its commitment to the future of transportation.