Of all the world’s automakers, the largest one by sales volume has been the most reluctant to embrace fully electric vehicles. Sure, Toyota got into the electrification game early with the Prius, and now the bulk of its U.S. cars and trucks are hybrids too. But it’s long maintained that people may never be ready to fully break up with gasoline, especially in some corners of the world where it sells cars. It’s taken a “slow and steady” approach to EVs instead.
Now, the ubiquitous Corolla is getting an electric option too—while its architecture stays flexible for gas and hybrid power as well. And that’s about to provoke an interesting thought experiment among the EV faithful: What if Toyota was right all along?
That kicks off this midweek edition of Critical Materials, our morning news roundup. Also on tap today: China indicates it may turn off subsidies to its carmakers, and Rivian isn’t ready to dive into U.S. government loans quite yet. Let’s dig in.
30%: Toyota’s ‘Multi-Pathway Approach’ Gets The Ultimate Test
Toyota Corolla Concept (2026)
Photo by: Toyota
Toyota calls it “multi-pathway”: the future of reducing carbon emissions can take on many forms, from more efficient gas engines to EVs to hydrogen and hybrids. (It also helps to be Toyota, and have its massive scale and capital, when this is your strategy.)
But no Toyota we’ve seen yet is as multi-pathway as the next Corolla, unveiled yesterday at the Japan Mobility Show. And it may be the ultimate test for this thesis: if the world’s best-selling car goes electric, hybrid and gas, which one will people buy, and where?
It’s an ambitious move, and a needed one as the world keeps getting more choices for affordable EVs. And at Automotive News, longtime Toyota correspondent Larry Vellequette argues this “slow and steady” approach to EVs may just pay off at a time when the tax-credit sales rush goes away and demand for these cars must mature on its own:
Amid challenges and criticisms, the one thing that Toyota repeatedly does right is set a course and stick to it. In the U.S., that means moving forward with electric vehicles while continuing to expand hybrids and plug-in hybrid availability across the market and throughout its lineup.
Toyota’s $14 billion battery complex in North Carolina is beginning to produce batteries for its electrified vehicles in North America. Meanwhile, it still plans to introduce new three-row EVs next year that will be built in Kentucky, as well as bring in other new EVs, including the C-HR.
Why? Because it won’t be pushing those EVs on its dealers and customers, but allowing both to pull the vehicles as real market demand for them grows naturally—just as demand has grown for hybrids. Toyota’s determination to follow the multipath powertrain strategy it adopted nearly a decade ago has allowed it to capture share from competitors, especially those who now find themselves flat-footed because they opted to not offer hybrids.
He makes some cogent points about the current mass-market realities for EVs. I’d add that, with any luck, early Toyota EVs like the bZ4X were first-draft experiments that allow later ones to be better. It is true that with tax credits going away in America, there are no more participation trophies to be awarded for simply making EVs to meet various regulations; they have to be good, and people have to want them because they’re better than gas cars and cost about the same.
There are plenty of people who will naturally demand an EV from Toyota, especially if it’s a compelling one. And the automaker is rolling out a bevy of promising new electric models, like the bZ, bZ Woodland and C-HR. This new Corolla looks great; I hope the electric version has some competitive specs.
Whatever’s next in the electric world is about moving beyond the early adopters. Maybe Toyota nailed that timing after all, but as with anything, it’s all going to come down to the strength of the product, not cheap lease deals and incentives.
60%: Rivian Won’t Tap U.S. Loan Until 2028, CFO Says
Photo by: Rivian
If you don’t believe me, just ask Rivian’s CEO, RJ Scaringe. His company is facing a downturn too, but he’s told us he is confident his future products, like the R2, can win because they’re great—not because they’re heavily incentivized.
Still, Rivian has a long road to get to long-term stability. A $6.6 billion loan from the U.S. Department of Energy approved during the Biden years will help get its Georgia EV factory going, but Rivian’s CFO told Bloomberg it doesn’t intend to use that money right away:
CFO Claire McDonough said the electric-vehicle maker anticipates starting construction on the factory next year and seeking reimbursement from a US Department of Energy loan once it’s completed. “It’d be prior to starting production in 2028 that we’d be drawing down the loan,” she told reporters Tuesday in Detroit.
The loan was finalized in January during the waning days of President Joe Biden’s administration, but President Donald Trump has been critical of that type of government financing. Energy Secretary Chris Wright in May said his agency doesn’t plan to move forward with billions of dollars worth of Biden-era loans.
Rivian’s plan to request funding via the loan in 2028 would come in the next US presidential election year.
It’s now hard to say whether that loan will hang in the balance of the next election, but it has been finalized and approved—although the current administration has a unique talent for holding up funding for such projects when it wants to. Either way, it will work on the Georgia factory on its own dime in the meantime.
90%: China May End Subsidies For EVs
Photo by: Xpeng
Here’s the thing about subsidies: you can’t expect them to last forever. (Unless you’re the American oil industry, obviously.) China’s national government has poured billions of dollars into building an advanced, software-powered EV sector. But the country’s next five-year economic plan will not include more of them, Reuters reports:
Top policymakers omitted electric vehicles from their list of strategic industries in their recent five-year development plan for 2026-2030, the industry’s first exclusion in more than a decade.
Analysts say the move is evidence that Beijing considers the industry to be mature and no longer requires the same level of financial support, leaving its development up to market forces.
But they say the omission should not be seen as a sign that the EV industry has fallen out of favour, despite it becoming a poster child for excessive competition that even President Xi Jinping has criticised. Instead, it reflects a strategic decision to allocate resources to other technologies where China seeks to enhance its capabilities, especially in light of global trade and security tensions.
“It’s an official acknowledgement that electric vehicles no longer need prioritised policies. Electric vehicle subsidies will fade,” said Dan Wang, China director at consultancy Eurasia Group.
As I said in the Toyota segment: at some point, this field has to stand on its own. In various global markets, an end to subsidies has meant a decline in EV sales. But if any market is mature enough to survive without them, it’s probably China, right? And nobody ever believed that all of its 129 (!!!) brands that currently sell electric vehicles and plug-in hybrids would all survive forever.
It’s time for some good, old-fashioned, market-driven survival of the fittest. Good luck with that, China.
100%: Was Toyota Right?
Toyota Corolla Concept (2026)
Photo by: Toyota
When you look at its current profits and hybrid sales, it certainly did something right. But will Toyota’s slower approach to EVs pay off in the end? I’d argue this is a bigger problem in Europe, which has a more advanced EV market and tougher competition, and in China, where sales have been down like almost every other legacy player, but remains too important to neglect.
What’s your take on the state of things at Toyota? Drop a note in the comments.
Contact the author: patrick.george@insideevs.com
