Toyota Rides Hybrid Sales To $91 But Competition Is In Overdrive

| About: Toyota Motor (TM)

Toyota Motors (NYSE:TM) recently announced that unit sales of its hybrid cars surpassed 1 million units in 2012. Currently, 14% of Toyota’s total vehicles sold are hybrids; significantly more than any other major auto company. Moreover, the automaker plans to roll out 21 new hybrid models by 2015 as well as expand its hybrid offerings in territories which have no or limited options at the moment. Hybrid vehicles cost more than traditional cars but their running cost is much lower and with the gas prices continuing to remain persistently high, alternative fuel vehicles are gaining popularity both domestically and internationally. [1]

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But given the developments made by other major auto companies, is Toyota’s dominance in this alternative fuel segment under threat ?

Sales of Ford’s (NYSE:F) C-Max Hybrid, launched recently, beat out Prius’s by 400 units in October. The car has a mileage of 47 mpg, 7 more than Prius V’s, and the car has generally received positive reviews. Moreover, the trendy Fusion’s hybrid also claims a mileage of 47 mpg. These are significant threats to Prius’s dominance in the hybrid vehicles. [2]

Similarly, GM (NYSE:GM) will unveil the new Chevrolet Spark EV at the Los Angeles Auto Show later this month, and the model will hit the showrooms in early 2013. GM is naturally excited about the new, improved model which offers 55% more horsepower than its predecessor. Details about the pricing and the battery life, the two most important factors deterring customers from buying plug-ins, will be released later. [3]

GM also envisioned selling 50,000 Volts at the start of the year although the company is sure to miss out on that figure since its total sales stood at 19,000 through October. The issue of Volt’s tepid sales had become a political football to kick around for the Republicans prior to the elections since the automaker’s developmental program for electric vehicles was supported heavily by the Federal government under Obama. However, Volt’s sales have accelerated in the last couple of months with the model selling close to 3,000 units in October. Moreover, the company recently announced that it plans to sell 500,000 electric cars annually by 2017. For 2012, the total sales of GM’s electric vehicles are expected to touch 50,000. [4]

Honda (NYSE:HMC) too, in its recent mid-term review, announced that it plans to roll out a fuel cell vehicle in Japan, the U.S. and Europe by 2015. It also plans to offer more hybrids, including an electric plug-in in the U.S. next year. It looks like Toyota better come out with all guns blazing, in order to protect its territory.

We currently have a $91 price estimate for Toyota’s stock, which is about 10% higher than the current market price.


  1. Toyota’s global hybrid sales top 1m in 2012, November 18, 2012,
  2. Ford C-MAX vs. Toyota Prius: Round One Complete,
  3. GM juiced over all-electric Spark’s future, November 16, 2012,
  4. General Motors to make 500,000 electric vehicles by 2017, November 15, 2012,

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