Toyota goes all-in on hybrids as sales climb

May vehicle sales show that Australians are embracing new technology, prompting Toyota to make a huge move regarding its local line-up.

Hybrid cars are in the fast lane, more than doubling in popularity this year as electric vehicle momentum slows.

The success of hybrid cars has prompted Toyota to go all-in on the technology, dropping conventional petrol power on several model lines including the Toyota RAV4, Kluger, Corolla and Corolla Cross.

2022 Toyota RAV4 Edge Hybrid

While hybrid sales are soaring, Tesla sales have tanked in the past two months. Despite heavy discounting, sales were down 20 per cent in May and more than 40 per cent in April. The maker’s sales are now down on the first five months of last year.

The electric car market has engaged in a cutthroat price war in recent months, with several brands slashing prices by more than $10,000 to clear excess stock.

It’s not all doom and gloom for EV sales, though, as Tesla rival BYD had a record month.

Australians bought more than 40,000 electric cars in the first five months of the year, an increase of almost 27 per cent over the same period last year.

But growth has slowed and they have been overtaken by hybrids. This time last year, Australians were buying more EVs than hybrids, mainly due to Toyota supply shortages that pushed delivery times for some models beyond 12 months.

Photo of the Subaru Crosstrek, Honda HR-V and Toyota Corolla Cross. Picture: Thomas Wielecki.

But hybrids have bounced back, recording almost 66,500 sales so far this year.

Sean Hanley, vice president of sales and marketing for Toyota, said recent results reflect the true demand for hybrid cars.

“This is a landmark move by Toyota in Australia,” he said.

“It wasn’t that long ago that some commentators were writing off hybrids, if you go back last year.

Toyota executive Sean Hanley says the hybrid call is a ‘landmark move’. Photo: Michael Willson/AFL Photos

“The market truth was that surging demand for Toyota hybrids massively outstripped our ability to supply … despite all the reports of lengthy waiting times people kept ordering them and let me tell you they kept ordering them in droves.

“We knew that hybrid demand was huge. It was massively strong.”

Nearly a quarter of new-car sales last month were hybrids or EVs.

The Toyota RAV4 was third on the sales charts last month, behind the market-leading Ford Ranger and second-placed Toyota HiLux.

Despite the hybrid surge, Australians continued to but thirsty utes and 4WDs in big numbers. Aside from the Ranger and the HiLux, the Isuzu D-Max and Toyota LandCruiser finished in the top five on the sales charts.

Overall, the market remains on track for another record year, despite cost of living pressures.

2023 Toyota HiLux GR, Ford Ranger Wildtrak X, Volkswagen Amarok PanAmericana comparison test. Photo: Mark Bean

Toyota’s decision to adopt a hybrid-only line-up with no entry-level petrol models will increase prices for the Corolla Cross ($2500), Corolla Sedan ($3050), RAV4 ($2500) and Kluger ($6500). Other models, such as the Camry sedan and Yaris and Corolla hatchbacks, were already switching to hybrid-only line-ups.

Toyota models that do not have a hybrid option, such as the HiLux, LandCruiser and Supra, remain unchanged.

Hybrid sales are set to be bolstered by fresh metal at the most affordable end of the car market.

MG and Suzuki are set to introduce sub-$30,000 hybrid hatchbacks to Australian showrooms in coming weeks.

2024 Suzuki Swift Hybrid. Picture: Supplied

Michael Pachota, general manager of Suzuki Australia, said hybrid cars are “the right idea” for Australia.

“I think hybrid will grow to a minimum of 60 per cent of sales over the course of the next eight years,” he said.

“I can’t see EV going over 30 per cent, at all.

“First and foremost in Australia the infrastructure is not ready for [electric vehicles].

“I see EV as an alternative to hybrid and/or other fuel types in the future, but it won’t be a larger share of sales.”

Originally published as Toyota goes all-in on hybrids as sales climb