When Toyota introduced the world’s first hybrid gasoline-electric car in 1997, the company made a loss on every Prius it sold. Decades later, booming sales in this category are providing a much-welcomed cash boost.
The world’s largest automaker recently reported annual operating profit of ¥5 trillion ($32 billion), the first time a Japanese company reached this threshold, with an 11.9% margin, the highest in the industry. Sales of hybrid cars rose by 32% to 3.59 million units, accounting for one in three cars sold by Toyota.
With the transition to battery-electric vehicles clearly taking much longer than expected, consumers are voting with their wallets for hybrids. That gives Toyota, Honda and other automakers with hybrid models the opportunity to raise money that can then be reinvested in the long transition to fully electric cars.
