Toyota's huge announcement paves all-new way for automotive giant

A new era is about to begin at Toyota.

For a long time, the world's largest carmaker in sales has gone its own way.

The Camry sedan maker has completely taken the opposite bet of the entire industry by clinging to its strategy of developing hybrid vehicles like its best-selling Prius model. It has also pushed for hydrogen-fuel-cell cars.

The reasoning behind the Japanese behemoth has always been that consumers were not ready to adopt electric vehicles. As a result, Toyota favoured a policy of small steps, The Street informs.

But in doing so, Toyota has let a rival emerge which has now taken its place as the barometer of the world automobile. That rival is Tesla. Ironically, the Tesla factory in Fremont, California, the first of Elon Musk's group, was once jointly owned by Toyota and GM.

But Toyota sold it to Tesla for a ridiculous $42 million in a partnership that saw the automaker take a $50 million stake in Tesla in the midst of a financial crisis that led to the bankruptcy of GM.

In addition, Toyota and Tesla announced that they would jointly develop an electric version of Toyota's RAV4 SUV and were also considering a Lexus RX electric SUV.  But a clash of corporate cultures ended the partnership in 2014. Toyota then sold its stake in Tesla in 2017. In March 2016, Toyota had 2.3 million Tesla shares valued at the time at $538 million.

Fast forward, while Tesla and Musk have managed to convince governments around the world to promote electric vehicles through tax credits and numerous public subsidies, Toyota has found itself out of step with the forward march of the automotive sector.

And to make matters worse: all its competitors are now betting on electric vehicles whose sales continue to increase. Last year, 7.8 million electric vehicles were sold worldwide. EVs thus represented 10% of the total number of vehicles sold, up 1.7% compared to 2021, according to data from LMC Automotive.

In recent months Toyota has even seemed to give the impression that the automaker has lost its compass. Last October, the company said it would invest $70 billion in electrified vehicles, with half that figure in 100% electric vehicles. Unlike other manufacturers, the group's carbon-emissions-reduction strategy was not centred on battery electric vehicles.

At the time, CEO Akio Toyoda doubled down by saying that the vehicle manufacturer would unveil a lineup of electrified vehicles that run on liquid hydrogen and traditional rechargeable lithium-ion battery packs.