At Toyota annual meeting, ambitious pivot may overshadow shareholder challenge

By Daniel Leussink

TOYOTA CITY, Japan (Reuters) – Toyota shareholders gather on Wednesday for its first annual general meeting under new CEO Koji Sato, a day after the Japanese automaker rolled out an ambitious roadmap for solid-state batteries and other electric vehicle (EVs) technologies.

The announcement could help the world’s top automaker make its case to investors at the shareholder meeting, where it also faces a resolution from three European asset managers over its climate lobbying as well as questions about governance.

The Japanese giant has become a target in recent years for activists and green investors who say it has been slow to roll out EVs. Toyota is taking a multi-pathway approach toward carbon neutrality that includes hybrids and fuel cells, along with standard EVs.

It says this is better for reducing carbon emissions and more practical as customer needs, EV infrastructure and clean energy supplies differ by country.

The roadmap detailed on Tuesday showed that under Sato, who took over from Akio Toyoda, the grandson of the founder who became chair in April, Toyota has adopted much of a revamp that engineers and planners have been developing as options for months.

It said it was developing a dedicated EV platform to reduce the cost of new models and a heavily automated assembly line that would do away with the conveyor belt system that has defined auto production since Henry Ford introduced it over 100 years ago.

It also said it would use Giga casting to cut production costs, adopting an innovation pioneered by Tesla (NASDAQ:) using massive, aluminium casting machines to reduce vehicle complexity.

Investors sent shares up 5% on the news.

Interest in the EV pivot could overshadow the challenge from the European investors, who say they want greater disclosure on its climate-related lobbying.

Toyota’s board has urged shareholders to vote against the proposal, saying there were still many obstacles to the mass-market adoption of electrified vehicles, and the automaker planned to improve the annual report it has been publishing since 2021 that details its public relations efforts on climate.

Separately, some major U.S. public pension funds have said they are voting against the re-election of Toyoda as chair, citing what they say is a lack of board independence.

Toyota has previously said its board meets governance standards set by the Tokyo Stock Exchange. It says Toyoda had been re-nominated to the board because he would push Toyota’s transformation from auto manufacturing to a company that also provides a range of mobility services.