Toyota Motor Corporation (JP:7203) has reportedly slashed its global EV (electric vehicles) output for 2026 by one-third. According to Nikkei Business, the company now projects to produce 1 million cars by 2026, down from its previous forecast of 1.5 million. The decision to cut down on EV production reflects the slowdown in EV demand in global markets. Toyota shares in Hong Kong dropped 1.28% today.
Global Carmakers Put Reverse Gear on EV Goals
The uncertainty in the global EV market has led carmakers to reverse their goals. Toyota’s decision is in line with the moves of its industry peers, who are also facing challenges with the slower adoption of EVs.
Earlier this week, Geely (HK:0175)-owned Volvo Cars announced a more flexible approach to its EV targets. Volvo has abandoned its plan to sell only EVs by 2030. It now aims for 90% to 100% of its sales to consist of fully electric or plug-in hybrid models by 2030.
Prior to that, German carmaker Mercedes-Benz (DE:MBG) had also revised its EV goals. Mercedes shifted from its earlier plan to sell only electric cars by 2030 to now deciding to pursue this goal only where market conditions allow.
Analysts Weigh in on Toyota’s Q1 Results
Last month, Toyota released its first quarter results for FY25. The company reported a 17% growth in its operating income in Q1. The company’s cost-cutting measures and a weaker yen more than offset the reduced production and sales in its domestic market. Meanwhile, Toyota’s revenues increased 12.2% year-over-year.
Following its Q1 results, Toyota has received mixed ratings on its stock. Analyst Kentaro Hosoda from Bank of America Securities praised its revenue and profit growth despite a challenging global sales environment. He further stated that Toyota’s plan to increase production in September indicates that the company is set to achieve stronger earnings in the second half of FY25. Hosoda predicts more than 50% upside in Toyota stock.
On the other hand, James Hong from Macquarie downgraded his rating on Toyota stock from Buy to Hold.
Are Toyota Shares a Good Buy?
On TipRanks, 7203 stock has received a Moderate Buy rating based on two Buy and two Hold recommendations. The Toyota share price target is ¥3,325, which implies 27% upside potential on the current levels.
