Toyota plans to launch its next-generation hybrid batteries in 2027, aiming for 5 million hybrid vehicles sold.

      TL;DR: Toyota plans to start producing next-generation hybrid batteries in 2027, anticipating over 5 million hybrid sales globally this year. The automaker announced during its quarterly earnings call that it will modify existing battery production lines in Japan to manufacture the new batteries, which promise enhanced performance at a reduced cost.

      "We are boosting battery production capacity in 2027 and 2028 and will persist in our efforts to fully meet customer demand," stated Takanori Azuma, Toyota's chief accounting officer, to investors. The company did not disclose the chemistry of the new batteries or whether they will be an improvement over current lithium-ion cells or a different technology altogether.

      This investment aligns with Toyota’s sales performance. In the first half of 2026, the automaker sold approximately 2.3 million hybrid vehicles globally, making up about 86 percent of its total electrified vehicle sales. Overall electrified models, including hybrids, plug-in hybrids, battery-electric, and fuel-cell vehicles, increased by more than nine percent year-on-year to 2.7 million units.

      Toyota now anticipates its global hybrid sales to exceed five million units for the first time by year’s end. This growth occurs despite a roughly three percent decline in total global sales, including Toyota and Lexus models, which fell to about five million vehicles from January to June, marking the first sales drop in two years.

      The surge in hybrid demand is driven by several factors, including rising fuel prices due to the ongoing conflict in Iran, which has led consumers to seek more fuel-efficient options. In the U.S., Toyota’s largest market, the reduction of federal EV tax credits and stricter tariff conditions have slowed EV growth and increased hybrid adoption. Moreover, Toyota has made its popular models, the Camry and RAV4, hybrid-only for the 2026 model year.

      Sales of battery-electric vehicles have also seen significant growth, with 193,000 units sold in the first half of the year, reflecting a 135 percent year-on-year increase. Toyota is advancing next-generation lithium-ion batteries for these EVs, aiming for a range of over 1,000 kilometers on the WLTP cycle, which is just over 500 miles under the more stringent EPA standard, by 2027. Additionally, the company is working on solid-state batteries that can charge from 10 to 80 percent in under 10 minutes, expected to be produced between 2027 and 2028.

      On the call, Toyota executives acknowledged that their EVs must improve to compete with leading models from China. "We plan to collaborate closely with our local partners, including through joint development, to enhance our competitiveness," Azuma remarked. For the present, however, hybrids are the primary growth driver, and the next-generation batteries are intended to sustain their success.