Toyota's New CEO & New EV Strategy

On Thursday, Toyota Motor released an announcement that Akio Toyoda, 66, will step down as president and CEO in April 2023. The position will be replaced by Koji Sato, the Lexus president.

But why is Toyoda stepping down? Why does it have to be this year?

Below is my analysis:

Firstly, Toyota Motor decided to replace the CEO with the current head of Lexus because Toyota needs to lead the industry as the world’s No. 1 automaker, and to do that, the current head, Toyoda, is too old and outdated. Toyoda himself even highlighted in the news conference that youthfulness is needed for his current position. He mentioned, "To do that (continue leading the industry as the leader), you have to be physically, mentally and passionately fit.” Akio Toyoda is the grandson of the founder of Toyota Motor and has been the executive of the company since 2009. He will still become chairman once he steps down as CEO.

But secondly and most of all, the reason behind the sudden change in its CEO is that the company is struggling to embark on a transformation and overcome challenges in achieving eco-friendly vehicles. Toyota remains the leader in hybrid cars, but some industry analysts say their progress on adapting to greener vehicles is at a slow pace, lagging behind the US and European rivals, and this may affect the future revenues of the company. For a long-existed big company like Toyota, newcomers venturing into making electric vehicles are a threat. Hence, Toyoda, who even called himself a man of traditional car-making, probably thought that adapting to new technologies would be better controlled by a new CEO with fresh visions and ideas than by a person like him with managerial experience in producing conventional cars in a new era.

It is admirable how Toyoda accepts his drawbacks and steps down as the CEO of Toyota like this. Let's hope Toyota greatly adapts to the changing society with the new CEO :)