- Toyota will start rolling out next-generation hybrid batteries next year.
- The automaker is on track to sell over 5 million hybrids globally this year.
- It’s also working on longer-range lithium-ion batteries for EVs, alongside solid-state packs.
Toyota is doubling down on hybrids with a new generation of high-voltage batteries set to begin rolling out next year, it said Tuesday in its earnings call.
The automaker will convert existing battery production lines in Japan with enough capacity for about 600,000 vehicles to build the new packs, which it says will deliver better performance at a lower cost.
“We are expanding battery production capacity during 2027 and 2028, and we will continue our efforts to fully capture customer demand,” Takanori Azuma, Toyota’s chief accounting officer said during a call with investors.
Photo by: Toyota
Toyota has long relied on nickel-metal hydride (NiMH) batteries for its hybrids, but it has been shifting toward lithium-ion packs in newer models, including the sixth-generation RAV4. The NiMH batteries have proven super reliable over the years, but have been surpassed by advancements in li-ion cells which make them better suited for mass market applications.
Toyota didn’t mention the chemistry of the new generation hybrid battery—it’s unclear if it will be a better version of current lithium-ion tech or something else entirely. But doubling down on hybrid battery production makes a lot of sense for the automaker. Toyota’s global sales—including Toyota and Lexus models—fell 3% to about 5 million vehicles during the January-June period, marking the first decline in two years.
Its electrified lineup, however, has been on an absolute tear. Sales of hybrids, plug-in hybrids, battery-electric vehicles and fuel-cell vehicles climbed 9.1% year over year to 2.7 million units in the first half of 2026.
Hybrids remained the overwhelming driver of that growth. Toyota sold roughly 2.3 million hybrid vehicles worldwide during the first six months of the year, accounting for about 86% of its total electrified vehicle sales. The company now expects global hybrid sales to top 5 million units for the first time by the end of 2026.
There are several reasons for that growth. High gas prices due to the war in Iran have increased the sales of electrified vehicles across the world. In the U.S., which is Toyota’s largest market, the rollback of the federal tax credits and fuel economy norms has reset EV growth and spurred the adoption of hybrids. Toyota also recently made two of its top sellers, the Camry and RAV4, hybrid-only.
Photo by: Toyota
Toyota’s worldwide battery-electric vehicle sales have grown robustly this year too, with 193,000 units in the first half marking a 135% year-over-year growth. And Toyota is pushing ahead with next-generation batteries for those EVs. The automaker has previously said its new lithium-ion batteries, due in 2027, will deliver up to 621 miles (1,000 kilometers) of range on the optimistic WLTP test cycle, which is equivalent to just over 500 miles under the stricter EPA standard.
Beyond that, Toyota is also developing solid-state batteries, which it says will be capable of charging from 10% to 80% in under 10 minutes. Those batteries are expected to arrive between 2027 and 2028, assuming it reaches a production breakthrough before that.
Toyota executives acknowledged on the earnings call that its EVs need to improve to keep up with cutting-edge models coming out of China.
“Going forward, we need to enhance the competitiveness of not only conventional vehicles but also BEVs,” Azuma said. “We intend to work closely with our local partners, including through joint development, to strengthen our competitiveness.”
Contact the author: suvrat.kothari@insideevs.com