Are auto industry investors getting fed up with legacy auto OEMs riding the brakes on the EV transition? At Daimler Truck’s recent annual general meeting, a group of activist shareholders highlighted the company’s anemic 2025 financial results and raised concerns that the company’s lobbying against climate regulations might be jeopardizing its long-term competitiveness.

Recently, Toyota, the world’s largest automaker, released its earnings report for Q4 2025, and the news wasn’t good—a 21.5% decline in operating income (in yen), a decline in margins from 10% to 7.4% and a $2-billion operating loss in its North American business.

US tariffs were surely one of the culprits, but as oil prices surge and automaker profits dwindle, this might be a good moment to ask whether legacy brands need to rethink their EV (or anti-EV) strategies.

After years of slow-walking EVs and insisting that hybrids were the smarter path, Toyota is finally preparing to release a broader lineup of EVs. As John Voelcker reports, the new EVs suggest that even Toyota now sees the EV transition as something it can no longer afford to sit out.

Ben Scott, Head of Energy Demand at the Carbon Tracker Initiative, called out the company’s “years underinvesting in BEVs while the global market moved decisively in that direction.” He believes that the company’s financial results are beginning to reflect its misguided priorities.

The poor performance “exposes the hidden cost of Toyota’s fossil-fuel-dependent supply chain and combustion-heavy product mix,” Scott writes. “A company with deeper BEV penetration, more localized production, and less exposure to oil-linked input costs would be structurally shielded from the geopolitical shocks now hammering Toyota’s bottom line. Instead, Toyota enters this period of instability—after many broken promises of upping EV production—accounting for less than 2% of global BEV sales, marking a third consecutive year of declining sales in China, and with a BEV product [that is] generations behind its most competitive rivals.”

Scott enumerated some of Toyota’s troubles:

• Toyota continues to throw capital at hydrogen fuel cells, a technology that has (to put it mildly) not delivered much return on investment so far.
• In 2023, Toyota said it aspired to reach 1.5 million EV sales by 2026. Since then, the company has repeatedly reduced that target, and today it hasn’t even reached 10 percent of its projection. In 2025 Toyota sold fewer than 200,000 BEVs globally (and 1,257 fuel cell cars).
• The company has been touting progress in developing solid-state batteries for a decade, but the target date for putting SSBs in a production vehicle has been pushed back again and again. The latest “goal” is to complete a pilot SSB plant by the end of 2027. (Several other companies have already demonstrated SSBs.)
• Toyota’s China sales have fallen for 3 consecutive years, part of a rout for all the Japanese automakers in China and Southeast Asia over the past few years. Plug-in vehicles currently account for less than 3% of Toyota’s China sales.
• Toyota’s R&D-to-earnings ratio is one of the lowest among legacy auto brands.
• Toyota isn’t just falling behind the Chinese—it’s playing catchup with the Europeans. BMW is currently on its fourth-generation EV—Toyota is struggling with its second.

During a recent press conference, Charged asked Mr. Scott if he was aware of any investor-led initiatives to highlight Toyota’s electric shortcomings, of the kind that came up at Daimler’s recent meeting. “Broadly, no,” he conceded. Some individual investors have expressed concern, but as of yet there’s been no organized shareholder pressure for reform.

Perhaps that could change if we see another quarter of peaking petrol prices and plummeting profits.

Source: Carbon Tracker Initiative