On Wednesday, Toyota Motor Corp announced its operating profit would rise 10% this business year. The automaker also expects a five-fold increase in pure electric vehicle (EVs) sales amid the easing of global supply chain issues caused by the chip shortage. The new CEO, Koji Sato, unveiled this growth plan Last month, which signals a more aggressive push towards electrification by the Japanese firm. Toyota has previously pursued a go-slow approach to all-electric cars, arguing that its strategy would provide more consumer choice.

Toyota, the world's biggest carmaker by sales, forecasts battery EV sales, including those of its Lexus brand, to reach 202,000 worldwide in the current business year through March 2024. This is a more than fivefold increase from just 38,000 units last year and expects its operating profit to rise to 3 trillion yen ($22.2 billion), which is close to analysts' forecasts.

Toyota's five-fold increase in EV sales still leaves it way behind industry leader Tesla and would boost its battery EVs to nearly 2% of total sales volume, up from just 0.4% in the last fiscal year. However, the company said they expect an increase in total sales volume in all regions and a production volume of 10 million vehicles, partly due to the easing of semiconductor supply.

Toyota's focus on electrification is part of a broader trend in the car sector, as manufacturers strive to meet increasingly tight emissions regulations and capture market share in the blossoming EV market. Toyota's plans to introduce ten new battery-powered vehicles and target annual sales of 1.5 million EVs by 2026 reflect its desire to remain competitive in the fast-changing automotive landscape.

However, Toyota does face several challenges in achieving its growth targets and maintaining its position as the world's top-selling automaker, such as the fact that the rapid shift to EVs has hurt sales in China and they need to manage problems at affiliate Daihatsu, which rigged safety tests for some Toyota-branded cars. Nonetheless, with a strong focus on innovation and a commitment to facing dressing these challenges head-on, Toyota is optimistic about the future and is poised to continue leading the automotive industry into the future.

In addition to its aggressive push towards electrification, Toyota has been working to address the ongoing global supply chain disruption caused by the chip shortage. The company's efforts to manage the chip crisis have included shifting production to models with higher profit margins and suspending production at some factories.

However, easing chip supply constraints has relieved the automotive industry, allowing Toyota to ramp up production and focus on achieving its growth targets. As a result, Sato has set a goal of achieving a 10% increase in operating profit for the current business year, which aligns with analysts' expectations.