TOYOTA to Launch Next-Gen Lithium Batteries in 2027, Cutting Costs and Boosting Efficiency for Hybrids

Tokyo — TOYOTA Automobile Co. is accelerating battery technology iteration, planning large-scale deployment of next-generation lithium-ion batteries starting in 2027 to significantly reduce per-unit costs and improve energy efficiency for hybrid vehicles. This move aims to reinforce TOYOTA's global leadership in the hybrid market while mitigating profitability pressure during the transition to full electrification.

According to Takanori Anzai, TOYOTA's Chief Accounting Officer, approximately 600,000 hybrid vehicles sold in Japan alone will switch to the new lithium-ion batteries during fiscal years 2027–2028. The new batteries are expected to cut per-vehicle costs by "tens of thousands of JPY" (roughly hundreds of U.S. dollars) while improving efficiency — though specific performance parameters remain undisclosed. This shift marks TOYOTA's systematic exit from nickel-metal hydride (NiMH) battery technology and a full transition to lithium-based hybrid platforms.

Data shows TOYOTA's global hybrid vehicle deliveries in 2026 could exceed 5 million units for the first time. From April to June this year, its global retail sales totaled 2.55 million units — a 3.5% decline year-on-year — while electrified vehicle deliveries reached 1.41 million units, up 12% YoY and accounting for 55% of total sales. Hybrid vehicle sales stood at 1.24 million units (+6.7%), and battery electric vehicle (BEV) sales hit 114,000 units — more than double last year's figure.

Technologically, TOYOTA is pursuing a dual-track strategy: expanding in-house battery development while deepening external partnerships. Anzai confirmed that CATL's Indonesian plant will supply batteries for approximately 200,000 vehicles — but declined to specify the type or specifications of TOYOTA's proprietary batteries.

Looking back at TOYOTA's long-term battery roadmap unveiled in 2023, the company clearly outlined: next-generation lithium-ion batteries launching in 2026 with WLTP-rated range exceeding 800 km and 20% lower cost versus batteries used in the bZ-series BEVs; followed by bipolar lithium-ion batteries in 2027–2028 delivering over 1,000 km WLTP range and a further 10% cost reduction relative to the 2026 generation.

Notably, all stated range figures are based on the WLTP test cycle, which typically yields higher values than the U.S. EPA standard. Meanwhile, TOYOTA raised its operating profit forecast for fiscal year 2026 (ending March 31, 2027) to ¥3.40 trillion JPY (approx. $21.01 billion), driven primarily by substantial foreign exchange gains (~$44.2 billion) due to sharp depreciation of the JPY, and mitigation of Strait of Hormuz shipping disruptions via alternative logistics routes — including sailing around the Cape of Good Hope or land-based transport.