A look inside the engineering logic driving the world’s largest carmaker as it pursues multiple routes to decarbonisation, and quietly turns India into its most valuable laboratories for the future of mobility.
08 Jan 2026 | 570 Views | By Ketan Thakkar
Even as global rivals chase the EV journey, Toyota Motor Corporation is on a different path: One where carbon is the only enemy, software becomes the new engine, and India plays an important role as a test bed for many of the proposed strategies.
“The enemy is carbon, not ...
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Even as global rivals chase the EV journey, Toyota Motor Corporation is on a different path: One where carbon is the only enemy, software becomes the new engine, and India plays an important role as a test bed for many of the proposed strategies.
“The enemy is carbon, not the engine, not the battery, not the technology.” This line repeated, emphasised, and returned throughout the lecture that Autocar Professional attended on the sidelines of Japan Mobility Show 2025. In an unusually candid and technically rich session, five of Toyota’s most influential engineering leaders detailed how they see the next decade likely to unfold for Toyota from a technological standpoint. These are the people shaping Toyota’s future technologies from the inside:
Their individual perspectives span powertrains, carbon-neutral fuels, hydrogen ecosystems, lifecycle CO₂, and next-generation software. There was consistency across all five leaders: Toyota does not believe in a single global solution to decarbonisation. Instead, it considers identifying solutions appropriate to each region, based on energy availability, infrastructure maturity, customer preference, and environmental impact.
Toyota is preparing for a world in which energy realities differ sharply from one country to another, and nowhere is this regional relevance more evident than in India, a base that appears indirectly throughout Toyota’s internal discussions. The country emerges as a proving ground for multiple technologies simultaneously, reflecting precisely the multi-pathway approach Toyota is championing.
In the narrative shared by Toyota’s leadership, India stands out as a region whose diversity of users, fuels, and operating conditions aligns naturally with Toyota’s belief that no single technology can meet the needs of all people or all markets.
The Enemy Is Carbon
Hiroki Nakajima opened the session with a clarity that instantly set the tone for everything that followed: “Our enemy is carbon. It is not the internal combustion engine. It is not a battery electric vehicle. It is carbon.”
Instead of defending a powertrain, Nakajima made it clear that Toyota is defending an outcome: real-world carbon reduction. “We are exploring many paths, compact high-efficiency engines, next-generation batteries, hydrogen, and synthetic fuels. What matters is carbon reduction across real-world conditions,” he explained.
Throughout the lecture, Toyota’s leadership repeatedly highlighted that carbon reduction must be measured not in idealised laboratory scenarios but in the context where people actually live, drive, and consume energy. Nakajima then turned to the vehicles shown at the Japan Mobility Show, making it clear that Toyota is not in the business of concept theatrics:
“These are not show cars. Every project you saw has a technical underpinning. They are part of our back pocket, ready to develop when the world needs them.” Nakajima’s explanation also served as a nuanced response to the increasingly dominant global narrative that positions EVs as the inevitable universal answer. Without dismissing EVs, which Toyota is developing with renewed acceleration, he cautioned against technological absolutism:
“Electrification is accelerating. We believe it will continue. But not every region has the same energy, the same infrastructure, or the same customer needs.” This, he said, is why the multi-pathway approach is not a compromise but a necessity. Toyota’s position is rooted in engineering, acknowledging that the world’s mobility systems are too diverse for a single prescribed solution.
“Carbon neutrality cannot be achieved by forcing one answer everywhere. It must be achieved by applying the correct answer in the right place at the right time.”
Why Engines Still Matter for India and Asia
If Hiroki Nakajima framed the philosophy of Toyota’s multi-pathway approach, Takashi Uehara, President of the Powertrain Company, supplied the engineering rationale behind it.
Uehara opened with a warning that cuts through the global debate. “If we estimate only by fuel, we will go in the wrong direction…For carbon neutrality, CO2 reduction throughout the vehicle's lifecycle, including driving, fuel and energy production, and manufacturing, is important.”
Uehara stressed that regional energy realities determine which technology reduces CO2 fastest. “In regions where renewable energy is widely available, battery electric vehicles produce lower CO2 emissions.” But in many emerging markets, he explained, the equation reverses. “In regions that depend much on fossil fuels, hybrid or plug-in hybrids produce lower emissions.”
He also pointed to the long-term outlook. “In the future, electricity and hydrogen might become key energy sources. Both battery electric and fuel cell vehicles are likely to be widely used.”
For India, Uehara’s logic is highly relevant. The grid remains carbon-intensive, EV affordability is limited, usage patterns are demanding, and hybrid systems offer immediate CO2 benefits.
Hydrogen as the Gamechanger for Freight
Mitsumasa Yamagata, President of Toyota’s Hydrogen Factory, delivered the strongest case for hydrogen’s long-term role in mobility, especially in heavy-duty transport where battery electric solutions face practical limits. He framed hydrogen’s importance with two clear statements. “Hydrogen is an extremely vital resource…[and] is expected to be used in various applications, such as mobility, power generation and distribution.”
He explained that Toyota’s advantage lies in its fuel cell technology. “The fuel cell stack is like the CPU in a computer…They are the most important part of our health system.” Next-generation stacks will serve both passenger and commercial vehicles and will be produced on shared manufacturing lines.
His most compelling argument came from freight economics. “Heavy-duty trucks can consume 125 times more hydrogen than a passenger car.” This concentration of demand is what makes early hydrogen ecosystems viable.
He also pointed out the advantage of predictable logistics corridors, which allows the hydrogen supply and demand to be concentrated in specific areas. Beyond fuel cells, Toyota is also developing hydrogen combustion engines. Yamagata highlighted why these matter for manufacturing ecosystems. “Hydrogen engines reuse existing IC value chains.” This allows continuity for suppliers, easier localisation and more affordable adoption for commercial operators.
Yamagata emphasised that hydrogen requires collaboration at system level. “By creating such an ecosystem, we believe we can achieve affordable hydrogen products and create a sustainable hydrogen mobility society…We hope to use the [vendor] ecosystem in various approaches.”
India Strategy
If Toyota’s next era is built around diversity, complexity, and human-specific mobility, then India is not just another market. It is a natural fit. For decades, India was viewed as strategically important but operationally challenging. Under CEO Koji Sato, that perception is shifting.
Indian consumers value reliability, efficiency, and long-term ownership economics. India’s energy mix is hybrid receptive, ethanol ready, CNG heavy, coal linked and unevenly electrifying. Strong hybrids offer measurable efficiency gains immediately. Ethanol supports national biofuel ambitions. EVs will expand at the pace at which charging infrastructure matures. Toyota’s hybrid systems meet these expectations cleanly, delivering electric-like performance without complete dependence on charging networks.
Toyota’s long-term intent is reflected in capital commitments. A planned expansion of more than half a million units, supported by two new plants and around three to four billion dollars in investment, marks the most significant phase of growth in Toyota’s India journey. This footprint gives Toyota the flexibility to deploy strong hybrids, flex fuel hybrids, ethanol compatible engines, ICE models and future EVs across segments.
The Toyota-Suzuki partnership has given Toyota a cost and scale advantage it has never previously commanded. Localisation of engines, hybrid systems, ethanol technologies, and future EV components has made India an engineering and export hub for other emerging markets. This is especially relevant for regions that share similar affordability and infrastructure characteristics.
Similarly, India’s focus on Make in India, ethanol blending, technology neutrality, and domestic value creation mirrors Toyota’s foundational instincts around flexible, frugal, and locally anchored engineering. This reinforces Toyota’s decision to localise multiple powertrain technologies rather than converge prematurely on one.
As localisation deepens, India is emerging as a significant export hub for hybrid powertrains, ethanol-compatible engines, compact SUVs, and eventually EV derivatives.
From the Mass to the Individual
The future of mobility, as envisioned by Toyota, will not be defined by technology alone. It will be shaped by human behaviour, reflecting a shift from engineering for the average customer to engineering for millions of distinct individuals. At the Japan Mobility Show, Koji Sato expressed Toyota’s new global philosophy in two words: “To you.”
For most of the past decade, electrification was framed as the single path forward. OEMs reorganised supply chains around batteries, policymakers wrote EV targets into law, and investors rewarded companies that went all in. Toyota did not. Japan continued to emphasise multiple pathways shaped by regional energy realities.
Under Sato, Toyota has sharpened this outlook. The world will decarbonise, but not in identical ways. Regions with strong renewable grids will adopt BEVs faster. Others will rely on hybrids for years. Some will explore hydrogen. Large parts of the global South will need flexible transitions that balance affordability, infrastructure, and energy availability.
Toyota’s future is therefore not one road but a network of roads, each designed for a different type of user. This idea becomes even more relevant in a country like India, where mobility, energy systems, and consumer needs coexist in layers rather than in a single line of progression.
This evolution is not just technological, but also philosophical. Toyota’s engineers are being asked to replace the abstraction of designing for all with the intimacy of designing for one real person. The next generation Corolla has been conceived as a modular template that adapts to different lifestyles. Daihatsu’s micro mobility concepts respond to the constraints of Asian cities where streets and incomes differ dramatically from Western norms.
Experiments such as Boost Me for the differently abled, KidsMobi for children, Kayoi Bako for logistics and the IMV Origin for local assembly underline this shift.
Biofuels, Ethanol and Co₂
If hydrogen represents Toyota’s long-term horizon, biofuels and ethanol serve as its near- and mid-term bridge to carbon reduction in fast-growing markets. Keiji Kaita, President of the Carbon Neutral Engineering Development Center, explained Toyota’s thinking with rare clarity.
Kaita began by reframing the idea of carbon neutrality. “Carbon neutrality is not only about reducing emissions. It is also about using CO2 effectively.” Toyota is designing systems that treat CO2 as something that can be captured, transported, and reused. This approach aligns well with industrial sectors in countries such as India that are exploring carbon capture and utilisation.
Kaita confirmed that Toyota already has two engine types capable of operating on high ethanol blends and that most Toyota petrol engines can already handle E20, which India has mandated. Toyota is also preparing for higher blends in India and Indonesia. He summarised the performance logic simply. “Ethanol has high octane value and strong potential. But engine durability and regional cold start conditions must be considered.”
Toyota’s deeper R&D focuses on nonfood biomass. Kaita shared a key insight from the company’s pilot farm. “At Fukushima, we cultivate around 300 plants. Sorghum is very promising. Tall, efficient, grows with little water.” Sorghum and other low-water crops align naturally with regions that face water stress and have abundant crop residues.
Kaita also revealed Toyota’s push into cellulosic ethanol. “We are modifying genes and developing special yeast to convert cellulose into ethanol.” For countries with large volumes of agricultural waste, such as India, this technology could unlock scalable biofuel production without competing with food sources.
For Toyota, Ethanol provides near-term CO₂ reduction, non-food biofuels create rural economic opportunity, and CO₂ utilisation lays the foundation for long-term industrial decarbonisation.