Toyota to Develop New Engines That Run on Carbon-Neutral Fuels — Update

By Kosaku Narioka

Toyota Motor plans to develop new engines that run on carbon-neutral fuels and are fit for electrification as part of efforts by the world's largest carmaker to cut carbon emissions and save jobs at engine-part suppliers.

The Japanese automaker said Tuesday that to help decarbonize internal-combustion engines, it will make smaller engines compatible with various fuels that produce net zero carbon-dioxide emissions.

Toyota has been taking what it calls a multipathway approach, offering consumers a range of vehicles, including hybrid-electric and hydrogen-powered cars, in addition to electric ones. Models equipped with the new engines would complement that approach.

"This is a declaration of, 'Let's make internal-combustion engines together,'" Toyota Chief Executive Koji Sato said Tuesday, adding that existing engines need to change.

The announcement comes as job losses at suppliers making engine parts have become a thorny issue as automakers accelerate the transition to EVs.

The carmaker said the new engines would be made carbon neutral by shifting away from fossil fuels and offering compatibility with alternatives such as so-called e-fuels, biofuels and liquid hydrogen.

Toyota said that smaller engines would improve design possibilities and aerodynamic performance, helping them comply with increasingly strict emissions regulations while remaining efficient and powerful.

In recent months, the carmaker has benefited from a shift among consumers in the U.S. and some other markets to gasoline-electric hybrid vehicles from fully electric vehicles amid concerns about charging problems and higher prices associated with pure EVs.

The company, Japan's biggest by market capitalization, earlier this month reported record net profit and revenue in its latest fiscal year, supported by a weak yen and strong hybrid sales.

The automaker's shares have risen 33% this year, outperforming the Nikkei Stock Average's 16% gain.

--Chieko Tsuneoka in Tokyo contributed to this article.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

May 28, 2024 04:18 ET (08:18 GMT)

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