Working Toward the Mobility Society of the Future

Message from the President The Source of Our Value Creation: What Makes Us Toyota Value Creation Story: Working toward the Mobility Society of the Future Business Foundations for Value Creation Corporate Data > Making Ever-better Cars > Initiatives to Achieve Carbon Neutrality Software and Connected Initiatives > Commercial Sector Initiatives > Woven City Global battery EV vehicle sales by 2030 Total BEVS 3.5 million Lexus BEVS 1 million (100% BEVS in N. America, Europe, and China) To achieve these goals, we have invested in various areas for a long time. In the area of vehicle development, in 1997, Toyota launched the Prius, the world's first mass-production hybrid electric vehicle. But, in fact, our development of BEVS had started well before that. In 1992, we established the Electric Vehicle Development Division, and we introduced the RAV4 EV to the market in 1996. After that, in the 2000s, we demonstrated our small prototype commuter EV e-com in various places. Furthermore, in 2012, we introduced the COMS, an ultra-compact EV, and the compact eQ EV. Thus, we have long explored the potential of BEVS. We launched the C+pod and C+walk this year and have accelerated the development of BEVS, including the e-Palette, that provide people with freedom of movement in various scenes. At the same time that we started the develop- ment of BEVS in the early 1990s, we also began the development of fuel cell electric vehicles, which run on hydrogen. In 2002, we introduced the Toyota FCHV to the market and went through various demonstrations. In 2008, the vehicle was redesigned into the Toyota FCHV-adv. Based on such long-term efforts, in 2014, the first-generation Mirai was finally launched. Since then, using these technologies to power other vehicles, such as buses and large trucks, our fuel cell electric vehicles have also contin- ued to evolve. In the area of batteries, Toyota has contin- ued to research, develop, and produce batter- ies in-house for many years. In 1996, we established what is today Prime Earth EV Energy. While refining our technologies related to nickel-metal hydride batteries, we started accelerating the devel- opment of lithium-ion batteries in 2003. Furthermore, since establishing our Battery Research Division in 2008, we have been advancing research on solid-state batteries and other next-generation batteries. Last year, we established Prime Planet Energy & Solutions to accelerate integrated efforts in the battery business. Over the past 26 years, we have invested nearly 1 trillion yen and produced more than 19 million batteries. We believe that our accumulated experience is an asset that gives us a competitive edge. Going forward, we will increase our new investment in batteries from the 1.5 trillion yen announced in September 2021 to 2 trillion yen, aiming to realize even more advanced, high-quality, and affordable batteries. When it comes to natural resources, Toyota Tsusho began conducting lithium and other surveys as early as 2006 and has been work- ing to secure stable sources. And, in the area of energy, Toyota Tsusho has been working to secure renewable energy sources, such as wind and solar power gener- ation, for more than 30 years. Furthermore, at manufacturing plants, we are aiming to achieve carbon neutrality by 2035 by continuously making steady improve- ments toward reducing energy use and by expanding the use of innovative production engineering technology. In this diversified and uncharted era, it is important to flexibly change the type and quantity of products produced while keeping an eye on market trends. We believe that the reduction in lead times and use of high-mix, low-volume production methods that we have cultivated through the Toyota Production System, along with the steady efforts of Japanese manufacturing, will enable us to be competitive going forward. We will continue to advance initiatives in all areas together with our many partners. "The Future Is to Be Created by All of Us." Energy plays a critical role in achieving carbon neutrality. At present, the energy situation. varies greatly from region to region. That is exactly why Toyota is committed to providing a diversified range of carbon-neutral options to meet whatever the needs and situations might be in every country and region. It is not us but local markets and our cus- tomers who decide which options to choose. As for why we try to keep so many options open, in terms of business management, one might think it would be more efficient to focus on fewer choices. However, we believe that being able to quickly adapt to changes in the future is more important than trying to predict the future, which is uncertain. That is why we want to keep options available for our custom- ers until the right path is clear. We at Toyota aim to be a company that contributes to the global environment, seeks to bring happiness to people, acts, and stays close to its customers. To sum it up, we want to become a company that produces happi- ness for all, for both individuals and society. We want to pass on an ever-better future for the children of today and those who will come after them. We always want the future to be brighter. I believe that the future is to be created by all of us together. Japan's automotive industry is home to our 5.5 million colleagues who have supported Japanese manufacturing and mobility. And, we have many more colleagues throughout the world. If we all take action with unity of mind and with will and passion, we will be able to leave behind many smiling faces and a beautiful Earth for the next generation. That is what I believe and that is what we will achieve. Investing Up to 730 Billion Yen in Battery Production In August 2022, Toyota announced that it will invest up to 730 billion yen in Japan and the United States toward supplying automotive batteries for BEVs, aiming to begin battery production between 2024 and 2026. Through this investment, we aim to boost production capacity by up to 40 GWh. Toyota will continue working to build a supply system that can steadily meet the growing demand for BEVS around the world. (Photo: Noriaki Mitsuhashi/N-RAK PHOTO AGENCY) TOYOTA MOTOR CORPORATION 17 INTEGRATED REPORT

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