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The rising popularity of Toyota's hybrid vehicles has led to significant supply shortages, causing long wait times for buyers worldwide. A surge in demand has outpaced production, particularly affecting key components like magnets and inverters. Toyota is now ramping up production capacity and exploring alternative suppliers to ease the bottleneck.
More Hybrid Sales, More Problems for Toyota
Toyota, a pioneer in hybrid technology, has seen a massive increase in hybrid sales. Over the past five years, global hybrid sales—including plug-in models—have nearly tripled, reaching 16.1 million from 5.7 million, according to LMC Automotive.
However, this rapid growth has stretched Toyota’s supply chain thin. Major markets such as the U.S., Japan, China, and Europe are experiencing hybrid shortages. European customers now wait 60 to 70 days on average for new Toyota hybrids—twice as long as in 2020. In Japan, wait times range from two to five months, while in India, delivery periods vary between two to nine months depending on the model.
Why Toyota Hybrid Buyers Are Facing Long Waits
According to industry insiders, Toyota's hybrid supply chain is struggling due to shortages of critical components. These include magnets supplied to Aisin Corp, a key Toyota supplier, as well as inverters from Denso, another major component manufacturer. Production bottlenecks at second- and third-tier suppliers have caused delays in delivering hybrid motors to Toyota.
To combat these challenges, Toyota is considering diversifying its supplier base and potentially manufacturing inverters in India. However, the company has not officially commented on specific supply chain adjustments.
Capacity Expansion to Meet Demand
Toyota has taken several steps to address supply shortages:
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Increasing Production: The company has added capacity to produce an extra 32,000 vehicles annually in India and is investing further to add another 100,000 vehicles.
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Investing in Battery Production: A $14 billion battery plant in North Carolina is set to begin shipping batteries for North American hybrid vehicles in April.
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Growing Market Share in China: Despite overall declining sales in China, Toyota’s hybrid sales grew 27% in 2024, positioning hybrids as a rare bright spot in the competitive Chinese market.
Competitors Also Struggle with Hybrid Demand
Toyota isn’t the only automaker facing hybrid supply constraints. Hyundai and Kia are also experiencing delays due to limited production capacity. In Seoul, customers face a one-year wait for the Hyundai Palisade hybrid, while Kia’s Carnival hybrid has a 10-month delay.
Honda, another hybrid player, has also reported strong demand, particularly in North America and Japan, but has not disclosed specific delivery times.
Customers Still Prefer Hybrids Despite Wait Times
Despite long delays, many buyers remain committed to hybrid technology due to fuel efficiency benefits. Rakesh Kumar, a businessman in India, waited nearly five months for his Toyota Hyryder but remained patient, citing the car's superior mileage compared to traditional gasoline models.
Toyota's hybrid strategy has proven successful, but the company now faces the challenge of scaling up production to meet rising global demand. As supply chain constraints ease, buyers can expect shorter wait times in the future.
