Toyota Electrification Strategy In Europe Today And Tomorrow

Toyota Electrification Strategy in Europe Today and Tomorrow Automotive News Europe Congress 22nd May 2019 Matt Harrison Executive Vice President Toyota Motor Europe

2050 New vehicle zero emissions Life cycle zero emissions (raw materials, parts & manufacturing, use, recycling) Plant zero emissions Minimizing and optimizing water usage Establishing a re-cycling based society Establishing a future society in harmony with nature

New Vehicle Emissions By 2050, reduce new vehicle CO₂ emissions by 90% vs 2010

Toyota DNA: Environmental Leadership

Toyota DNA: Customer First "First the customer, then the dealers, then the manufacturer. This attitude is the best approach in winning the trust of customers and dealers and ultimately brings growth to the manufacturer.” Shotaro Kamiya (1898-1980) President and Honorary Chairman Toyota Motor Sales

Consistent Hybrid Growth in Europe 480K Sales 46% Mix* 2008 CURRENT MIX (Q1 2019): 2009 2010 2011 Yaris RAV4 55% 71% * includes RU, KZ and TRK (under TME responsibility) 2012 2013 2014 Corolla H/B 81% 2015 2016 Toyota C-HR 89% 2017 2018 Lexus 71% (99% Western Europe) 60% Mix* in Western Europe

Hybrid expansion driven by model introductions 600000 Camry Corolla 500000 RAV4 400000 C-HR 300000 RAV4 Yaris 200000 100000 Prius Prius III Corolla 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

linked to clear long-term Sales & Marketing Plans TOYOTA 21 Plan Hybrid key Toyota differentiator to drive performance 2009 TOYOTA 15 Plan Customer-Centric Strategy Become undisputed Hybrid Leader 1M Sales 5% Market Share 50% Hybrid Mix 150K Hybrid Sales/year 50% Hybrid Mix In B&C Segments 2010-2012 2013-2015 2015-2019

360 Approach in close collaboration with our Network ATL/BTL Transparent Test Drives Web experience Manage Customer Concerns Showroom experience Salesmen training Steering Mechanisms Value Chain & Service

Highlight tangible benefits Transparent Test Drives TANGIBLES Fuel consumption Low emissions TCO (Total Cost of Ownership) 50% zero emissions driving* * Toyota Customer Test Drives across Europe and Independent Studies in Rome, Paris, Darmstadt, Dublin & Madrid

Hybrids also provide many intangible benefits TANGIBLES INTANGIBLES Fuel consumption Responsive Low emissions TCO (Total Cost of Ownership) Source: AMCI Research Intuitive Quiet Feelgood Driving

We wanted to share that “Feelgood Driving” «New Yaris Hybrid. Silence the City» Toyota Europe 2012 «TRY-BRID» Toyota UK Network 2016 «Try my hybrid» Toyota Norway 2015

and shift to more emotional communication ATL/BTL

Ensure a great Showroom experience Visible Hybrid Area Showroom experience Best-looking Car Dedicated Sales Process Annual Health Check Unique Value Proposition

TCM: Great value proposition for customers & network TCM: Trade Cycle Management Affordability for customers Customer centric: Pay per use Leverage high residual values High quality used cars for network

Source: Toyota Brand Scan Rolling 12-month Q4'18 Q3'18 Q2'18 Q1'18 Q4'17 Q3'17 Q2'17 Q1'17 Q4'16 Q3'16 Q2'16 Q1'16 Q4'15 Q3'15 Q2'15 Q1'15 Q4'14 Q4'18 Q3'18 Q2'18 Q1'18 Q4'17 Q3'17 Q2'17 Q1'17 Q4'16 Q3'16 Q2'16 Q1'16 Q4'15 Q3'15 Q2'15 Q1'15 Q4'14 Hybrid differentiation strengthens Brand Premium Brand Premium BRAND PREMIUM DIFFERENT

Hybrid Electric Vehicles support CO2 objectives 125 EU CO2 Evolution 120 115 110 105 100 95 2014 2015 2016 Toyota Industry 2017 2018

Future CO2 regulation to become stricter - 15% vs 2020 - 37.5% vs 2020 95g CO2 / km 81g CO2 / km 59g CO2 / km 2020 2025 2030

There is not “one” electrification solution “There is no perfect technology” Takeshi Uchiyamada Toyota Chairman

Provide different solutions for different customer needs CO2 CO2 Regulation Taxation Access restrictions Infrastructure Product is determined by customers x market Need to offer variety of powertrains across our line-up

Customers will define the electrification they need Affordable (net of incentives) Convenient (Range & Infrastructure) Access to city centers Social responsibility

Different technologies for different parts of the market

Hybrid remains optimal balance of customer needs ACCESS TO INFRASTRUCTURE CHARGE TIME VEHICLE COST CITY CENTRE ACCESS

HEV SYSTEM COST Hybrid Cost & CO2 reduction to continue -75% Toyota HEVs affordable & convenient 1st Gen Prius 2nd Gen Prius (1997, EU 2000) (2003) 3rd Gen Prius (2009) 4th Gen Prius (2015)

Sharing Hybrid technology with others

FCEVs are free from range anxiety and charging time issues VEHICLE RANGE ACCESS TO INFRASTRUCTURE CHARGE TIME VEHICLE COST CITY CENTRE ACCESS

FC system: huge potential for cost reduction FC SYSTEM COST Fuel cell system costs have been reduced significantly 2008 Prototype MODEL Further cost reduction efforts are ongoing -95% 1st Generation Mirai Generation 2 Generation 3 Limited Sales Market Entry Widespread use

Expanding FCEVs via commercial applications

BEVs will grow, especially in high income areas VEHICLE RANGE ACCESS TO INFRASTRUCTURE CHARGE TIME VEHICLE COST CITY CENTRE ACCESS

Toyota BEV Cooperation for affordability

Toyota BEV Cooperation for affordability MOVING TO MASS PRODUCTION AND SALES PRISMATIC LI SOLID STATE SCALE-UP PRODUCTION CAPACITY FURTHER REDUCE COSTS FURTHER INCREASE ENERGY DENSITY New joint venture with Panasonic

From next year BEV ROLLOUT IN EARNEST HEV ICE PHEV FCEV BEV 2010 2020 2025 2030 2050 Note: Scale is indicative

From 2025 ELECTRIFIED VERSION FOR EACH VEHICLE MODEL ICE BEV ROLLOUT IN EARNEST HEV PHEV FCEV BEV 2010 2020 2025 2030 2050 Note: Scale is indicative

In 2030 5.5M ELECTRIFIED VEHICLES SALES (INCL. 1M BEV & FCEV) HEV ICE ELECTRIFIED VERSION FOR EACH VEHICLE MODEL BEV ROLLOUT IN EARNEST PHEV FCEV BEV 2010 2020 2025 2030 2050 Note: Scale is indicative

The right car, in the right place, at the right time Environmental Leadership Customer First Technology Neutral

Toyota Electrification Strategy in Europe Today and Tomorrow. . linked to clear long-term Sales & Marketing Plans 2015-2019 Hybrid key Toyota differentiator to drive performance