In a speech to Japanese business leaders earlier this year, Toyota Chairman Akio Toyoda had a startling prediction for those in the world of battery electric vehicles.

“No matter how much progress BEVs make, I think they will still only have a 30% market share,” Toyoda said during the January event. “Then, the remaining 70% will be HEVs, FCEVs, and hydrogen engines. And I think engine cars will definitely remain.”

“I think this is something that customers and the market will decide, not regulatory values or political power.”

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Despite not being fully invested into battery-electric vehicles, Toyota  (TM) – Get Free Report on Tuesday forecasted a record net profit of $30.3 billion for the fiscal year ending in March thanks to higher sales of hybrids in its key markets.

The Toyota City-based automaker is riding a wave of resurgence of hybrids, as sales of the gas-electric combo grew faster than sales of battery-electric cars like Tesla in markets such as the U.S. 

Skeptical and penny-pinching buyers are looking toward hybrids over EVs due to the overall high barrier to entry for BEVs, on top of concerns about range anxiety and the still-developing charging infrastructure stateside. Hybrids can be run on gasoline like a traditional internal combustion engine.

Toyota Executive Vice President Yoichi Miyazaki on Tuesday noted that the automaker recorded its largest growth in North America, with sales volume climbing 17% over the same period just a year earlier. 

According to him, the demand for hybrids in the U.S. exceeds production capacities to the point where dealers cannot keep them on their lots. 

Domestic automakers are getting the message, too. During General Motors’  (GM) – Get Free Report Q4 earnings call, CEO Mary Barra revealed a return to plug-in hybrids as part of the automaker’s future strategy.

“Let me be clear, GM remains committed to eliminating tailpipe emissions from our light-duty vehicles by 2035, but, in the interim, deploying plug-in technology in strategic segments will deliver some of the environment or environmental benefits of EVs as the nation continues to build this charging infrastructure,” Barra said. 

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In reality, sales numbers reveal that in 2023, Toyota sold about 3.4 million hybrid vehicles, an increase from 2.6 million units in 2022. 

“Hybrids are being recognized as a realistic solution to achieve carbon neutrality,” Miyazaki said. 

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