The breakfast at Toyota’s annual dealership gathering in Las Vegas last fall was an exclusive, invite-only affair, where attendees were told to cover their cellphone cameras with red stickers.
Speaking was Stephen Ciccone, Toyota’s top lobbyist. He said the industry was facing an existential crisis — not because of the economy or fuel prices, but because of stronger tailpipe pollution limits being proposed in the United States. The rules were “bad for the country, bad for the consumer, and bad for the auto industry,” he said, according to a memo he later circulated among Toyota dealerships that was reviewed by The New York Times.
“For more than two years, Toyota and our dealer partners have stood alone in the fight against unrealistic BEV mandates,” he wrote, using the acronym for battery-electric vehicles. “We have taken a lot of hits from environmental activists, the media, and some politicians. But we have not — and we will not — back down.”
On Wednesday, the Environmental Protection Agency finalized tailpipe emissions rules that require car makers to meet tough new average emissions limits. The rules are some of the most significant aimed at fighting climate change in United States history.
But the rules relaxed major elements of an earlier, more stringent proposal. In particular, the final regulations were favorable to hybrid cars, those that run both on gasoline and electricity — giving a bigger role to a market that Toyota dominates.
Toyota, it appeared, had come out on top.
Once a leader in clean cars, Toyota has cemented its role as the voice of caution against electrifying the auto industry too quickly, using its lobbying and public relations muscle to oppose a rapid shift that experts say is critical to fighting climate change.
That’s a significant change for an auto maker that pioneered hybrid technology in the late 1990s, giving the world the Prius, a high-mileage vehicle embraced by early adopters of cleaner cars.
But in more recent years, Toyota has bet on a continued role for hybrids and gasoline cars, as well as vehicles powered by hydrogen, not batteries, seemingly leaving Toyota in a bind as sales of electric cars began rising quickly.
In a statement on Friday, Toyota said it has long maintained that “the best way to reduce carbon emissions as much as possible, as soon as possible, is to give consumers a variety of choices to meet their needs.”
Toyota sided with President Donald J. Trump in 2019 against an effort by California to impose stricter car emissions rules. And it has opposed policies around the world to compel automakers to switch to selling electric vehicles.
Toyota also stood out among its automaker peers in strongly opposing tailpipe rules proposed by the Biden administration last year, which require carmakers to meet tough new average emissions limits across their product lines. Ford, for example, sought to push back some of the compliance dates, even as it largely agreed to the overall numbers.
Toyota objected altogether. The rules were “arbitrary and capricious,” based on “error-filled data sets,” and would impose “significant costs” on gasoline vehicles, the automaker said in comments on the proposed rules. Battery supply chains, vehicle charging infrastructure, and car buyers weren’t ready for electric vehicles, the company said.
In January, Toyota chairman Akio Toyoda said he believed electric vehicles would reach a 30 percent market share at best, with the rest of the market taken up by hybrids, hydrogen fuel-cell cars and gasoline-burning vehicles.
“When we think about Toyota, people think it’s technologically great, and green — and they deserved that,” said Margo T. Oge, former director of the E.P.A.’s Office of Transportation Air Quality who has advised both automakers and environmental groups on clean-car policy. But more recently, she said, Toyota “has been using all kinds of strategies to delay.”
Toyota said that it had steadily called on the E.P.A. to provide greater flexibility to meet the regulations. And it said its argument had prevailed, noting that several companies have recently announced plans to offer more hybrids rather than electric cars. “It appears that the industry has moved toward the position Toyota has consistently held,” it said.
It also called the E.P.A.’s final rules “aggressive” and said big challenges remain in meeting them.
In spreading its message, Toyota harnessed the power of dealerships both through Mr. Ciccone’s outreach to Toyota dealers, and by other means. The company’s dealerships played a role, for example, in garnering support for a separate letter-writing campaign aimed at urging the Biden administration to exercise caution on electric vehicles, according to two people with knowledge of that effort. Toyota dealers in at least two states circulated the letter at dealership meetings, they said.
That effort culminated in a letter to President Biden, in January, from nearly 4,000 car dealerships in 50 states, complaining of poor sales of electric cars and urging the administration to “tap the brakes” on its push for more battery-powered vehicles.
The letter came in for scrutiny, however, after some dealers who appeared in it claimed that they never signed on. Among them was Duncan Roberts, majority owner of Swedish automaker Polestar’s Portland dealership “It’s embarrassing. I didn’t approve it,” he said in an interview.
Toyota said the list had been “generated by dealer-to-dealer contact,” and that it didn’t believe Toyota dealerships played any outsized role.
Electric-vehicle sales have slowed in recent months, but are still growing much faster than sales of vehicles that burn fossil fuels. Nonetheless, the dealers’ letter provided ammunition to other foes of stricter pollution standards.
The American Fuel Petrochemical Manufacturers, which represents the nation’s biggest gasoline producers, has urged congress to support a Republican-sponsored bill that would restrict the E.P.A.’s ability to regulate car emissions, citing the letter. During the Trump administration, the group also ran a covert campaign to rewrite clean-car rules.
Toyota has said it is investing more than $17 billion in electrifying its fleet, a figure that includes investments in both hybrids and electric vehicles, and has released one electric car model in the United States. But Toyota dominates in hybrids, with a roughly 40 percent share of the market in the United States, giving it an incentive to keep hybrids mainstream, analysts say. It invested heavily in the technology; early on Toyota lost money on its Priuses for a decade, before starting to turn a profit on hybrids in 2001.
And hybrids are now selling well, as some buyers shy away from buying fully battery-powered cars out of concerns about “range anxiety” — that they’ll run out of power or not be able to find convenient places to charge up.
The revised E.P.A. rules announced earlier this week “work for automakers who invest heavily in hybrids,” said Mark Schirmer, director of industry insights at Cox Automotive, a research firm. “And certainly Toyota is leading the way there.”
Toyota has also sought to make a business of supplying other automakers with its hybrid technology, offering some of its patents at no charge, with the hope that rivals turn to Toyota for its expertise and to source parts.
Toyota’s focus on producing hybrids, rather than fully battery-powered cars, is also better for the environment, the company has argued.
Mr. Ciccone, the Toyota lobbyist, laid out that reasoning in his memo to dealers: The amount of rare minerals needed to make one electric vehicle takes only one gasoline vehicle off the road. But that same amount could supply six plug-in hybrids that require an outlet, or 90 hybrid cars that don’t need to be plugged in, he said. And, he said, China’s dominance of the battery supply chain was a major concern.
“It’s a no brainer” to prioritize hybrids over electric vehicles, Mr. Ciccone said in the letter.
Some experts dispute the numbers. Rachel Muncrief, acting executive director of the International Council on Clean Transportation, a research organization, said Toyota assumed a mineral-supply crunch that hasn’t materialized because of improved battery technology and other changes.
Electric vehicles emit far fewer greenhouse gas emissions and other pollutants, studies have shown, when taking into account manufacturing and their lifetime use. “There’s no competition,” she said.
Gil Tal, director of the Electric Vehicle Research Center at the University of California, Davis’s Institute of Transportation Studies, said that while hybrids were “very efficient on lowering emissions a little bit, they’re not very effective in bringing us to zero emissions in the long run.”
Toyota’s math has won supporters. GreenerCars, which recently assessed the emissions from 1,200 cars available for purchase this year, gave its highest rating to Toyota’s Prius “plug-in” hybrid, which means it can be charged up from a power outlet but can also run on its gasoline engine. Experts point out, however, that how clean a plug-in hybrid is can vary widely depending on how often it’s driven as a gasoline car, versus powered by electricity.
Some of the changes to the E.P.A.’s car-pollution rule appeared to be based on new data suggesting that plug-in hybrids are driven more on battery power today than in the past, which would make them cleaner. Toyota had said it would share such data with the administration, and the E.P.A. on Friday said Toyota’s submissions had been reviewed and considered in making its rules.
Dr. Tal of U.C. Davis said it was clear the car companies were in a tough place. “They’re taking on the highest risk with this transition to electric vehicles,” he said. “So I understand their pushback, I understand why they’re nervous about it.”
Coral Davenport contributed reporting from Washington.