Toyota Opens Hybrid Patents in Response to EV Growth

Many car manufacturers appear to be bypassing hybrids in favour of electric vehicles. Toyota, a leader in hybrid technology, is countering this trend by taking the extraordinary measure of opening its nearly 24,000 hybrid systems patents royalty-free until 2030. This release excludes patents on lithium-ion technology, the preferred battery format for electric vehicles.

Has Toyota lost it? Why would a technology leader offer their research for free? The answers are business potential and critical mass. Toyota can sell vehicle-electrification parts, expertise, and support to other vehicle manufacturers. Toyota can also potentially expand into other sectors. Toyota claims that the strategy will “further promote the widespread use of electrified vehicles, and in so doing, help governments, automakers, and society at large accomplish goals related to climate change.”

Toyota has sold more than 13 million hybrid vehicles to date and has captured more than 80% of the worldwide hybrid vehicle market. Globally, hybrids account for just 3 % of the vehicle market and electric vehicles are gaining ground, now comprising about 1.5 % (Reuters, citing LMC Automotive data).

Toyota’s domination of the hybrid market has worked too well, discouraging other carmakers by charging license fees or preventing the use of proprietary technology. The downside is that many competitors are going the battery route which in turn could isolate Toyota and discourage the widespread use of hybrids.

In the end, Toyota thinks there’s more growth potential in hybrids with the patent limitations lifted. We’ll see if it’s not too late for hybrid technology to avoid the fate of other once-dominant market titans such as BlackBerry and AOL.

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