Why Toyota Stock Was Sinking Today

Source The Motley Fool

Two developments with Toyota Motor (NYSE: TM) weren't greeted with enthusiasm by the stock market Thursday. Investors exited the stock, to the point where it was trading down by almost 3% in late-session trading. That was a steeper fall than the 0.4% dip of the S&P 500 index at that point.

American EV a long way off

The first piece of news was about Toyota's electric vehicle (EV) efforts. An article in Reuters, citing a report in Japan's Nikkei business daily, said the giant automaker is delaying the start of EV production in the crucial North American market longer than planned. This delay is substantial; the company aims to push the launch well forward to the first half of 2026.

Toyota previously said the delay would be only a matter of months. It is slated to begin the production of an electric SUV at its factory in Kentucky.

According to Nikkei's reporting, the postponement is due to adjustments in design, and concern about declines in the growth rates of EV sales. Toyota has been famously reluctant to jump wholeheartedly into the EV segment. That being said, EVs are still popular among certain types of consumers, and no one likes when a planned product line is delayed.

Up in the air

The second news item is Toyota's announcement that it will expand its investment in electric air taxi developer Joby Aviation. It will inject a fresh $500 million into Joby in two equal tranches in order to, as it wrote in a press release, "support the certification and commercial production of Joby's electric air taxi, with the aim of realizing the two companies' shared vision of air mobility.

Although Toyota has rather deep pockets, some might feel that its capital is better spent on current road vehicle efforts rather than commercial flying machines.

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