On Wednesday, Toyota Motor (7203.T) significantly increased its full-year projection and more than quadrupled its earnings for the second quarter, citing strong global sales and the benefit of a declining yen.

The best-selling car brand in the world announced a record operational profit of 1.44 trillion yen ($9.5 billion) for the three months ending in September, up 155.6% from the same period last year.

In comparison to the same period last year, Toyota reported that it sold more automobiles in all parts of the world, including its home market, Asia, and the United States, during the six months that ended in September.

Toyota debuted a comprehensive overhaul of its EV strategy in June and pledged to increase the driving range and lower the cost of electric vehicles, following years of criticism for being sluggish to adopt battery electric vehicles.

It now seems to be reaping the rewards of both market confidence over that approach and rekindled interest in its lineup of gasoline-electric hybrids as some of the initial euphoria surrounding EVs wanes, particularly as American buyers struggle with increased financing costs.

Despite being more affordable than other fully battery-powered EVs, hybrids still make up over 90% of Toyota’s electric vehicle sales. In the quarter ending in September, sales of hybrid cars increased 41% to 888,000 units.

Analysts have noted that Toyota still faces many challenges, particularly in China, where the market’s rapid shift to battery-powered vehicles and the expansion of local EVs have had a significant negative impact on rivals like Nissan Motor (7201.T) and Honda Motor (7267.T).

At a press conference held after the results, Chief Financial Officer Yoichi Miyazaki stated that China, the largest vehicle market in the world, is experiencing “very severe price competition.”

According to him, battery EVs were central to the main pricing war. Toyota is up against competition in Southeast Asian countries like Thailand because of growing Chinese investments driven by increased demand for electric vehicles.

MASSIVE DEPOSIT

The impressive quarterly performance ought to support Toyota’s expansion goals. The business said tonight that it will increase its investment in a North Carolina factory to produce batteries for plug-in hybrids, full-battery cars, and hybrids by $8 billion.

It increased its projected profit for the entire year from 3 trillion yen to 4.5 trillion yen, mainly due to favorable foreign exchange rates. Toyota estimates the revised full-year profit will be 1.18 trillion yen due to the lower yen.

The revised estimate was contrasted with the 4.0 trillion yen average expectation by experts. Tuesday saw the yen drop to a one-year low of 151.74 per dollar, but on Wednesday, it stabilized as Japan once again threatened to intervene in the currency market.

In their calculations, Toyota used an average rate of 141 yen per dollar instead of 125 yen for the 2023–2024 fiscal year.

The corporation also announced a share repurchase of 100 billion yen. Following the results announcement, Toyota shares ended the day up 4.7%, contributing to a 2.4% increase in Japan’s benchmark Nikkei index (N225).