Toyota (TM) Q2 FY26 earnings call: guidance and Q&A

How have efforts raised earning power reflected in Q2, and how does Toyota plan to minimize the impact of U.S. tariffs?

Kon-san attributed earning power to strong product demand, global market health (excluding North America due to tariffs), and expanded value chain profits (JPY 2 trillion annually). He stated that the JPY 1.45 trillion impact from U.S. tariffs is being mitigated by JPY 900 billion in improvement efforts, including increased sales volume and value chain revenues.

“JPY 1.45 trillion is the impact from the U.S. tariffs... our improvement efforts amounted to JPY 90 million -- excuse me, JPY 900 billion, JPY 900 billion.”

asked by Taguchi from Nikkan Kogyo Shimbun · answered by Kenta Kon

What is the outlook for the North American market given tariffs, and what efforts will be made to reduce breakeven volumes?

Kon-san expects healthy North American sales due to strong demand and low incentives, despite tariffs. For breakeven volume, he outlined company-wide efforts including value-add work, waste elimination, careful pricing, and increased sales, but did not provide specific quantitative goals or a timeframe for reduction.

“In terms of sales, therefore, we expect very healthy situations going forward. Now about the breakeven volumes in our earning power. I said that we will be making an all-on efforts involving different and various activities and initiatives.”

asked by Unknown Attendee from TV Tokyo · answered by Kenta Kon

What are the expectations for future hybrid growth, the status of the 2030 EV unit target, and Toyota's approach to tariff pass-through pricing?

Kon-san expects continued strong hybrid growth, aiming to accommodate demand through increased production. He noted that actual EV demand is declining compared to initial estimations, requiring product delivery at an appropriate timing. Regarding tariffs, he stated that simply raising prices is difficult due to customer loyalty, and Toyota aims to enhance product value instead.

“Regarding hybrid vehicles, it is growing very rapidly. And would that continue going forward? I guess is the gist of your question. Well, we believe that growth will continue.”

asked by Chikauka from Nikkei CrossTech · answered by Kenta Kon

What are the implications of the Japan Mobility Show exhibits for future production, and why did the tariff impact increase from JPY 1.4 trillion to JPY 1.45 trillion?

Kon-san confirmed that some Mobility Show models will be marketed, highlighting the new Century brand as a significant initiative representing 'the pride of Japan.' He explained that the tariff impact increase was due to a recalculation after the 15% tariff imposition in mid-September, affecting not only Toyota but also its suppliers.

“In the first quarter, it was JPY 1.4 trillion, but now we've added 5 million. And as you said, from mid-September, there was a 15% tariff imposed. That is a tariff level was decreased. So this is based on the recalculation of the impact of tariffs.”

asked by Unknown Attendee from Kyoto (Tokumitsu) · answered by Kenta Kon

What is Toyota's view on the U.S.-Japan tariff agreement, the market's reaction to results, and possibilities for upward/downward revisions?

Kon-san expressed gratitude for the tariff agreement, emphasizing its importance for planning and stability. He acknowledged both relief and continued difficulty in the situation. He stated that Toyota's projections are 'pretty neutral' but the company strives to provide 'the slightest upside' by year-end.

“Well, to be honest with you, what do we review the situation? Well, they are striking the agreement itself is something that we are extremely thankful to the government officials.”

asked by Toyoshima, WBS TV Tokyo · answered by Kenta Kon