The electric vehicle roadway has been bumpy lately. The battery supply chain has presented an expensive challenge to automakers. Both price and a lack of charging infrastructure have consumers holding off on making the EV switch. And in a price war led by Elon Musk's Tesla (TSLA) -), the margins of EVs, an already largely unprofitable style of vehicle, are continuing to plummet.
Amid this challenging environment, Toyota Chairman Akio Toyoda said that people are "finally seeing reality" regarding EVs.
Related: Ford is beating electric vehicle giant Tesla in one important area
Toyota's pronouncement came a day after General Motors (GM) -) and Honda (HMC) -) canceled their proposed partnership to develop more affordable electric vehicles. The goal of the partnership was to create and sell EVs for less than $30,000 by 2027.
But the EV environment isn't feeling as lucrative to automakers as it once did.
“After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market,” GM spokesman Darryll Harrison told CNBC. “Each company remains committed to affordability in the EV market.”
GM on the same day said that it was delaying the production of its coming EV lineup, which includes the Chevy Equinox EV, Chevy Silverado EV and GMC Sierra Denali EV. GM CEO Mary Barra said that the brief delay will “make the trucks more efficient and less expensive to produce, and therefore more profitable."
The company also ditched a target to make 400,000 EVs by mid-2024, but said that it is still planning to produce 1 million EVs by 2025.
“It’s clear that we’re dealing with a lot of near-term uncertainty,” Barra said. “The transition to EVs, that will have ups and downs.”
Last week, Ford (F) -) said it was slowing down the production of its F-150 Lightning truck.
Even Tesla, widely regarded as the leader in the sector, missed Street delivery expectations for the quarter before posting weaker-than-expected earnings. And CEO Elon Musk said high interest rates were to blame.
Related: Why Tesla stock is crumbling — and where it could go next
“I have continued to say what I see as reality,” Toyoda, who recently stepped down as Toyota's CEO, said. "There are many ways to climb the mountain that is achieving carbon neutrality."
One of these alternative methods involves hybrids and plug-in hybrids, something that has long made up a significant share of Toyota's EV sales.
"The reason (hybrids) are so powerful is because they fit the needs of so many customers," Toyota North America's vice president of sales Bob Carter told CNBC last year. "The demand for hybrid has been strong. We expect it to continue to grow as the entire industry transitions over to electrification later this decade."
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