Toyota Motor plans to significantly slow its production of electric vehicles, cutting its global output forecast for 2026 to 1 million cars, some 30% lower than the previously announced sales forecast for the same year, Nikkei has learned.

The Japanese automaker's decision to cut EV production was prompted by the slowdown in the global EV market. Toyota has notified its parts suppliers of the decision.

Under the new plan, Toyota aims to produce a little more than 400,000 EVs in 2025 and to more than double production the following year.

The Japanese automaker, which has focused on hybrid vehicles, sold about 100,000 EVs in 2023 and around 80,000 EVs from January through July this year. The new 2026 forecast still amounts to a big rise in EV sales, but production will noticeably slow, compared with the previous plan.

Last May, Toyota announced a plan to lift its global EV sales to 1.5 million vehicles by 2026. It has said that the number was intended to provide a benchmark to gear up its supply chain for batteries and other products to keep pace with the expected rapid growth of the EV market.

Toyota's decision comes as the global EV market has been cooling. According to U.K. research specialist GlobalData, global EV sales reached 9.7 million units in 2023, a 32% increase from the previous year. However, the growth rate has decelerated: In 2022 EV sales rose 65% on the year to 7.4 million cars.

U.S. based EV maker Tesla's global sales from January to June fell 7% on the year to 830,000 units. This marks the first time that Tesla's half-year sales have fallen below the previous year's figures. China's BYD sold 720,000 EVs during the same period, an 18% increase, but its sales of plug-in hybrid vehicles (PHVs) jumped 40% to 880,000 units, topping its EVs in terms of both growth rate and total units sold.

Toyota is not the only big global automaker revising its EV strategy. Germany's Volkswagen is considering closing a factory in Germany for the first time due to the high cost of its EV investments.

U.S. automaker General Motors also plans to postpone production of large EVs at its Michigan plant by two years. Fellow U.S. manufacturer Ford Motor also announced it was halting development of large electric SUVs. Sweden's Volvo Cars has scrapped its goal to make only EVs by 2030.

But among Japanese automakers, only Toyota has changed its EV strategy. Honda continues to bolster its EV production, rather than backing down from its goal to produce only EVs or fuel cell vehicles (FCVs) by 2040.