Toyota’s Cautious Culture Annoys Some Insiders As Tesla, BYD Lead Software Revolution: Report

As the global auto industry races toward software-defined vehicles, some inside Toyota Motor are worried the company is falling behind. 

While known for reliable, well-engineered cars, Toyota has been slow to match rivals like Tesla and China’s BYD in the shift toward EVs and advanced software.

To modernize from within, Toyota launched the Digital Transformation Promotion Department in 2020, drawing staff from across departments, from engineers to factory workers, Bloomberg reported.

The goal is to introduce digital tools and a new mindset into a company that’s reportedly still reliant on whiteboards and safety-first rules, such as banning scissors in offices.

The team has implemented small improvements, including digitizing internal systems, introducing touchscreens on factory floors, and collaborating with Nvidia to enhance access to design software, according to Bloomberg. 

However, progress has been uneven. Earlier this year, Toyota merged the unit into a larger department, reportedly raising concerns that its mission is being diluted.

Toyota faces a broader cultural challenge. Former employees reportedly describe a rigid environment that prioritizes harmony over innovation, characterized by slow internal movement and limited opportunities to work on emerging technologies. Even Toyota’s separate software unit, Woven, was quietly folded back into the company last year after initial hype faded.

The pressure is mounting. Japan’s government has warned of a looming "digital cliff" as businesses cling to outdated systems. Meanwhile, global competitors are integrating services like Apple CarPlay and Google Android Auto at a rapid pace.

“Toyota sees the importance of software, but it’s still slow,” said Kani Munidasa, CEO of Tokyo-based Code Chrysalis, which runs coding boot camps for Toyota staff.

Shares of Toyota Motor were up 0.9% at 2,812 yen as of late morning trade on Monday in Tokyo. The stock has declined 6.6% so far in 2025.

On Stocktwits, retail sentiment for Toyota Motor was ‘extremely bullish’ amid ‘extremely high’ message volume.

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