New Toyota Camry to Be Sold Only as Hybrid

When the next-generation Camry hits dealership lots in the spring, the popular midsize-car model will only be available with this technology, marking a major shift by Toyota in moving beyond the traditional gas-engine vehicle.

Toyota, which unveiled the new, redesigned Camry on Tuesday night in Malibu, Calif., said the hybrid-only model is part of a broader strategy to give buyers more choices in green vehicles. It also illustrates how the Japanese automaker is doubling down on hybrids as sales growth for fully electric vehicles slows and other car companies have begun to retrench on some of their EV plans.

In addition to the new Camry, Toyota also showed off a new hybrid SUV, called the Crown Signia, which goes on sale next year.

“Hybrids are more sought after and in shorter supply," said David Christ, Toyota’s North America head of sales.

In recent years, hybrid sales have climbed in the U.S., benefiting Toyota, which pioneered the gas-saving option with the release of the Prius in the late 1990s.

Toyota executives say the recent wave of interest has prodded the company to further invest in hybrids, which they view as critical in appealing to buyers who might want an electric car but don’t regularly have a place to plug in.

Earlier this month, the car company reported record-breaking profit, thanks in part to sales of hybrid vehicles, which it sells more of than any other automaker.

The Toyota Camry, which made its U.S. debut in 1983, has won over Americans with its family-friendly size and fuel efficiency, and has for decades been among the nation’s top-selling car models.

More recently, sales of sedans, including the Camry, have fallen off, decreasing to 2.9 million in 2022 from 7.2 million a decade prior, according to research firm Wards Intelligence. Buyers have instead flocked to roomier SUVs and crossovers, which have grown in popularity.

As the market has shifted, some carmakers have pulled back on investment in small cars, such as sedans and hatchbacks. In the past, Toyota has launched new versions of its sedans in the hopes of revitalizing consumer demand. That hasn’t happened, but Toyota and other Asian carmakers have continued to invest in new models, saying the market is still big enough to justify the expense.

“The customers have spoken that they still want passenger cars and modern technology, and as long as the customers are still there we will keep investing in them," said Toyota’s Christ.

The new Camry contains Toyota’s latest version of its hybrid system with stronger electric motors and battery to allow for faster acceleration.

Both the Camry and Crown Signia made their debuts ahead of the Los Angeles Auto Show, which is expected to be dominated by EV announcements.

The Crown is one of Toyota’s oldest nameplates for its luxury sedans. Late last year, Toyota said it was bringing the Crown sedan to the U.S. market after a decadeslong hiatus. The sedan was the first in a series of vehicles from Toyota bearing the Crown name.

Toyota executives, including Chairman Akio Toyoda, have long been skeptical about the industry’s sharp pivot to full EVs, saying that in many parts of the world where the company sells cars, there isn’t adequate infrastructure and access to clean energy to charge EVs.

Still, Japanese automakers have come under fire in recent years from investors and environmental organizations that say they haven’t done enough to commit to pure battery-powered cars. Hybrids still run on gasoline but save fuel by combining a gasoline engine with an electric motor.

Toyoda stepped down as CEO earlier this year, and tapped longtime engineer Koji Sato as his successor with a mandate of accelerating the company’s EV investments.

Toyoda more recently has said the world is finally coming around to his view that hybrid vehicles are an important transition technology as the concerns associated with EVs—including higher prices and limited range—remain prevalent.

“There are many ways to climb the mountain that is achieving carbon neutrality," Toyoda said, speaking to a small group of reporters at an auto show in Tokyo late last month. “People are finally seeing reality," he said.

After decades of working on hybrids, Toyota executives say the company is now making a profit on hybrids that is comparable to that of its purely gasoline-powered vehicles. While car companies are investing heavily in EVs, many still struggle to make money on them.

Toyota said last month it planned to more than double its investment in a battery plant under construction in North Carolina in part to meet higher demand for hybrid cars. It is pouring an additional $8 billion into the plant to turn the previously planned six battery lines into 14.

Recently, other automakers have started to review their electrification strategies. Earlier this year, Ford said it wanted to offer an array of options including hybrids and quadruple its hybrid sales in the next five years.

Speaking at the auto show in Tokyo earlier this month, Toyota’s chief scientist, Gill Pratt, said that for some time “we really were an outlier compared with other parts of the world" in terms of how Japanese automakers viewed the move to electrification.

Now, he said, “the world is catching up to us in this mindset."

Write to River Davis at river.davis@wsj.com and Sean McLain at sean.mclain@wsj.com