Toyota's Position on the California Global Warming Regulation

Thank you for contacting Toyota and please know that we share
your concern about climate change. That is why we've been a
leader in hybrid technology and we were the first company to
introduce a mass-market hybrid vehicle, the Prius, in 1997. In
April 2005 we will introduce the Lexus RX 400h, to be followed
shortly by the Toyota Highlander Hybrid, and next year, the Lexus GS
hybrid. We recently announced that we will build a hybrid version
of the Toyota Camry, America's best selling passenger car, in Kentucky,
starting in late 2006. Clearly, Toyota believes that hybrid technology
plays a vital role in addressing greenhouse gases.

But when it comes to California's attempt to establish new regulations
to reduce greenhouse gas emissions through changes in motor-vehicle
fuel economy, we have serious concerns. The increased fuel economy
requirements are drastic even for Toyota, which has one of the best
environmental records in the industry. For consumers, this would lead
to higher-priced vehicles and fewer model choices. The added cost to
consumers, by some estimates, may average as much as $3,000 per
vehicle. And, as for choice, the only vehicles we currently make that
would meet the ultimate rules are our Prius and our manual transmission
Echo. We recognize that a large number of our customers need different
vehicles for their lifestyles and we would like to continue to meet
those needs.

Global warming is a genuine concern for our society, and Toyota vows
to be part of the solution. The California rule has an admirable goal,
but we feel it takes the wrong approach. Any solution must take at
least a national approach, or it may threaten economic growth while
having little impact on the problem. Toyota will work in cooperation
with the National Highway Transportation Safety Board as they consider
new increases in CAFE (corporate average fuel economy) standards this
spring.

Toyota will continue to work with others, including California and
federal regulators, government representatives, academic leaders,
the industry, and environmentalists to seek innovative solutions to
the problem of global warming. And we will continue developing
and expanding pioneer technology that will lead the way to future
environmental advancements.

Please know that we value your input, and we appreciate your
feedback and the time you've taken to contact us.