Toyota Stock (TM) Powers Higher as it Launches Software Challenge to Tesla

Shares in Japanese car maker Toyota (TM) raced ahead today as it gets set to rev up its autonomous ambitions and take on rivals such as Tesla (TSLA).

On Track

Toyota is aiming by next March to develop its own operating system called Arene which it hopes to install into its next-generation RAV4 sport utility vehicle. The system will help drivers keep to the correct lane positions, assist with parking and provide infotainment.

Arene will be the bedrock of Toyota’s move to develop its autonomous driving capabilities and catch up rivals such as Tesla and those from China including Xpeng (XPEV).

The work is being carried out by Toyota’s Woven subsidiary whose chief technology officer, John Absmeier, told the Financial Times that it has to “figure out how to maintain a competitive advantage in this market going forward, and Arene will help with that.”

Trailing Huge Market

Despite known for manufacturing robust and well-maintained cars, Japanese makers such as Toyota are trailing in the crucial autonomous driving stakes. Crucial because the global autonomous vehicle market size, which was estimated at $68.09 billion in 2024, is projected to grow at an annual growth rate of 19.9% from 2025 to 2030.

The industry is being driven by the significant demand for tech adoption by customers, road safety, connectivity, advancement in AI, and sensor technology.

However, Toyota is trailing in the rear view mirror being ranked third-bottom in the Gartner’s digital automaker index last year.

Analysts were also less than blown away by the initial services offered by Arene. They wanted more developments in the area of autonomous engines, door locking and headlights.

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