The World’s Biggest Carmaker Made a Huge Bet on Tech. Things Went Wrong Fast.

TOKYO—Toyota sells more cars each year than any other company, and it had similarly big dreams when it created its own in-house technology startup in 2021. It picked an American tech whiz to run it and envisioned building software for its cars that would become a standard for the whole industry.

So great were the startup’s ambitions that one of its projects was building an entire new city in the foothills of Mount Fuji where it could test self-driving cars, robots and hydrogen for power production.

Then-Chief Executive Akio Toyoda said the new unit would help Toyota navigate a “once-in-a-century period of profound change” in which cars become electric, internet-connected, autonomous and heavily reliant on software.

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