By Satoshi Sugiyama

TOYOTA, Japan (Reuters) -Toyota Motor Corp pushed back against critics who say it has been slow to embrace battery electric vehicles (BEV), arguing it needed to offer a variety of car choices to suit different markets and customers.

At its annual general meeting on Wednesday, the world's largest automaker by sales doubled down on its position that it would stick with technologies including fuel cell vehicles and hybrids that have for the past two decades made it a leader in cleaner cars.

Apart from concerns about its electrification strategy, Toyota executives tackled a range of questions on CEO succession plans to the ongoing chip shortage.

Once a favourite with environmentalists for its popular hybrid Prius model, Toyota has come under fire for not phasing out gasoline-powered cars and its lobbying on climate policy.

"The goal is carbon neutrality," Toyota's Chief Technology Officer Masahiko Maeda told the meeting, responding to questions submitted by Danish pension fund AkademikerPension, which also asked Toyota to refrain from lobbying to undermine the transition to BEVs.

However, "customers need to choose," Maeda said, in order to popularise electric cars that include plug-in hybrids. A variety of options should be available and the automaker should not narrow those down, he said.

"Toyota used the pretext of customer choices to avoid answering the question about lobbying activities ... to slow the transition towards fossil-fuel-free cars," AkademikerPension said in a statement after the AGM.

"As investors, we expect more in 2022 against the backdrop of the climate crisis threatening to limit much more than customer choices in a not-so-distant future."

Toyota argues that hybrids still make sense in markets where infrastructure is not ready to support a faster move to BEVs, and is exploring the viability of green fuels for internal combustion engine cars, including hydrogen.

There is a gap between Toyota, which approaches decarbonisation in a "pragmatic" way, and environmental groups that call for immediate action, said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute.

The positions are not polar opposite, he said, adding Toyota has been working to slash greenhouse gas emissions from the vehicle production stage.

The company last year committed to spend 8 trillion yen ($60 billion) by 2030 to electrify its cars, half of which is for the development of fully electric vehicles. Still, it expects annual sales of such cars to reach only 3.5 million vehicles by the end of the decade, or around a third of current sales.