Toyota is fighting for an EV reboot with an eye on Tesla | Catch My Job


Toyota is considering rebooting its electric car strategy to better compete in a booming market it has been slow to enter and has halted some work on existing EV projects, four people with knowledge of the still-developing plans said.

The proposals under consideration, if passed, would represent a dramatic shift for Toyota and overhaul the $38 billion EV rollout plan the Japanese automaker announced last year to better compete with the likes of Tesla.

A task force within Toyota is tasked with coming up with plans for improvements to its existing EV platform or a new architecture by early next year, the four people said. Meanwhile, Toyota has suspended work on some of the 30 EV projects announced in December, which according to sources and a document reviewed by Reuters include the Toyota Compact Cruiser crossover and the battery-powered Crown.

Toyota said it is committed to carbon neutrality, but declined to comment on specific initiatives.

“To achieve carbon neutrality, Toyota’s own technology – as well as the work we do with a range of partners and suppliers – is essential,” the company said in response to questions from Reuters.

Four sources declined to be identified because the plans have not been made public.

The overhaul under consideration could slow the rollout of EVs that are already on the drawing board. But it would also give Toyota a chance to compete with a more efficient manufacturing process, as electric vehicle sales across the industry exceed Toyota’s previous projections.

In addition, it would address criticism from green investors and environmental groups who argue that Toyota, once a darling of environmentalists, has been too slow to embrace electric vehicles.

As part of the review, Toyota is considering a successor to its e-TNGA technology called e-TNGA, which was introduced in 2019. That would allow Toyota to cut costs, the people said.

The first EV based on the e-TNGA – the bZ4X crossover – hit the market earlier this year, although its launch was marred by a recall that forced Toyota to suspend production from June. Production resumed earlier this month.


The revision was prompted in part by the realization among some Toyota engineers and executives that Toyota is losing the manufacturing cost war to Tesla on electric vehicles, the sources said.

Toyota’s planning assumed that demand for electric vehicles would not grow for several decades, the four people said.

Toyota designed the e-TNGA so that electric vehicles can be produced on the same production line as gasoline cars and hybrids. That made sense based on the assumption that Toyota would need to sell about 3.5 million electric vehicles a year — roughly one-third of its current global volume — by 2030 to stay competitive, the sources said.

But sales of electric vehicles are growing faster. Automakers globally are now predicting plans for electric vehicles to account for more than half of all vehicle production by 2030, part of a wave of industry-wide investment that now stands at $1.2 trillion.

The person leading Toyota’s electric vehicle review is Shigeki Terashi, a former competition executive, according to six people with knowledge of the business, including two people close to Toyota. Terasi did not respond to a request for comment.

Terashi’s team has been labeled the “BR” or “business revolution” group within Toyota, a term used for major changes including an overhaul of its development and manufacturing processes two decades ago.

“What’s driving Mr. Terashi’s efforts is the faster-than-expected takeoff of EVs and the rapid adoption of the latest innovations from Tesla and others,” one of the people said.

All six people declined to be named because of the confidential nature of the plans.

Terashi’s team is considering the option to extend the utility of e-TNGA by combining it with new technologies, three sources said.

Terashi could also suggest retiring the e-TNGA more quickly and opting for an EV-dedicated platform designed from the ground up. That could take about five years for the new models, two of the sources said. “There is little time to waste,” said one.

Toyota is working with suppliers and considering factory innovations to reduce costs such as Tesla’s Giga Press, a massive casting machine that has streamlined operations at Tesla’s factories.

One area under consideration is a more comprehensive approach to EV thermal management — combining, for example, passenger air conditioning and electric powertrain temperature controls — that Tesla has already mobilized, the sources said.

This could allow Toyota to reduce the size and weight of EV batteries and cut costs by thousands of dollars per vehicle, making it a “highest priority” for Toyota suppliers Denso and Aisin, one of the sources familiar with the matter said. Denso and Aisin had no immediate comment.

The acknowledgment at Toyota, the world’s largest carmaker, that Tesla has set a new benchmark for the cost of producing electric vehicles marks a major turnaround.

A decade ago, when Toyota took a stake in Tesla and the two collaborated on a battery-electric version of the RAV4, many Toyota engineers believed Tesla’s technology posed no threat, two of the sources said.

“That’s when they decided there wasn’t much to learn,” one of the sources said.

Toyota discontinued the electric RAV4 in 2014 and sold its stake in Tesla in 2017.

By 2018, when Toyota finally established a dedicated zero-emissions division and began building the e-platform, Tesla already had three models on the road.


Source link