Toyota reportedly rethinks EV plans

ONLY a few weeks ago, Toyota CEO Akio Toyoda said that electric car targets imposed by some governments may be “hard to achieve”.

But now comes news that a working group within Toyota has been charged with developing plans by early next year for improvements to its EV manufacturing and component supply system along with reviewing the existing EV platform or developing a new architecture.

According to Reuters, the move, reported secretly by a group of Toyota employees, suggests that even after recently halting some work on existing EV projects the Japanese giant is considering a reboot of its electric vehicle strategy to better compete in a booming market that it has been slow to enter.

The change of heart would amount to a dramatic shift for Toyota and rewrite the $US38 billion ($A59b) EV rollout plan the company announced last year to better compete with the likes of Tesla.

It flies in the face of statements made by Mr Toyoda on October 3 when he said “it’s going to take longer than expected for the industry to fully transition to the wholesale production of electric vehicles”.

He suggested ambitious targets for EV adoption were “media driven” and “are just going to take longer than the media would like us to believe”.

“Ambitious targets for electric vehicle sales – in California or nationwide – will be hard to achieve by 2030 or 2035,” said Mr Toyoda.

He added that a potential national goal of 50 per cent zero-emission vehicles by 2030 would be “very difficult”.

Mr Toyoda cautioned that regulations “tend to narrow the options available for solutions toward carbon neutrality”.

Longer term, he sees hydrogen combustion engines as a compelling offering, a technology Toyota is developing in a joint project with compatriot automotive manufacturers Subaru, Mazda, Kawasaki and Yamaha. Other companies pursuing hydrogen combustion include powertrain specialist Cummins, while Porsche is working on ‘e-fuel’ derived from hydrogen produced using renewable energy in an attempt to give internal combustion engines a stay of execution.

“In the short term, hybrids may provide the greatest good,” Mr Toyoda suggested, claiming that Toyota can produce eight plug-in hybrids with 65km of electric range for every 515km battery-electric vehicle and save up to eight times the carbon dioxide emitted into the atmosphere in the process.

“Electric vehicles are just going to take longer than the media would like us to believe,” he said, pledging to offer the “widest possible array of powertrains to propel cars cleanly”.

“That’s our strategy and we’re sticking to it.”

Up until the new information came to light, Reuters reports that Toyota had suspended work on some of the 30 EV projects announced last December, which according to the Toyota sources include the Toyota Compact Cruiser crossover and the battery-electric Crown.

While issuing no comment on the subject of an EV reboot,Toyota says its commitment to carbon neutrality is dependent on their own efforts and also effectively working with partners and suppliers. 

None of the four sources of information on Toyota's new EV plan were prepared to be identified because, they say, the plans have not yet been made public. 

Toyota would be mindful of the possibility that a reboot of their EV program would likely hinder the rollout of future EVs already in the pipeline but might buy them time to develop a more efficient manufacturing process sufficient to accommodate much greater global EV uptake than the company predicted.

Some automotive industry commentators suggest rather crudely that Toyota has been caught with its corporate pants down by grossly under-calling global EV uptake, with this reported reboot the result.

On another EV related tack, Toyota is mindful of the need to address criticism coming from activist investors and environmental groups that suggest the giant car-maker has been too slow to fully commit to EVs.

In order to cut costs, Toyota is said to be considering scrapping its EV-dedicated e-TNGA platform and developing a completely new one from scratch to underpin all future EVs. The eTNGA platform was unveiled back in 2019 and a lot has happened in the EV space since then.

Toyota’s first EV to be underpinned by e-TNGA is bZ4X medium sUV that launched overseas earlier this year but sales were stylied by a recall that precipitated a production pause while a solution was found. Production and sales resumed in late October.

Subaru’s all-electric Solterra also shares the e-TNGA platform, as will the upcoming Lexus RZ electric SUV.

It is said that Toyota’s EV review was brought to a head by concerned engineers and executives fo felt the company was ebbing well behind main EV rival Tesla in manufacturing costs and that Toyota’s planning was based on erroneous assumptions, including that EVs would not become popular for several decades.

Toyota developed the e-TNGA platform on the assumption it would have to sell some 3.5 million EVs a year by 2030, or about a third of its total vehicle production at that time.

But EV sales have grown exponentially in the past few years and the e-TNGA platform was designed to run down the same assembly line as vehicles with petrol and hybrid powertrains, so cannot easily be scaled up in production terms to cater for demand

A wave of new investment is coming from car-makers targeting EVs as global EV production and sales forecasts now suggest they will account for up to half of total worldwide vehicle production by 2030.

Giving credence to news of Toyota’s EV reboot is the appointment of former Toyota chief competitive officer, Shigeki Terashi to lead the review.

According to Reuters: ”Terashi's team has been designated a ‘BR’ or ‘business revolution’ group within Toyota, a term used for major changes including a revamp of its development and production processes two decades ago.”

The Reuters report says Mr Terashi could propose to retire e-TNGA more quickly and opt for an EV-dedicated platform engineered from the ground up.

If true, it could take roughly five years for new models based on this platform to emerge.

Toyota’s main focus in any EV reboot would be to address cost-cutting on the factory floor through streamlining operations and implementing new systems and innovations – to keep Tesla in sight.