Toyota: ‘nobody is selling electric vehicles at a profitable margin’ – wrong!

Toyota is probably the least interested in battery-electric vehicles out of all the major automakers and in new comments this week, the company claimed that “nobody is selling electric vehicles at a profitable margin”.

During the same conference hosted by National Automobile Dealers Association where VW gave Tesla the nod for ‘proving electric cars are here to stay’, Toyota was much more skeptical about the electric revolution.

Bob Carter, executive vice president of sales for Toyota Motor North America, said about electric vehicles (via Bloomberg):

“On electrification, we see an opportunity in North America, but it’s much further down the road. The average vehicle today costs $34,000 and for many EVs, the battery costs $34,000. The economics are not there.”

Toyota has been more invested in hydrogen fuel cell vehicles and it has only introduced battery-electric vehicles when absolutely required by regulations.

Carter says that they still plan to enter the US market, but they are more focused in Europe and China, where the governments are pushing for more electric vehicles.

Earlier this week, Toyota debuted the all-electric C-HR/IZOA for the Chinese market.

He said that he doesn’t think any automaker is selling electric vehicles at a profit:

“This is going to be a slow evolution in the U.S. market, unlike in China and Europe where there are government regulations. Nobody is selling electric vehicles at a profitable margin.”

Earlier this month, Toyota opened some of its patents to help hybrid cars as it still resists all-electric vehicles.

Electrek’s Take

I still can’t believe how dumb Toyota is being about electric vehicles.

We have known them to be entrenched in hydrogen and having difficulties letting go of those investments to focus on battery-electric, but I thought we were starting to see some good progress on that front.

However, I don’t think they will go far with leaders like Carter who is making ridiculous statements like that.

A $34,000 battery pack? Really? Let’s do some quick math here.

If we use a 60 kWh battery pack, which is fairly good for a mid-size long-range all-electric vehicle, it would mean a pack-level cost of over $550 per kWh.

I don’t believe any automaker has such an awful battery level cost.

Tesla is believed to have a battery pack-level cost below $150 per kWh, which would result in a 60 kWh battery pack at roughly $9,000.

Let’s be safe and say $10,000. That’s a fraction of what Carter is claiming.

In another related statement, he claims that “nobody is selling electric vehicles at a profitable margin.”

Of course, that’s verifiably wrong. Tesla has been profitable for the last 2 quarters while only selling electric vehicles, and has reported positive automotive gross margin consistently every quarter for years.

It might not be the case for the last quarter, but it shows that it’s definitely possible to sell electric vehicles at a profit.

Nissan and Renault also claimed to be selling electric vehicles at a profit. I don’t see any indication of them lying about that.

Toyota needs to wake up and stop peddling this misinformation about electric vehicles. It’s the future.