After seeing the success and demand automakers like Tesla and BYD are having with electric vehicles, Toyota is reportedly looking to grab its share. Toyota is set to make significant adjustments to its EV strategy in its upcoming meeting with suppliers next year.
Anyone following the auto industry’s transition to electric vehicles by now knows Toyota is lagging when it comes to fully electric vehicles.
Up until recently, Toyota has stuck by its hybrid strategy or, as the automaker’s CEO, Akio Toyoda, put it, “playing with all the cards in the deck.”
The company has been highly critical of embracing fully electric vehicles and, as a result, consistently ranks among the worst in decarbonization efforts. Despite this, the industry is moving forward with electric vehicle pioneers like Tesla, which is generating record sales and demand.
Perhaps, more importantly, Toyota has taken an interest in the manufacturing efficiencies that have led Tesla to post industry-high margins (27.9% in the third quarter). In fact, Tesla is now earning eight times more per car than Toyota.
Although Toyota revealed its plan to bring 30 battery electric vehicles globally by 2030, the company has reportedly been considering a strategy overhaul to better compete.
In October, a Reuters report suggested Toyota was taking note of Tesla’s success thus far and was considering building a new EV platform from scratch.
Toyota’s electric vehicle rollout has primarily revolved around its Bz strategy, or “Beyond Zero.” The automaker’s first EV model, the bZ4X, had to be recalled over safety concerns. And last month, Toyota teased a second EV prototype with a “new approach” to promote dynamic driving though no specs were mentioned.
A new report indicates Toyota is expected to outline its new EV strategy to suppliers in a meeting next year to promote lower costs and improved performance for its upcoming lineup.
Toyota to outline EV strategy to suppliers
Toyota has its first major meeting with its suppliers in February since the pandemic, and significant changes are expected to happen.
According to the report from Reuters, sources familiar with the matter said the automaker expects to outline the changes to its EV program through 2026 to its suppliers.
However, the updated strategy may come with additional delays to its EV development programs, according to one of the sources.
Top comment by Ed Gray
I'm so disappointed in Toyota. We've had several Pria in our family and always spoke highly of them. But I now think that there is a high probability that Toyota may shrink by ~50%. The fact that they have not yet secured a supply chain for EV materials, and their continued distraction with hybrid and fuel cell vehicles is going to put them so far behind that I can't see a way forward for them. If I was a gambler I would be shorting $TM.
A big part of the strategy overhaul with suppliers will likely revolve around its e-TNGA architecture, a modified gasoline car platform that’s used for EVs like the bZ4X. The sources say Toyota is considering replacing the E-TNGA with a modern, dedicated EV platform.
Toyota designed the platform to streamline production between hybrids and gas-powered vehicles, but seeing the success of automakers with dedicated EV architecture, the company is considering a new platform for the modern era.
A dedicated EV platform could help improve Toyota’s efficiency while improving its competitiveness. Toyota has been working with two of its suppliers, Denso and Aisin, for its upcoming EV strategy overhaul.
At this point, Toyota is already far behind, and waiting until February to convene with its suppliers will cost it that much longer.
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