Why Toyota got it wrong about electric cars


In recent years, a war has been brewing between Toyota and battery electric vehicles, especially those produced by Tesla. Toyota chairman Akio Toyoda (grandson of the company founder) has openly criticized Tesla and his downstart nature compared to traditional incumbents. More recently, however, the rhetoric has taken on a more desperate and much more worrying tone for the future of the Japanese giant.

Akio Toyoda has now broadened his criticism of Tesla to include the whole plan surrounding the transition to electric vehicles as a way to cut carbon emissions. However, his argument does not concern the environment. This is the number of jobs that will be lost in the Japanese auto industry when switching to BEVs. It seems to be based on what Toyota makes in particular – fossil fuel vehicles made a bit greener with hybrid transmissions. Battery electric vehicles require less manpower to manufacture and have fewer parts, so the ecosystem of third-party vendors is smaller as well. In addition, Toyota hardly manufactures any.

It is a legitimate concern that the switch to BEV could have a major impact on employment. German automakers have the same concerns. This worries the German automobile unions and it is one of the reasons given for the setback of BMW in its electrification plan, which started so well with the i3. But BEV’s sales growth around the world, especially in Europe and China, has convinced German and French automakers that this is a moving train they must follow for existential reasons, whatever. are the short-term costs. Toyota, on the other hand, has released only one BEV so far, the Lexus UX300e, and has simply teased other BEVs such as the bZ4X, with no specific launch date.

It’s worth remembering that Toyota had a small stake in Tesla in the past – just 3% – but sold it in late 2016 (a move the CFO might now regret looking at the value of Tesla shares). It came after a senior US Toyota executive, Bob Carter, attacked Tesla for focusing only on battery-electric vehicles in 2015. The comments could be seen as a reaction to Elon Musk calling the cars out of line. hydrogen from “stupid battery-powered vehicles”. Toyota has clearly made a massive bet against BEVs and hybrids and FCEVs.

In 2015, battery-electric cars were yet to look like a novelty, with an uncertain future. The first Toyota Mirai, now in its second incarnation, had just arrived and Toyota probably felt confident in its capabilities compared to BEVs like the BMW i3, especially given the privileged status of hydrogen technology in California. . Luxury brand Toyota Lexus was already running ads that lambasted plug-ins, and that doesn’t seem to have changed much with the current plethora of Toyota “self-charging hybrid” ads. Incidentally, these must ring hollow in the UK, as people are finally realizing that their self-charging hybrids cannot charge without fossil fuel, which is currently scarce. A more precise description would be “fossil fuel-loaded hybrids,” but I doubt Toyota will accept this name change.

Only the most ardent fanboy (of whom Tesla admittedly has a lot) really wants Toyota to fail. The company’s hybrid technology has done a tremendous amount over the past 20 years to decarbonize transportation, and the world owes Toyota a debt of gratitude for it. But now Toyota seems to want to hang on to its former glory to protect Japanese jobs, to the detriment of environmental needs.

Over the next 5-10 years, there will be some life left in the hybrid market. BEV is still much more expensive than its fossil equivalent. But that is changing, and in the UK BEVs are now selling more than pure diesels. Plugins also overtook diesels in Europe in August. The decline in gasoline / gasoline cars is slower, but it is clear. In the 26 countries that make up the European car market today, 65% of car sales were gasoline in 2019, 58% in 2020, and now only 56% so far in 2021. It could well drop below d ‘by the end of the year. .

It’s great to state that hybrids still have a role to play in decarbonization, as Akio Toyoda does. Yes, they emit less carbon than a pure fossil fuel vehicle. But plug-ins, especially BEVs, cannot emit any CO2 during operation. Hybrids could close the gap for many who aren’t quite ready to switch to BEVs yet due to charging infrastructure issues and the current high price of BEVs. But putting all your eggs in that basket and hoping that dismal sales of fuel cell electric vehicles will pick up soon to take over, doesn’t sound like a solid business plan. Just as incumbent mobile phone makers Nokia, Ericsson and Motorola missed the smartphone revolution Apple and Samsung led until sunset, Toyota may well shoot itself in the foot with its reluctance to put more of (electrical) energy in pure BEVs.


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