Toyota struggles with EV transformation, considering changing plans due to Tesla

Toyota is struggling with its shift to electric vehicles, and is said to be considering major changes to its electric vehicle plans driven by Tesla’s manufacturing strategy.

However, this may slow down some of the current electric vehicle programs.

For years, we’ve been reporting Toyota lagging the competition in switching to battery electric vehicles. The automaker has been notorious for (fictitiously) investing in hydrogen fuel cells and hybrid vehicles instead.

Toyota has continued to be highly critical of the use of battery electric vehicles despite announcing its own plan last year to bring 30 battery electric models to market by 2030. The plan is only one year old, at least publicly, however, Toyota is said to be considering Carry out an overhaul of its electric vehicle plan.

Reuters reported today:

Four people familiar with plans still in development said Toyota is considering restarting its electric vehicle strategy to better compete in a booming market it has been slow to enter, and has halted some work on existing electric vehicle projects.

Toyota is said to have a working group working on evaluating significant changes to its electric vehicle platforms that will renew its plan for electric vehicles.

A decision will be made early next year, and work is said to be halted on some electric vehicle programs in the meantime.

Toyota has neither confirmed nor denied the Reuters report but commented:

“In order to achieve carbon neutrality, Toyota’s own technology – as well as the work we do with a range of partners and suppliers – is essential.”

According to the report, a review of Toyota’s plan for electric vehicles, led by Shigeki Terashiwas, was triggered in part because “Tesla won the factory cost wars over electric vehicles.”

Toyota has reportedly been surprised by the successful use of some manufacturing technologies by Tesla, including a “giant press” that enables the Texas-based automaker to produce larger casting parts. Leads to efficient manufacturing.

A Toyota source said in the report:

“What drives Mr. Terashi’s efforts is the faster-than-expected take-off of the electric vehicle and the rapid adoption of cutting-edge innovations by Tesla and others.”

Toyota is seen as a manufacturing leader in the auto industry. While Tesla’s manufacturing has been criticized in the past, in the EV transformation, it is undeniable that the company is emerging as a leader.

Tesla now has the capacity to produce millions of long-range electric vehicles, and it does so by an industry-leading gross margin.

According to the report, Toyota is taking notes and is looking to develop a new EV platform from the ground up based on those feedback.

On top of inspiring Tesla, Toyota is also inspiring to change its electric car plans due to the unsuccessful battery-powered car program in the United States.

Toyota had to stop selling the bZ4X electric car because it was experiencing some bad recalls.

Take Electric

Some good and some bad here. I often say that other automakers, even well-known ones like Toyota, should look at Tesla’s success in mass-producing electric cars.

If Toyota is finally doing it and improving its EV platform, that’s fine.

However, it appears that it will slow down some of the current electric vehicle programs Toyota is already working on. Given the fact that the company is already late to the EV party, another renewal of its plan for now could delay existing programs that were supposed to launch in the next few years.

It’s probably too early to judge how Toyota’s shift into EV will happen, but to me, the company seems to be scrambling after it finally realized it was a mistake to rule out battery electric cars for so long.

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