Toyota scrambles for EV reboot with eye on Tesla

Aisin

24/10/2022 10:45

By Norihiko Shirouzu
       Oct 24 (Reuters) - Toyota  7203.T  is considering a
reboot of its electric-car strategy to better compete in a
booming market it has been slow to enter, and has halted some
work on existing EV projects, four people with knowledge of the
still-developing plans said.
    The proposals under review, if adopted, would amount to a
dramatic shift for Toyota and rewrite the $38-billion EV rollout
plan the Japanese automaker announced last year to better
compete with the likes of Tesla  TSLA.O .
    A working group within Toyota has been charged with
outlining plans by early next year for improvements to its
existing EV platform or for a new architecture, the four
individuals said.
    In the meantime, Toyota has suspended work on some of the 30
EV projects announced in December, which according to the
sources and a document reviewed by Reuters include the Toyota
Compact Cruiser crossover and the battery-electric Crown.
        Toyota said it was committed to carbon neutrality but
declined to comment on specific initiatives.
    "In order to achieve carbon neutrality, Toyota's own
technology - as well as the work we are doing with a range of
partners and suppliers - is essential," the company said in
response to questions from Reuters.
    The four sources declined to be identified because the plans
have not been made public.
    The revamp under consideration could slow the rollout of EVs
already on the drawing board. But it would also give Toyota a
chance to compete with a more efficient manufacturing process,
as industry-wide EV sales run past Toyota's earlier projections.
    In addition, it would address criticism by green investors
and environmental groups who argue that Toyota, once a darling
of environmentalists, has been too slow to embrace EVs.
    As part of the review, Toyota is considering a successor to
its EV-underpinning technology called e-TNGA, unveiled in 2019.
That would allow Toyota to bring down costs, the people said.
    The first EV based on e-TNGA — the bZ4X crossover — hit the
market earlier this year although its launch was marred by a
recall that forced Toyota to suspend production from
June. Production resumed earlier this month.
    TESLA AS BENCHMARK
    The review was triggered in part by the realisation by some
Toyota engineers and executives that Toyota was losing the
factory cost war to Tesla on EVs, the sources said.
    Toyota's planning had assumed demand for EVs would not take
off for several decades, the four people said.
    Toyota designed e-TNGA so that EVs could be produced on the
same assembly line with gasoline cars and hybrids. That made
sense based on the assumption Toyota would need to sell about
3.5 million EVs a year – roughly one-third of its current global
volume – by 2030 to stay competitive, the sources said.
    But sales of EVs are growing faster. Automakers globally now
forecast plans for EVs to represent more than half of total
vehicle production by 2030, part of a wave of industry-wide
investment that now totals $1.2 trillion.
    The person leading Toyota's EV review is Shigeki Terashi,
former chief competitive officer, according to six people with
knowledge of the work, including two people close to Toyota.
Terashi did not respond to a request for comment.
    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.
        "What's driving Mr Terashi's effort is the EV's
faster-than-anticipated takeoff and rapid-fire adoptions of
cutting-edge innovations by Tesla and others," one of the people
said.
    All six people declined to be named because of the
confidential nature of the plans.
    Terashi's team is considering an option to prolong e-TNGA's
usefulness by coupling it with new tecnnologies, three of the
sources said.
    Terashi could also propose to retire e-TNGA more quickly and
opt for an EV-dedicated platform engineered from the ground up.
That could take roughly five years for new models, two of the
sources said. "There is little time to waste," said one.
    Toyota is working with suppliers and considering factory
innovations to bring down costs like Tesla's Giga Press, a
massive casting machine that has streamlined work in Tesla
plants.
    One area under review is a more comprehensive approach to an
EV's thermal management - combining, for example, passenger air
conditioning and electric powertrain temperature control - that
Tesla has already mobilised, the sources said.
    This could allow Toyota to reduce the size and weight of an
EV battery pack and cut costs by thousands of dollars per
vehicle, making it a "top priority" for Toyota suppliers Denso
and Aisin, one of the sources familiar with the matter said.
Denso  6902.T  and Aisin  7259.T  had no immediate comment.
    The recognition within Toyota, the world's biggest
automaker, that Tesla has set a new benchmark for EV
manufacturing costs marks a major reversal.
    A decade ago when Toyota took a stake in Tesla and the two
collaborated to produce a battery-electric version of the RAV4,
many Toyota engineers believed Tesla's technology was no threat,
two of the sources said.
    "They concluded back then there wasn't much to learn," one
of the sources said. 
    Toyota discontinued the electric RAV4 in 2014 and sold its
stake in Tesla in 2017. 
    By 2018, when Toyota finally set up a dedicated
zero-emissions division and began building an e-platform, Tesla
already had three models on the road.
 (Reporting by Norihiko Shirouzu, Paul Lienert and Maki Shiraki;
Editing by Kevin Krolicki and Edmund Klamann)
 ((kevin.krolicki@thomsonreuters.com; +813 6441 1800; Reuters
Messaging: kevin.krolicki.thomsonreuters.com@reuters.net))