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Discussion Starter · #1 ·
Toyota Whiffed on EVs. Now It’s Trying to Slow Their Rise
7/28/2021
Tim DeChant

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EXECUTIVES AT TOYOTA had a moment of inspiration when the company first developed the Prius. That moment, apparently, has long since passed.

The Prius was the world's first mass-produced hybrid car, years ahead of any competitors. The first model, a small sedan, was classic Toyota—a reliable vehicle tailor-made for commuting. After a major redesign in 2004, sales took off. The Prius' Kammback profile was instantly recognizable, and the car's combination of fuel economy and practicality was unparalleled. People snapped them up. Even celebrities seeking to burnish their eco-friendly bona fides were smitten with the car. Leonardo DiCaprio appeared at the 2008 Oscars in one.

As the Prius' hybrid technology was refined over the years, it started appearing in other models, from the small Prius c to the three-row Highlander. Even the company's luxury brand, Lexus, hybridized several of its cars and SUVs.

For years, Toyota was a leader in eco-friendly vehicles. Its efficient cars and crossovers offset emissions from its larger trucks and SUVs, giving the company a fuel-efficiency edge over some of its competition. By May 2012, Toyota had sold 4 million vehicles in the Prius family worldwide.

The next month, Tesla introduced the Model S, which dethroned Toyota's hybrid as the leader in green transportation. The new car proved that long-range electric vehicles, while expensive, could be both practical and desirable. Battery advancements promised to slash prices, eventually bringing EVs to price parity with fossil-fuel vehicles.

But Toyota misunderstood what Tesla represented. While Toyota invested in Tesla, it saw the startup not as a threat but rather a bit player that could help Toyota meet its EV mandates. In some ways, that view was justified. For the most part, the two didn't compete in the same segments, and Toyota's worldwide volume dwarfed that of the small US manufacturer. Besides, hybrids were just a stopgap until Toyota's hydrogen fuel cells were ready. At that point, the company thought, hydrogen vehicles' long range and quick refueling would make EVs obsolete.

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Discussion Starter · #2 ·
Interesting story (at least I think it is interesting) on Toyota, the "green" company. So they woke up one day and realized they are selling beta-max in a world that is adapting VHS.

I've said it before, I think the 3rd world will need the hybrid tech due to insufficient electric grids to charge a battery economy. But, I suspect the third world volume isn't there to support profits on top of price sensitivity - meaning Toyota can't make a profit relying solely on the third world. I wonder when they will make their announcement that they are spending $50B investing in BEV?
 

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Right out of the gate this guy tries to sway the argument. "Journalists" are an endangered species, "reporting" vs. opinionating is a lost art. "Toyota whiffed" so this guy knows the whole story over the next 20+ years is set in stone already?

In a bid to protect its investments in hybrids and hydrogen fuel cells, the carmaker is lobbying against the transition to electric vehicles.

So attempting to protect your investments is now a sin? Maybe Toyota actually believes they're on the right road.

I think Toyota was correct in going down Hybrid Lane vs. Elektrik Avenue.
Time will tell,
I know that, like the woo han farce, The Powers That Be are all in for lektrik even though none of the Central Planners ran so much as a lemonaid stand in their entire lives.

Let the market decide.
 

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I think Toyota was correct in going down Hybrid Lane vs. Elektrik Avenue.
Time will tell,
I know that, like the woo han farce, The Powers That Be are all in for lektrik even though none of the Central Planners ran so much as a lemonaid stand in their entire lives.

Let the market decide.
In the U.S., the market has decided that Hybrid Lane is the route to take for at least the first half of this decade.

Mr. DeChant's penultimate statement in the Ars Technica opinion piece,
Tim DeChant said:
"Toyota seems unwilling to commit to EVs today, despite the signals the market is sending it.
is incorrect. The correct statement should be:
"Toyota seems unwilling to commit to EVs today, because of the signals the market is sending it.
 

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Right out of the gate this guy tries to sway the argument. "Journalists" are an endangered species, "reporting" vs. opinionating is a lost art. "Toyota whiffed" so this guy knows the whole story over the next 20+ years is set in stone already?

In a bid to protect its investments in hybrids and hydrogen fuel cells, the carmaker is lobbying against the transition to electric vehicles.

So attempting to protect your investments is now a sin? Maybe Toyota actually believes they're on the right road.

I think Toyota was correct in going down Hybrid Lane vs. Elektrik Avenue.
Time will tell,
I know that, like the woo han farce, The Powers That Be are all in for lektrik even though none of the Central Planners ran so much as a lemonaid stand in their entire lives.

Let the market decide.
This is a religion, and there is no religion without sins
 

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Some U.S. market sales data:
  • Sales of hybrids + FCEV from Toyota Motor Sales USA alone in 1st half of 2021: 299,811
  • Sales of BEV from all automakers combined in 1st half of 2021: 217,065
 

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Discussion Starter · #8 ·
In the U.S., the market has decided that Hybrid Lane is the route to take for at least the first half of this decade.

Mr. DeChant's penultimate statement in the Ars Technica opinion piece,


is incorrect. The correct statement should be:


Isn't 2025 when we'll start seeing more BEV's from manufacturers? In other words, what will the chart look like from 2025 to 2030 as more BEV's become available? I feel like the chart is somewhat misleading - I subscribe to Business Week, but in the past two years they lost my confidence for impartial reporting.
 

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In other words, what will the chart look like from 2025 to 2030 as more BEV's become available? I feel like the chart is somewhat misleading - I subscribe to Business Week, but in the past two years they lost my confidence for impartial reporting.
LMC Automotive's forecasts, like those from any organization or individual, tend to be most accurate for near term periods. I think that's why Bloomberg used 2016-2019 historical data combined with LMC's 2020 to 2025 forecasts in its chart.

I haven't been able to find a similar chart that depicts LMC Automotive's forecasts for the 2025 to 2030 period regarding market share for BEV and hybrid vehicles in the U.S. - assuming of course that LMC has done forecasts that far in the future. If any GM Inside News members have that info and are allowed to share, please feel free to post it in this thread.
 
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Discussion Starter · #10 · (Edited)
Right out of the gate this guy tries to sway the argument. "Journalists" are an endangered species, "reporting" vs. opinionating is a lost art. "Toyota whiffed" so this guy knows the whole story over the next 20+ years is set in stone already?

In a bid to protect its investments in hybrids and hydrogen fuel cells, the carmaker is lobbying against the transition to electric vehicles.

So attempting to protect your investments is now a sin? Maybe Toyota actually believes they're on the right road.

I think Toyota was correct in going down Hybrid Lane vs. Elektrik Avenue.
Time will tell,
I know that, like the woo han farce, The Powers That Be are all in for lektrik even though none of the Central Planners ran so much as a lemonaid stand in their entire lives.

Let the market decide.
Seems to have been a sin when Detroit was trying to protect their investments and keep EPA mpg requirements down.

Governments are enacting laws that more or less outlaw ICE regardless of what the markets want. I read the other day that the Biden administration is going to tighten EPA rules even farther than under Obama, my guess so tight that hybrids wont comply. Additionally, he's looking to let California more or less have free reign again - so you know they are going to outlaw ICE and therefore hybrids. Toyota appears to have not foreseen this and therefore the rapid ascent of BEV. They certainly do have battery vehicles coming, but I don't think they planned on BEV gaining such strong legislative support. As we've not heard of any grand $35B BEV investments from Toyota, I suspect they don't have the groundwork laid for a big BEV expansion.

I do agree that if left to market forces that Toyota does have the right approach. But, right or wrong, the governments have stepped in and many are mandating BEV leaving Toyota's plans in shambles.

Either way, I'm extrapolating off of talking to people with Tesla's and my experience with battery lawn equipment. I love my battery lawn equipment and am happily ditching the gas engines as battery tech improves. I have that favorable impression and then talking to people with Tesla's further reinforces my desire for my next car to be BEV. Can't wait!

Side comment on hydrogen - I do think it is cool tech, but I think has a lot more hurdles. I read a couple of articles on the hydrogen vehicles Toyota sold in California - turned into a real disaster with people unable to get hydrogen. They may have had hydrogen stations near them, but in many cases the hydrogen stations had no hydrogen (even pre-Covid). Going off memory is that people nor dealers can even get rid of their hydrogen vehicles. A cool and well intentioned experiment that ended in a GM-like disaster with many unhappy customers. I think that just highlights the big hurdles that hydrogen has and how much farther off, if ever, they'll hit the mainstream for cars. Electricity is everywhere already, hydrogen stations, not so much.
 

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Discussion Starter · #11 ·
LMC Automotive's forecasts, like those from any organization or individual, tend to be most accurate for near term periods. I think that's why Bloomberg used 2016-2019 historical data combined with LMC's 2020 to 2025 forecasts in its chart.

I haven't been able to find a similar chart that depicts LMC Automotive's forecasts for the 2025 to 2030 period regarding market share for BEV and hybrid vehicles in the U.S. - assuming of course that LMC has done forecasts that far in the future. If any GM Inside News members have that info and are allowed to share, please feel free to post it in this thread.
And I wasn't intending on putting you on the spot - do you agree that 2025ish is when BEV's will start gaining more traction as we see a lot more BEV's hitting the market?
 

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This is a religion, and there is no religion without sins
Forgive me Father for I have sinned. I bought an ICE and it ain't even a hybrid ;)
Isn't 2025 when we'll start seeing more BEV's from manufacturers? In other words, what will the chart look like from 2025 to 2030 as more BEV's become available? I feel like the chart is somewhat misleading - I subscribe to Business Week, but in the past two years they lost my confidence for impartial reporting.
Exactly. Things are changing and it's still a hard to call thing because of "third world" or poorer nations and their needs vs. capabilities. I find it interesting that towards the end of the article under GROWTH CURVES it says this:
While such FUD may have worked in the past when EVs were expensive and charging networks were sparse, it's less effective today, and it will probably be moot in a few years. Consumers aren't fooled, either. According to recent surveys, somewhere between 30 and 40 percent of consumers say their next purchase will be an EV. Some are following through with their decision sooner than later—plug-in vehicle sales in the US have more than doubled over the past year, compared with just 29 percent growth for the rest of the market.
If I read this the way I am or think it says, 60%-70% are definitely not leaning towards an EV and that to me is quite a substantial amount of people. :)
 

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Discussion Starter · #13 ·
Forgive me Father for I have sinned. I bought an ICE and it ain't even a hybrid ;)

Exactly. Things are changing and it's still a hard to call thing because of "third world" or poorer nations and their needs vs. capabilities. I find it interesting that towards the end of the article under GROWTH CURVES it says this: If I read this the way I am or think it says, 60%-70% are definitely not leaning towards an EV and that to me is quite a substantial amount of people. :)
It'll be interesting to see how this all plays out for sure. I think a lot of people are basing their BEV knowledge off of nerdy science project cars like the Leaf, that take hours to charge and look, well, nerdy. I bet perceptions change quickly, especially as high end makes start coming out with desirable, non-science project BEV's.
 

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It'll be interesting to see how this all plays out for sure. I think a lot of people are basing their BEV knowledge off of nerdy science project cars like the Leaf, that take hours to charge and look, well, nerdy. I bet perceptions change quickly, especially as high end makes start coming out with desirable, non-science project BEV's.
Yeah, just give us some mainstream SUV's and Sedans/wagons/hatches and see where things go.
 

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And I wasn't intending on putting you on the spot - do you agree that 2025ish is when BEV's will start gaining more traction as we see a lot more BEV's hitting the market?
No problem BlackGTP. In Europe and perhaps mainland China, yes. The heavy handed government dictates in those regions, including outright bans on gasoline, diesel, and in some cases hybrid vehicles, will contribute to BEV gaining traction by 2025 or even earlier whether consumers truly demand BEV or not.

In the U.S., things are more complex. California and the states that adhere to CARB ZEV mandates may see trends for BEV sales growth similar to that of Europe and China. But for the rest of the U.S., I think the growth of hybrids will likely outpace that of BEV well into the late 2020s and early 2030s.
 

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Some U.S. market sales data:
  • Sales of hybrids + FCEV from Toyota Motor Sales USA alone in 1st half of 2021: 299,811
  • Sales of BEV from all automakers combined in 1st half of 2021: 217,065
That's a result of the availability and affordability of EVs from brands =/= Tesla. Some buyers are still a little less trusting of Tesla and want a familiar ownership experience.

Once GM, Ford start rolling out semi normal looking/sized EVs at prices almost comparable to ICEs, then those BEV numbers will take off.
 

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IMO, there's a problem here for Toyota that's not directly connected to the timeline of EV adoption. Toyota is already seen by many young(er) buyers as their parents' brand. Toyota has the oldest buyers of any mainstream brand. Being late to EVs reinforces that "old man's/woman's car" image in the eyes of a lot of younger buyers. That, I think, is the real risk for Toyota here. It's one of image (with potentially big long term consequences) and not of near-term sales.
 

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I don't see thrifty tech averse Corolla buyers, especially those over 50, ever wanting an EV. I suspect the Corolla and its competitors will remain ICE for another 15 years at least.
They aren't the only ones. I don't think enough of the market is convinced with the current units available. Talked to two different Tesla owners that won't be buying another. Love driving the cars, but if anything goes wrong Tesla doesn't know who you are. One chap was driving a Model S with significant body damage because his body shop can't get parts.

Maybe if the mainstream mfgs get some appealing product out there, and maybe if there is a great leap forward in battery tech, but those are still maybes.
 

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They aren't the only ones. I don't think enough of the market is convinced with the current units available. Talked to two different Tesla owners that won't be buying another. Love driving the cars, but if anything goes wrong Tesla doesn't know who you are. One chap was driving a Model S with significant body damage because his body shop can't get parts.

Maybe if the mainstream mfgs get some appealing product out there, and maybe if there is a great leap forward in battery tech, but those are still maybes.
And once the mainstream manufacturers have enough of a "fleet" of EV's they've sold and are servicing through their own dealership networks this thing about Tesla and their own lack thereof may become an issue to the negative.
 
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