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Toyota Is Rushing For An EV Resetting As It Aims To Tackle Tesla

Toyota Is Rushing For An EV Resetting As It Aims To Tackle Tesla
Toyota is rethinking its electric-car strategy in order to rival in a thriving market that it has been slow to enter, and has halted some work on existing EV projects, according to four people with knowledge of the still-developing plans.
If embraced, the proposals under consideration would represent a dramatic shift for Toyota, rewriting the $38 billion EV rollout plan announced by the Japanese automaker last year in order to compete with the likes of Tesla.
Toyota has charged a working group with outlining plans for improvements to its existing EV platform or a new architecture by early next year, according to the four individuals.
Meanwhile, Toyota has halted work on some of the 30 EV projects announced in December, including the Toyota Compact Cruiser crossover and the battery-electric Crown, according to sources and a document reviewed by Reuters.
Toyota stated that it is committed to carbon neutrality but did not elaborate 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.
Since the plans have not been made public, the four sources declined to be identified.
The proposed redesign could slow the rollout of EVs that are already in the works. However, it would allow Toyota to compete with a more efficient manufacturing process as industry-wide EV sales exceed Toyota's earlier projections.
Furthermore, it would address criticism from green investors and environmental groups that Toyota, once regarded as an environmental darling, has been too slow to embrace EVs.
Toyota is considering a successor to its EV-underpinning technology, e-TNGA, which was unveiled in 2019. Toyota would be able to cut costs as a result, according to the sources.
The first EV based on e-TNGA, the bZ4X crossover, was released earlier this year, but it was marred by a recall that forced Toyota to halt production in June. Production began again earlier this month.
According to the sources, the review was prompted in part by the realization among some Toyota engineers and executives that Toyota was losing the factory cost war to Tesla on EVs.
According to the four people, Toyota's planning assumed that demand for EVs would not take off for several decades.
Toyota created e-TNGA so that electric vehicles could be manufactured on the same assembly line as gasoline vehicles and hybrids.
That made sense based on the assumption that Toyota would need to sell about 3.5 million EVs per year by 2030 – roughly one-third of its current global volume – to remain competitive, according to the sources.
Toyota vehicles are seen at a briefing in Tokyo on the company's battery EV strategies.
However, EV sales are increasing faster. Global automakers now expect EVs to account for more than half of total vehicle production by 2030, as part of a $1.2 trillion industry-wide investment wave.
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 such as a two-decade-old overhaul of its development and manufacturing processes.
"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.
Terashi's team is considering combining e-TNGA with new technologies to extend its usefulness, according to three sources.
Terashi could also propose that e-TNGA be phased out sooner and replaced with an EV-specific platform designed from the ground up. According to two of the sources, new models could take about five years. "There isn't much time to waste," one said.
Toyota is collaborating with suppliers and considering factory innovations, such as Tesla's Giga Press, a massive casting machine that has simplified work in Tesla plants.
According to the sources, one area under consideration 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 mobilized.
This could allow Toyota to reduce the size and weight of an EV battery pack while saving thousands of dollars per vehicle, according to one source familiar with the matter, making it a "top priority" for Toyota suppliers Denso and Aisin. Denso (6902.T) and Aisin (7259.T) did not respond immediately.
Toyota, the world's largest automaker, has acknowledged that Tesla has set a new benchmark for EV manufacturing costs, signaling a significant shift.
When Toyota acquired a stake in Tesla and the two companies collaborated to produce a battery-electric version of the RAV4, many Toyota engineers believed Tesla's technology posed no threat, according to reports quoting sources.
"They concluded back then there wasn't much to learn," one of the sources said.
Toyota ceased production of the electric RAV4 in 2014 and exited its stake in Tesla in 2017.
When Toyota finally established a dedicated zero-emissions division and began developing an e-platform in 2018, Tesla already had three models on the road.

Christopher J. Mitchell

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