Toyota rolls out “BEVs in earnest.”

BEVs in earnest. Picture (c) Bertel Schmitt

The common narrative among the disruption-demographic is that large “legacy” automakers are asleep at their four wheels. The not-so-common version is: Step aside when they wake up. The step-aside moment was today, when world’s largest automaker Toyota laid out its electrification plans.

In a press conference at Toyota’s Megaweb in Tokyo, EVP Shigeki Terashi started out complaining to reporters that some of his limelight was stolen during Akio Toyoda’s announcement of a battery joint venture with Panasonic. Then he revealed that:

  • Toyota will introduce more than 10 battery-electric models by the early 2020s. It will start doing so in China, with Japan, India, United States, and Europe to follow.
  • The company will expand its fuel cell line-up for passenger and commercial vehicles
  • Toyota’s hybrid line will grow, with different versions addressing the performance, luxury, utility, and lower cost markets. Plug-in hybrids will also become more numerous.
  • Beginning in 2025, Toyota will phase out models exclusively powered by ICEs.

By 2030, Toyota wants to electrify half of its output, or some 5.5 million units per year. The bulk of that, some 4 million units, will be hybrids, Toyota’s plans say. Pure battery and FCV vehicles will amount to one million units, or thereabouts. This would be around 10% of Toyota’s current output, and it reflects the company’s thinking of where the global market share of pure BEV will be by the end of the next decade. The numbers do not include units produced by Toyota companies Daihatsu and Hino, Terashi said, so the total should be higher.

“From 2020: BEV rollout in earnest” proclaimed a slide behind Terashi, but it also showed that in Toyota’s mind, the BEVs are far from taking over the world. Pure ICEs are thought to have died off come 2050, said the chart, replaced by mostly hybrid and plug-in hybrid vehicles. Two skinny slivers on the chart stood for the projected market share of BEVs and FCVs, but the FCV sliver seemed a little skinnier than the BEV part – a chart that would have been heresy at Toyota not too long ago.

The driving factors are not overwhelming customer demand, but government regulations, Terashi said today. Toyota exudes a sudden confidence that new battery technologies will be able to solve the current cost and convenience conundrums. Toyota’s solid-state battery, developed for more than 10 years, appears to be only a few years away from a commercial launch. As far as customer demand goes, when a Wall Street Journal reporter asked Terashi when Toyota’s EVs will be in showrooms in the U.S., Terashi alluded to the popularity of gasoline-powered trucks, saying: “I’d like to turn that question around and ask you when it will be in America that people get in the mood to say, ‘Forget about trucks, I’d like to buy an EV.’ ” The common narrative forgets that trucks and SUVs have a market share of over 60% in the U.S., while the share of pure battery-electric vehicles hovers below 1%.

Today again, Toyota dug deep into its history for strands of DNA that could be presented as evidence that it had always been deeply committed to the battery cause. Today, we heard that Toyota established a battery research lab in 1939, and that 11 million batteries have been placed into Toyotas since the company launched its Prius hybrid in 1997. Sakichi Toyoda’s battery challenge of 1925 was mentioned again today, and it’s probably no idle stroll down memory lane.

The other day, I witnessed a discussion between a Bloomberg reporter and a Toyota manager. The reporter said that batteries most likely will never approach gasoline in energy density and charge time convenience. The manager answered: “If that would be the case, battery-electric vehicles would have no future.” Toyota now clearly thinks that BEVs have a future, and reaching out to Panasonic, it secured a supplier for the huge volume of batteries it thinks will be needed in a not-so distant future.

For more than a decade, Toyota showed a chart that relegated battery-electric vehicles to the realm of pizza-delivery and personal mobility, with the bigger and long-distance vehicles powered by fuel cell. Today, a new chart was thrown against the wall, with battery use cases going all the way into former FCV territory. According to the new chart, fuel cells will mostly power trucks and buses.

Toyota’s board member Shigeki Terashi currently is head of Toyota’s powertrain division, but he will change into a new job next year: “I often complained to engineers that they spend too much money on R&D. The engineers said I should try doing it myself if I know better. So next year, I will become Toyota’s head of R&D.”

His budget will be 1.5 trillion yen, or roughly $15 billion over the next 10 years, with “about half of that going to battery technology,” Terashi said.

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