Toyota's confusion

[jcal0820]

Interesting article I just came across; been seeing this non-committal theme from Toyota on the future of EV's. Maybe still getting cold feet?

https://electrek.co/2019/01/17/tesla-model-3-affecting-prius-sales-toyota-not-convinced-evs/

 

[Sammydee]

Toyota is a global company, a leader in every country around the world. The number of countries that have electric car infrastructure is, well, a tiny number. When will it be credible to use electric cars in, say, Brazil?

For the vast number of countries in the world, it really is unlikely that they will have a robust electric car infrastructure anytime in the next 25 or 30 years. Toyota is right that in the majority of the world electric cars are unlikely to make a dent anytime soon.

Tesla is right to focus on electric cars and bring the US and Europe there. Toyota is also right that the second world isn't going to get it done, and something else may be needed. I strongly doubt there hydrogen push is going to go anywhere, but really electric isn't either in those countries.

 

[sreams]

Toyota is a global company, a leader in every country around the world. The number of countries that have electric car infrastructure is, well, a tiny number. When will it be credible to use electric cars in, say, Brazil?

For the vast number of countries in the world, it really is unlikely that they will have a robust electric car infrastructure anytime in the next 25 or 30 years. Toyota is right that in the majority of the world electric cars are unlikely to make a dent anytime soon.

Tesla is right to focus on electric cars and bring the US and Europe there. Toyota is also right that the second world isn't going to get it done, and something else may be needed. I strongly doubt there hydrogen push is going to go anywhere, but really electric isn't either in those countries.

There is nothing forcing Toyota to sell every model it makes to every market.

 

[Peteski]

“There’s not much growth in that industry"

Comments like this ^ from the likes of Toyota show how they seem incapable of extrapolating into the future. If a recent start-up like Tesla can sell hundreds of thousands of high end EVs with dubious build quality and become a globally recognised brand, then I would suggest the demand for growth in the EV industry is probably already there and simply held back by the reluctance of the giants to actually fuel that growth.

My prediction is that those auto companies who keep their heads in the sand for too long will face extinction within the next couple of decades. Those who start to diversify their product range to include desirable EV options should flourish. Before Tesla came along, EVs were a pretty dull and/or quirky bunch of niche products! Judging global demand for EVs off the sale of Leaf, Zoe, i3 etc seems a bit odd given that none of those vehicles are really mainstream products. Tesla sales in their respective markets are far more representative of demand and the M3 should really take off in the mid-market sector, competing directly against premium compact ICE alternatives.

 

[Peteski]

.....just to add, if Nissan were able to sell the first generation Leaf despite its pretty hideous styling, short range and dull performance, then imagine how well a desirable long range EV like the M3 should sell? Even the relative success of their own fugly looking Prius should have been a good clue!

 

[JPUConn]

Toyota is too busy releasing a BMW with a Supra badge.

 

[Matt L]

Toyota is a global company, a leader in every country around the world. The number of countries that have electric car infrastructure is, well, a tiny number. When will it be credible to use electric cars in, say, Brazil?

For the vast number of countries in the world, it really is unlikely that they will have a robust electric car infrastructure anytime in the next 25 or 30 years. Toyota is right that in the majority of the world electric cars are unlikely to make a dent anytime soon.

Tesla is right to focus on electric cars and bring the US and Europe there. Toyota is also right that the second world isn't going to get it done, and something else may be needed. I strongly doubt there hydrogen push is going to go anywhere, but really electric isn't either in those countries.

Just saying...you should look up what first world, second world and third world really means and the history behind those terms. They aren’t economic strata.

 

[Knightshade]

“There’s not much growth in that industry"

Comments like this ^ from the likes of Toyota show how they seem incapable of extrapolating into the future. If a recent start-up like Tesla can sell hundreds of thousands of high end EVs with dubious build quality and become a globally recognised brand, then I would suggest the demand for growth in the EV industry is probably already there and simply held back by the reluctance of the giants to actually fuel that growth.

It's also held back by the fact it's physically impossible to build enough batteries for EVs to replace even a majority of ICE cars, and will be for years to come.... and that's ignoring the charging infrastructure concerns (both public and home charging) in many countries too.


None of that is to say EVs won't continue to see very significant market growth in very mature/higher tech markets, or that they aren't the future most places.... but when you start at almost 0 it's easy to have massive growth for a while and still be a minority of the market.

And folks convinced ICE is "dead" and everything will be EV in a decade or two just aren't doing the math. Barring some incredible tech breakthrough where you can make massive #s of long-range batteries out of much less rare things much more easily and cheaply than today, that is simply physically impossible. (and that's without getting into having enough on-demand extra grid power to routinely charge almost 90 million new EVs annually- the rough total of new vehicles sold annually)

 

[jkoya]

Maybe Toyota has too much invested in the Mirai fuel cell car. I'm not that far from the California Fuel Cell Partnership and I've yet to see any Mirai cars on the road and they would be hard to miss.

 

[chronopc]

Toyota is a global company, a leader in every country around the world. The number of countries that have electric car infrastructure is, well, a tiny number. When will it be credible to use electric cars in, say, Brazil?

For the vast number of countries in the world, it really is unlikely that they will have a robust electric car infrastructure anytime in the next 25 or 30 years. Toyota is right that in the majority of the world electric cars are unlikely to make a dent anytime soon.

Tesla is right to focus on electric cars and bring the US and Europe there. Toyota is also right that the second world isn't going to get it done, and something else may be needed. I strongly doubt there hydrogen push is going to go anywhere, but really electric isn't either in those countries.

China, US, and Europe are the largest 3 markets though.

From what I understand, Toyota still doesn't believe EVs are the future and are still holding on hope for Hydrogen.

 

[Peteski]

None of that is to say EVs won't continue to see very significant market growth in very mature/higher tech markets, or that they aren't the future most places.... but when you start at almost 0 it's easy to have massive growth for a while and still be a minority of the market.

Yes, but we are very much in that massive growth phase and almost certainly will be for the next decade or more. I'm not expecting ICE to become totally extinct, but there will be a significant swing toward EVs in developed countries. By the end of this year our household will be 100% EV and we have no plans to go back. In the last year we've seen a significant number of friends and colleagues either moving to EVs or seriously thinking about it. Without making any effort whatsoever we racked up 5 Tesla referrals in the last 6 months All people we knew who were thinking of buying one anyway, saw ours and then took the plunge. My wife runs a small accountancy business and hardly a week goes by now without one of her clients asking about EVs for business tax savings. Our local town is also extremely EV friendly with charge points everywhere and free parking incentives. It even has an EV experience centre where you can try out a selection of EVs on extended test drives (promoted by the local council and one of the public charger suppliers). It's all happening before our own eyes.

The only thing holding it all back is lack of vehicle choice right now. You've got Tesla at the top end, the Jag iPace, a few oddballs like the Leaf, Zoe, i3 etc and now the Model 3 smack in the middle. There's never going to be any shortage of demand for those few vehicles, even if the likes of Nissan and BMW try to make them as quirky and alien as they possibly can to their core customers! Tesla on the other hand have a mixed reputation in the UK, so a lot of people are still waiting for the German alternatives to arrive. It's all there for the taking, but doesn't look like Toyota are going to get a slice, lol!

 

[Knightshade]

Yes, but we are very much in that massive growth phase and almost certainly will be for the next decade or more. I'm not expecting ICE to become totally extinct, but there will be a significant swing toward EVs in developed countries. By the end of this year our household will be 100% EV and we have no plans to go back. In the last year we've seen a significant number of friends and colleagues either moving to EVs or seriously thinking about it. Without making any effort whatsoever we racked up 5 Tesla referrals in the last 6 months All people we knew who were thinking of buying one anyway, saw ours and then took the plunge. My wife runs a small accountancy business and hardly a week goes by now without one of her clients asking about EVs for business tax savings. Our local town is also extremely EV friendly with charge points everywhere and free parking incentives. It even has an EV experience centre where you can try out a selection of EVs on extended test drives (promoted by the local council and one of the public charger suppliers). It's all happening before our own eyes.

Well...the tax benefit for most goes away end of the year (and is already half what it was last month).

And while your personal anecdotes are great they're not really reflective of the country as a whole...In the UK for example pure electric cars were only about 1% of vehicle sales.... (plug in hybrids on the other hand, which Toyota DOES sell, were almost 3% of sales)

And in the US even with all that MASSIVE jump in sales thanks to model 3, EV sales in the US in 2018 accounted for...about 2% of US vehicle sales (and the recent significant decline in gas here isn't gonna help either)

The only thing holding it all back is lack of vehicle choice right now. You've got Tesla at the top end, the Jag iPace, a few oddballs like the Leaf, Zoe, i3 etc and now the Model 3 smack in the middle. There's never going to be any shortage of demand for those few vehicles, even if the likes of Nissan and BMW try to make them as quirky and alien as they possibly can to their core customers! Tesla on the other hand have a mixed reputation in the UK, so a lot of people are still waiting for the German alternatives to arrive.

well, lack of choice to include any significant # of less expensive models...Teslas own letter last night points out even they are in trouble if they can't get profitable on cheaper cars and reach non-rich people.

It's all there for the taking, but doesn't look like Toyota are going to get a slice, lol!

Toyotas point is they don't need a slice right now.

They're insanely profitable while largely ignoring the EV market- because it's a tiny market, and it'll still be tiny in 5 years- and that's 5 years they don't need to spend tens of billions in CapEx for battery factories with a technology that might be outdated in 5 years.

Is theirs the best, smartest bet given their current position? Maybe, maybe not. But it's not as crazy a one as some folks seem to think, and Toyota is a very conservative company in general.

 

[Peteski]

Toyotas point is they don't need a slice right now.

They're insanely profitable while largely ignoring the EV market- because it's a tiny market, and it'll still be tiny in 5 years- and that's 5 years they don't need to spend tens of billions in CapEx for battery factories with a technology that might be outdated in 5 years.

Is theirs the best, smartest bet given their current position? Maybe, maybe not. But it's not as crazy a one as some folks seem to think, and Toyota is a very conservative company in general.

So their strategy is to basically ignore the whole EV market at this point, while investing in fuel cell tech. I'm not convinced, but I suppose it should maximise their short to medium term profits.

 

[Knightshade]

So their strategy is to basically ignore the whole EV market at this point, while investing in fuel cell tech. I'm not convinced, but I suppose it should maximise their short to medium term profits.

Yup.

And in a few years ICE will still be the vast majority of vehicles anyway- and they can reevaluate where battery/EV tech is and see what investments might make sense for them.

and it's not as if they're doing NOTHING....

https://www.nature.com/articles/nen...DRL21b6kMO9&tracking_referrer=arstechnica.com

that's a paper from Toyota scientists researching solid state LiIon batteries for example as a superior alternative to what's in use today.

Their thinking seems to be why drop billions developing todays EV battery tech when there'll almost certainly be one or more generations better stuff available for them to invest in by the time EVs become enough of the market they have to get seriously into it.


This obviously doesn't work for Tesla since they don't have a dominant legacy ICE business to make large near/medium profits on to fund such a thing in a few years- but it might work for Toyota.

VW is going heavy EV earlier in contrast despite having a legacy business- but of course they had the whole diesel thing they had to do something to get past too.

 

[Jayc]

Yup.

And in a few years ICE will still be the vast majority of vehicles anyway- and they can reevaluate where battery/EV tech is and see what investments might make sense for them.

and it's not as if they're doing NOTHING....

High-power all-solid-state batteries using sulfide superionic conductors | Nature Energy

that's a paper from Toyota scientists researching solid state LiIon batteries for example as a superior alternative to what's in use today.

Their thinking seems to be why drop billions developing todays EV battery tech when there'll almost certainly be one or more generations better stuff available for them to invest in by the time EVs become enough of the market they have to get seriously into it.


This obviously doesn't work for Tesla since they don't have a dominant legacy ICE business to make large near/medium profits on to fund such a thing in a few years- but it might work for Toyota.

VW is going heavy EV earlier in contrast despite having a legacy business- but of course they had the whole diesel thing they had to do something to get past too.

Toyota has invested in Hydrogen long term so giving up now will do no good. Going fully EV is therefore not an option either not to mention the shame. Toyota will be okay for the next decade selling hybrids to the world but if they cannot establish hydrogen as a profitable business by the end of it, they are doomed.

What they also don't realise is that Tesla is changing the whole landscape of what a vehicle is and how we interact with it. They also don't realise that Tesla doesn't really carry a lot of baggage in terms of cell technology, that is Panasonic's business and therefore the risk of battery tech getting outdated is nonexistent. If Tesla can further drive EV costs down and learn from Toyota on how to do reliability right, they will reach the top in worldwide sales within the next couple of decades.

 

[Nocturnal]

I think their interest in hydrogen and inability to secure the batteries that would be required are the reasons.

 

[Knightshade]

Toyota has invested in Hydrogen long term so giving up now will do no good. Going fully EV is therefore not an option either not to mention the shame. Toyota will be okay for the next decade selling hybrids to the world but if they cannot establish hydrogen as a profitable business by the end of it, they are doomed.

What they also don't realise is that Tesla is changing the whole landscape of what a vehicle is and how we interact with it. They also don't realise that Tesla doesn't really carry a lot of baggage in terms of cell technology, that is Panasonic's business and therefore the risk of battery tech getting outdated is nonexistent. If Tesla can further drive EV costs down and learn from Toyota on how to do reliability right, they will reach the top in worldwide sales within the next couple of decades.

Tesla currently produces more kwh of car battery than everyone else in the world combined.

And they account for less than 0.5% of annual car sales worldwide. (about 300k cars out of about 80 million sales)

To be "top in worldwide sales" they'd need to increase output (and sell every car they make) by roughly 35 times their current output (somewhere in the ranges of 11 million cars a year)


Even if you could imagine somewhere they'd come up with the capital to build 35 more freemonts AND 35 more gigafactories (or a combo one like in China- the only one that is even under construction and won't be fully up until 2020) given the current debt and profit situation I don't think you can explain how it's physically possible for them to increase battery output that much- given the limitations on supplies of things like lithium and cobalt.... (granted some new not-existing-yet battery breakthrough could solve some of this- if/when it actually, affordably, exists)

A much slower growth is far more likely given the numerous constraints both economic and physical.

Pretty much the folks who think Tesla is going to die are overly pessimistic about what they've done so far and what they will likely go on to do... but a lot of folks on the other side are also wildly over-optimistic about what the future holds for them.

 

[caskater47]

Toyota, to me, is the old man sitting on his porch complaining. Their brand is stale, their products look and feel ancient. They have no sex appeal, no enthusiast appeal. The new Toyota Z4 (oops, "Supra" ) is a prime example of how they just don't get it.

Toyota is the new GM. Leave them to die...

 

[chronopc]

Tesla currently produces more kwh of car battery than everyone else in the world combined.

And they account for less than 0.5% of annual car sales worldwide. (about 300k cars out of about 80 million sales)

To be "top in worldwide sales" they'd need to increase output (and sell every car they make) by roughly 35 times their current output (somewhere in the ranges of 11 million cars a year)


Even if you could imagine somewhere they'd come up with the capital to build 35 more freemonts AND 35 more gigafactories (or a combo one like in China- the only one that is even under construction and won't be fully up until 2020) given the current debt and profit situation I don't think you can explain how it's physically possible for them to increase battery output that much- given the limitations on supplies of things like lithium and cobalt.... (granted some new not-existing-yet battery breakthrough could solve some of this- if/when it actually, affordably, exists)

A much slower growth is far more likely given the numerous constraints both economic and physical.

Pretty much the folks who think Tesla is going to die are overly pessimistic about what they've done so far and what they will likely go on to do... but a lot of folks on the other side are also wildly over-optimistic about what the future holds for them.

Definitely not going to happen over night but there are promising signs. Being able to build a factory in China is definitely going to help.

 

[chronopc]

I think their interest in hydrogen and inability to secure the batteries that would be required are the reasons.

I find their stance on batteries surprising given how early they were in adoption hybrids.