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Toyota & Subaru Shares Drop on “Embarrassing” Recall

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Shares of Toyota and Subaru witnessed a sudden dip as the two Japanese automakers recalled their first mass-made all-electric cars, launched hardly two months ago, because of a risk of wheels coming loose. This is seen as a setback to their ambitions to electrify the model range.

Related: Toyota Recalls bZ4X EV Over Concerns About Loose Wheels

Toyota announced to recall 2,700 units of its bZ4X electric SUV while Subaru in which Toyota has a nearly 20% stake, also said it was recalling around 2,600 units of the Solterra, the sister product of bZ4X. The recall adds to problems at Toyota, which has been forced to cut production frequently this year due to the global chip shortage and other supply issues and is facing investor pressure because of its questionable slow pace towards embracing battery electric vehicles (BEVs).

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According to an analyst at CLSA, “It’s embarrassing. People have waited so long for Toyota to get a mass market battery electric vehicle … and just a few weeks after they get it in the market there’s a recall.” Spokespersons at Toyota and Subaru said the companies had not yet decided how soon they could fix the problem and proceed with the rollout, because the cause had not yet been determined.

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Once a favorite with environmentalists for its popular Prius hybrid model, Toyota has come under fire for not acting quickly enough to phase out gasoline-powered cars and for its lobbying on climate policy. The company has repeatedly pushed back against the criticism, arguing the necessity to offer a variety of powertrains to suit different markets and customers.

Related: Japan Elevates Hybrid Policy After Toyota Chief’s Warning

Acting on Toyota’s pressure, Japan recently changed a key policy document to show its support for hybrids, saying they were on par with BEVs. A lawmaker cited that Toyota chief said they could not back a government that rejected the technology popularized by the Prius. Gasoline-electric hybrid models remain far more popular in Toyota’s home market than EVs, which accounted for just 1% of passenger cars sold in Japan last year, based on industry data.

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