Toyota is expected to outline adjustments to its electric-vehicle strategy to key suppliers early next year, as it races to narrow the gap on price and performance with industry leaders Tesla and BYD, according to a report published by Automotive News citing two people with knowledge of the matter.
The Japanese automaker is expected to detail the EV plan changes through early 2026, communicating the adjustments to major suppliers, the people said on condition of anonymity as the information is confidential.
Toyota has been looking at ways to improve the competitiveness of EVs being planned for this decade, in part by speeding up the adoption of performance-boosting technologies for planned EVs, from electric drive systems – including motors – to the electronics that convert power from the grid to energy stored in batteries and more integrated heating and cooling systems, the people said. The changes, however, might include delays to some of the EV development programs originally planned for the three-year period.
These changes would be for the successors to Toyota’s first two EVs for major markets, the bZ4X and the Lexus RZ, and intended to close the gap with Tesla on cost and performance. Toyota is set to convene a major gathering of suppliers in February, the first such global supplier convention since the pandemic.
Toyota said in a statement that it is “always actively discussing and working with key (suppliers and partners) on a variety of topics,” to achieve carbon neutrality. But it said it had no new details to disclose on EV development projects.
Elon Musk’s Tesla made almost 8 times the profit per vehicle as Toyota for the third quarter, partly because of its ability to simplify EV production and reduce cost, analysts have said. Toyota has been reviewing a $30-billion, three-stage plan for developing and releasing EVs it announced late last year, Reuters reported in October.
It has suspended work on some battery-powered car projects announced last year, while a working group headed by former chief competitive officer Shigeki Terashi looks to improve cost performance and technology in the fast-growing market for EVs. The working group has been charged with outlining plans to improve Toyota’s EV approach, including considering a potential successor to its new EV platform, e-TNGA.
Shigeki Terashi
The revamp comes even as Toyota holds the view that gasoline-electric hybrids, a market it pioneered with the Prius, will remain a crucial part of the transition to carbon-neutral transport. Most major automakers expect EVs to account for the majority of vehicle sales by 2030, and green investors and environmental groups have pushed Toyota to move faster as industry-wide EV sales exceed Toyota’s earlier assumptions.
The EV strategy
Toyota’s EV strategy has focused on the rollout of cars such as the bZ4X, the first of a string of full-electric vehicles under the series name “beyond zero.” The second stage of Toyota’s plan covers the next several years when Toyota has models based on the e-TNGA platform in development, the company has told some suppliers. Adjustments to this phase are the changes likely to be outlined to suppliers early next year.
Now Terashi’s group is considering whether to drop the three-year-old e-TNGA architecture, created by modifying a gasoline car platform, in favor of a dedicated EV platform, people with knowledge of that work have said. E-TNGA was designed so EVs could be built on Toyota assembly lines with gasoline cars and hybrids, a compromise that limits the automaker’s ability to deliver factory-floor innovations that Toyota engineers now recognize as key to Tesla’s strength.
Also, Toyota designed e-TNGA on the assumption it would need to sell about 3.5 million EVs a year, about one-third of its current global volume, by 2030, sources have said, while the industry outlook is for a faster pace of growth. Toyota has been working with two suppliers Denso and Aisin for its EV reboot.
It has been looking at whether it could expedite the adoption of a new thermal management system jointly developed by Aisin and Denso and potentially a more advanced electric powertrain, or eAxle, from Aisin. Toyota has also been looking at whether it could introduce in some large premium EVs a just-developed silicone-carbide-based inverter from Denso that would improve charging and help lower manufacturing costs.
Shigeki Terashi’s role in leading Toyota’s EV strategy review, after being sidelined in the company, has been seen by some as a sign the automaker is closer to a full pivot on EVs. Over the course of his 42-year career, Terashi who is now 67 years old, has been one of Toyota’s top vehicle planners and a strong advocate of zero-emission cars, including hydrogen.
He was part of the team that opened the way for Toyota’s cooperation with China’s BYD, the world’s largest EV maker. That resulted in the China-only Toyota electric sedan called the bZ3, powered by BYD Blade batteries which according to some reports can also be introduced in European markets.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com
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