4 min read

Is Toyota really an EV villain? 🦹‍♂️

Does Toyota's surprising past bring hope on the company turning around when it comes to electrification?

It sure doesn't look pretty.

Toyota is currently the world's largest car company, having sold 9.5M vehicles in 2020.

You've probably seen the damning news for a while now. Here are a few:

  • Toyota, once a leader of electrification, is now lagging.
  • The CEO said EV trends are "overhyped".
  • Toyota being a donor for lawmakers against climate change consensus.
  • Toyota was with Trump, against California setting its clean air standards.

Turns out, it's getting worse.

Now, per the NYT, Chris Reynolds, a top Toyota executive has met with congressional leaders behind closed doors to advocate against the Biden administration’s plans to spend billions to incentivize the shift to EVs solely, pushing hybrids and FCEVs in the mix.

Despite all this, Toyota has revealed plans to release 15 new battery-electric vehicles by 2025 (see our issue #27).

So which is it? A company of the future or one of the past?

We agree and embrace the fact that all-electric vehicles are the future,

said Toyota spokesman Eric Booth. But Toyota also thinks that

too little attention is being paid to what happens between today when 98% of the cars and trucks sold are powered at least in part by gasoline, and that fully electrified future.

Can we predict Toyota's future by looking at its past?

I want to thank Faheem from Keemut here for pointing me to see the perspective of Toyota's past.

Faheem was an engineer at Toyota and was also approached by Tesla back then. He saw the culture and product development of both companies and says Toyota is more risk-averse than Tesla, especially since the Unintended Acceleration controversy.

The Supercar Project

In 1993,  a cooperative research program called "The Partnership for a New Generation of Vehicles (PNGV)" was formed between the US government and three US auto corporations, DaimlerChrysler, Ford Motor Company, and General Motors.

Dubbed unofficially the "Supercar" project, the objective was to bring extremely fuel-efficient vehicles (80 mpg or 2.9L/100km) to market by 2003.

The results by 2001 were three fully operational concept diesel-electric cars with 3- or 4-cylinder diesel engines and NiMH/lithium batteries. This is the GM Precept Hybrid:

Now, for some reason, in 2001 the program was canceled by the Bush Administration, at the request of the automakers themselves.

This is why Prius was made

As this PNGV was a US domestic project, Toyota wasn't invited to participate as it was a Japanese company. This hurt Toyota, as it had already considered itself as an American company, which had invested a lot of money in US factories. Honda was in a similar spot. They called themselves glocalized companies: making globally developed and distributed products, which are adjusted for local markets.

So when the Big3 above went on to develop the "Supercar" together with the US government, Toyota saw this as a big threat to its business. A possibility of superior technology was imminent.

This lead Toyota to start its own R&D for a fuel-efficient car, which became...

*drumroll, please*


Now, funnily enough, the real ones that lost here were the US Big3 that left out Toyota in the first place. Toyota became the world's largest automaker with a big help from developing this new technology, while they... just scrapped the project.

While the world was still guzzling as much gas as it could, the Prius, which was launched in 1997 and became a total hit after the second generation in 2003, has since been the signature of hybrids worldwide.

This is where in my eyes the real fuel efficiency of the modern days started.

Toyota and Tesla

In 2010, Tesla and Toyota had a partnership where Tesla supplied the lithium metal-oxide battery and other powertrain components from the Roadster and later Model S for Toyota RAV4 EV.

2010 Also saw Toyota taking a $50M stake (about 2.5%) in Tesla Motors and Tesla taking over the NUMMI plant that Toyota closed in Fremont, now known as Tesla Fremont Factory, where the whole S3XY lineup is made.

“Toyota was once a start-up company. Working with Tesla will provide us with a powerful stimulus," the president of Toyota, Akio Toyoda said back then.

So, looks like Toyota believed in Tesla when others didn't even come close yet.

Another fun bit from the past: The Reuters article cites that "Governor Schwarzenegger said Tesla eventually could create 1,000 jobs." You know nothing, Arnold. Today the plant employs over 10,000.

Toyota's Way

Toyota does a lot of planning. Largely we could put it at about

80% planning and 20% execution.

Now if we put Tesla on the same scale I'd say most probably it fits about

80% execution and 20% planning.

What do you think is a good balance in today's world? Tweet at me or reply to this email with your take.

Will Toyota gear towards execution?

I do not endorse the ways Toyota is trying to slow down the electrification - I rather despise these moves - but I can understand its conservative approach to committing to fully electric cars. After all, that's how the "personality of the company" looks to be like throughout the years.

Now if Toyota *does* turn around and embrace EVs, who knows what will happen. I'm excited to find out.

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