Toyota Is Plotting a Massive Strategic Shift to Keep up with Tesla

Toyota is reportedly “scrambling” to keep up with Tesla.

Published March 1, 2023

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Toyota has been perhaps the most vocally skeptical car brand regarding electric vehicles. But that dynamic is about to change in a big way. We saw the brand reveal a smorgasbord of new EV projects back in 2021. And it appears even that pivot may not have been ambitious enough.

Reuters reported in October that Toyota was considering a reboot of its EV strategy. And Automotive News has some further details about what the new “EV-first” mindset will look like under new CEO Koji Sato. Toyota isn’t abandoning its multiple-powertrain strategy with combustion engines, hybrids and hydrogen. But they are about to get far more serious about building electric cars.

Toyota will develop an EV-only platform

Per Automotive News, Toyota does not think the e-TNGA platform, a specialized version of the TNGA platform that underpins the Toyota bZ4X, Subaru Solterra and Lexus RZ is good enough. Toyota can’t match or exceed Tesla’s production efficiency with it. And the packaging limits the size of the battery pack, which — as we have seen with those vehicles — limits the range.

The development shift could further delay Toyota getting some EVs to market. Toyota has to settle on a new design direction and develop prototypes and eventual production cars based on that direction. Toyota’s plans also include a broader rethink of their manufacturing and will require retooling plans that are tooled to build TNGA-based vehicles.

The new platform should mean significant changes at Lexus and Toyota

The new EV platform is expected to arrive in 2026 and underpin a range of Lexus vehicles as part of the plan to sell 1 million Lexus EVs globally by 2030 and be 100 percent EV by 2035.

It’s not clear which Toyota EV projects that have been reported will be affected. Automotive News says Toyota will not abandon the bZ lineup in the interim. But Reuters reported that the Compact Cruiser off-roading crossover and an all-electric version of the new Crown sedan might be two future Toyota EVs that get shelved. And we’re eagerly awaiting word — for personal and professional reasons — about the potential electric Tacoma.

These are changes Toyota dearly needs

Toyota is well situated for the present, where less than five percent of American vehicle sales are electric cars. But Toyota could face a situation where more than half of new vehicle sales will be electric by 2030 — and Lexus’s competitors have gone 100 percent electric. Toyota may arguably be ahead of Honda in getting mass-market American EVs to market. But they are also well behind Korean competitors like Hyundai and Kia.

Toyota strengthening its EV hand would also improve the brand’s public relations. Instead of positioning itself as a leader in the industry, Toyota has been seen as more of a retrograde actor, lobbying against EV-friendly legislation in Japan and the United States. That state of affairs has squandered much of the goodwill with environmentalists Toyota earned by launching the Prius in the 2000s.

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