Toyota Australia targeting EV leadership

Toyota has aspirations to lead the local EV market when it finally starts selling its first battery-electric vehicle in Australia in the second half of 2023.

Despite a glacial start in the fast-growing EV space, the bold ambition to establish the long-awaited Toyota bZ4X as a major EV player in Australia means toppling market leader Tesla – as well as dozens of rivals that have beaten the nation’s top-selling brand to market with an electric car.

It also means selling more EVs than Volkswagen, which is also a year away from releasing its first all-electric model – another mid-size electric SUV, the Volkswagen ID.4 – yet also has plans to be Australia’s EV market leader, in this case by 2027.

But it’s a challenge Toyota Australia’s vice-president of sales, marketing and franchise operations, Sean Hanley, believes the brand is up for.

“Toyota always aspires to be market leader, so why would it be any different on an EV?” says Hanley, who argues the Japanese brand is ahead of rivals in electrification due to more than two decades of hybrid leadership.

“The market will determine that. We believe we’ll have a great product offering.”

The Toyota bZ4X – which has an identical twin in the Subaru Solterra, which is due on sale here in the first half of 2023 – is a RAV4-sized SUV available in single-motor front-drive and dual-motor all-wheel drive forms. It is the first of a family of battery-powered bZ (or beyond zero) models from Toyota.

The bZ4X was initially due on sale here by now but was shifted back to next year. It has since been further delayed until the second half of 2023 due to demand in other regions and supply chain challenges.

No doubt it hasn’t helped that Toyota was forced to recall its first EV due to the wheels (literally) falling off. But Toyota is promising big things when the first examples of the bZ4X roll off boats Down Under later next year.

Hanley says Toyota wants to make a splash with early sales, although he concedes it won’t be available in the sort of numbers Tesla has been selling in recent months (thousands per month).

“I think we’ll have enough launch volume… We’ll have enough cars to appropriately launch it and make a statement that Toyota has arrived on the BEV scene.”

But the bZ4X is not about to tackle the similarly-sized RAV4 – Australia’s most popular SUV – in terms of outright sales volume.

“I wouldn’t suggest we’ll have thousands in the first six months. I’m not sure the market is there for thousands in six months.”

One of the challenges is price. Hanley has warned the bZ4X will not be cheap and will arrive with a price premium compared with the brand’s hybrid alternatives.

But ultimately, Toyota’s sales chief believes the bZ4X can be a volume player within the Toyota family, even if he doesn’t expect EVs to be ‘mainstream’ for some time yet.

“I hope we can sell thousands [per month]. If demand is there and the market is there Toyota will have a product offering… and I hope they embrace it.”

But while Toyota led the discussion with hybrid vehicles years before they gained widespread popularity, it has been slow to enter the battery-electric vehicle race, which is beginning to boom off the back of increased buyer interest and the availability of more models. 

Reiterating his recent defence of the lack of any Toyota EVs to date, Hanley says Toyota is not opposed to battery-electric vehicles but they aren’t the only way to reduce CO2 emissions.

“We think we’re hitting the market at an appropriate time when it’s starting to mature,” says Hanley. “I think we’re right on time. Our hybrid credentials over the last 22 years will hold us in good stead.

“Our plan is very simple and I think very practical. We believe that to get to carbon neutrality, you have to take everyone on the journey. You have to have a solution for the market you operate in.

“Now in the market we operate in, we believe right now that the solution is a diversity of product and powertrains, so in other words, we’ll have a battery-electric vehicle for some customers who’ll want that in town, we’ll have hybrid electric vehicles, fuel-cell electric vehicles, and plug-in hybrid electric vehicles.

“By 2030, every Toyota in our range apart from GR performance cars will have some form of electrification.

The point is this: carbon is the enemy here, not the powertrain.”

Toyota has been vocal about calling for mandated emissions targets rather than mandated technologies such as battery-electric vehicles, which is the tech that has boomed in popularity over the past two years, but says customers will drive demand for greener cars – not legislation.

Toyota argues the enemy is CO2, not internal combustion engines.

“We are in full support in some sort of mandated type of legislation around CO2,” says Hanley. “The one thing everybody agrees with, I believe, is we have to get to a carbon-neutral position.

“Toyota is not arguing the toss on that. That’s not a debate. Even with the most extreme viewpoint, we agree you’ve got to get to carbon-neutral.

“All we’re disagreeing with is how and when you get there.

Some of this belief that you can just go full electric in 10 years in this country and satisfy the punters, satisfy the owners, satisfy what they want to do in cars, is a very difficult proposition.”

Toyota defends its late arrival to the EV space by arguing it has significantly lowered its CO2 footprint by selling 300,000 hybrids over more than two decades.

About 30 per cent of Toyota’s sales are now hybrid models, which are powered purely by petrol but use around half the amount of fuel.

Hanley said the emissions reductions of three hybrid vehicles are “almost equal” to that of one electric car and that the 300,000 hybrids Toyota Australia has sold so far are equivalent to the CO2-reduction effect of introducing about 90,000 EVs.

In a passionate and unrehearsed response to questions around delays with Toyota Australia’s first EV, Hanley told journalists at last week’s Corolla Cross launch that Toyota was ahead of its competitors when it came to carbon reduction.

“I’ll ask you this question: in October 2001, how many car companies were even talking about battery-electric cars, and how many were launching hybrids?” he asked rhetorically.

“I’ll help you answer it. Two. Honda Insight – on and off the market for various reasons, twice pulled out of the market – and Toyota Prius.

“Toyota has been the only brand in the market since that time with a hybrid offering. But of course, now it’s suddenly become trendsetting.

“I’d suggest we played a role in reducing carbon 21 years ago. Not three years ago when it became trendy.”

Toyota has made it clear it is considering five different technologies to lower the CO2 emissions of its future vehicles, including the HiLux, Fortuner, Prado and LandCruiser. Those technologies are hybrid, plug-in hybrid (PHEV), battery-electric (BEV), fuel-cell electric (FCEV) and internal combustion engines running on hydrogen.

“This whole notion that battery-electric vehicles are going to be flying and produced, and that’s going to be the only solution, well I’d challenge that in so far as ‘where are you going to get the metals to make all those batteries in the next five years?’

“That’s why diversity of technologies, diversity of powertrains is deeply important to our strategic thinking.

“It’s not that we’re opposed to BEVs. We’re not. Toyota is not opposed to BEVs. In fact, we’re going to launch our first BEV in the second half of next year.”

Hanley says the expectation of all companies – even those outside automotive – is that “you must care about the environment and you must demonstrate a plan to reduce any negatives footprint you may have”.

“CO2 is top of mind for the industry and Toyota right now, as it should be, and it is,” he said.

- With Alexandra Lawrence

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