Toyota rethinks EV plan to better fight Tesla

Toyota is reportedly undergoing a dramatic restructuring of its $US38 billion ($A60b) electric vehicle strategy after the realisation it was losing the “factory cost war” to Tesla.

According to multiple sources speaking to newswire Reuters, the massive review was triggered by Toyota engineers and executives and has seen work suspended on some of the 30 EV projects announced under its mid-term strategy in December last year.

Among the EV projects reportedly on ice is the development of a flagship all-electric Toyota Crown limo.

Among the production-oriented EV concepts shown last year were a reborn Toyota FJ Cruiser, a ute, sports car and a variety of SUVs, crossovers, sedans, vans and more.

As part of the review, a special group set up within Toyota will now outline revised plans to senior management as soon as early next year, detailing how rapid improvements can be made to boost profit margins and reduce complexity of every model it makes.

The sources suggested that part of the problem is the e-TNGA development was compromised by the desire to build EVs on the same production line as combustion vehicles underpinned by the TNGA platform.

Toyota is also said to have vastly underestimated demand of EVs, with the e-TNGA architecture developed on the presumption that it would underpin 3.5 million electric car a year – a third of its current global sales volume.

The Japanese auto giant now expects half of all cars it produces by 2030 will be battery-electric, a number far beyond the original projection.

As part of the restructuring, Toyota’s rollout of EVs could be slowed as it rapidly introduces more efficient manufacturing processes.

However, the revised plan could also see battery-electric models eventually introduced at a faster rate off the back of higher-than-expected adoption of zero-emissions vehicles in many of its major markets.

Heading up Toyota’s EV review is Shigeki Terashi – Toyota’s former chief competitive officer – who is considering either scrapping e-TNGA altogether or adding new technology designed to reduce the cost of construction.

Another idea is fast-tracking an all-new platform with cost savings built in.

However, that could take as much as five years to realise, with the added knock on of redesigning and re-engineering cars that were originally meant to sit on e-TNGA.

To reduce build costs further, other ideas on the table are said to include massive casting machines similar to the ones Tesla uses.

Copying the leading US brand’s EV thermal management system that combines the passenger air-conditioning with electric powertrain cooling (and heating) is also on the menu in a bid to simplify models.

Finally, reducing the size and weight of battery packs has also become a “top priority” for Toyota suppliers Denso and Aisin, according to sources.

These sources reportedly said the biggest issue within the car-maker is Toyota hugely underestimated the threat Tesla posed following its collaboration a decade ago that created the all-electric Toyota RAV4.

The complacency that Tesla wasn’t a true rival led to Toyota not only selling its stake in Tesla in 2017 but also delaying setting up its own EV division until 2018 when the US brand had already cornered the EV market.

The market-leading brand’s first EV in Australia will be the Toyota bZ4X that is now scheduled to launch next year.

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