Toyota and Honda prep true electric car pivots to match Tesla's EV production costs and performance
After being comparatively late to the EV party, both Toyota and Honda plan to step up their transition strategies with the ultimate goal to become major electric car players that can rival Tesla. In the case of Toyota, that means developing a brand-new EV platform from scratch that will allow it to drastically cut production costs and increase its electric vehicles’ performance and efficiency to match Tesla’s numbers. Currently, Tesla earns eight times Toyota’s profit per vehicle and plans to drastically cut the production costs of both its existing Model 3, and the upcoming mass market Model 2.
According to Reuters’ sources, Toyota is arranging a sit-down with its major suppliers to inform them of a new 3-year EV strategy that will run through 2026. At stake is its current e-TNGA electric vehicle platform that has been created as an afterthought so that its current ICE and hybrid vehicle production lines can churn out the occasional electric car as well, resulting in models like the Toyota bZ4X or the Lexus RZ. Some of the models Toyota planned to release when it announced a halfhearted EV strategy last year, may be scrapped altogether, while “a working group headed by former chief competitive officer Shigeki Terashi looks to improve cost performance and technology” of the new electric cars it will build.
In order to achieve its EV cost reduction concurrently with a performance boost, Toyota may be planning a brand-new platform that will be developed from scratch as a pure electric play with a grand EV pivot in mind. Toyota is reportedly probing some of its main suppliers for adoption of their cutting-edge electric vehicle technology research. It plans to use a new silicon-carbide inverter from Denso and the efficient eAxle drivetrain of Aisin, as well as their jointly developed thermal management system.
A dedicated meeting with Toyota’s suppliers is scheduled for February and afterwards Toyota could make its complete EV pivot and dedication public with more details on future models. The production cost savings and performance boost technologies, however, could manifest as soon as the eventual Toyota bZ4X or Lexus RZ successors, claims the report.
The other major Japanese holdout – Honda – recently announced a US$40 billion EV transition strategy of its own, including a new and aggressive e:N2 EV platform design, but it plans to undercut Tesla on the budget sub-US$30,000 end of the market where the world's largest EV maker has virtually no presence. Honda already released or teased several affordable electric vehicle options which fit that bill, but its production plans have now expanded, it seems. It has allegedly placed a big order with the world’s largest EV battery maker – CATL – for no less than 123 GWh in total battery capacity which would go into more than 2 million of its future electric vehicles.
That huge order immediately catapults it to being CATL’s second largest customer after Tesla and marks a sincere Honda effort for a true electric pivot in its turn. Honda recently announced a joint venture with Sony that could make its upcoming electric vehicles a PlayStation 5 system on wheels of sorts, giving it an immediate advantage before Tesla’s infotainment system, too.