Toyota gloats it was right to sit out the EV craze as Honda ends cheap electric car project with GM
While Elon Musk's efforts to explain the drastic slump in EV demand were rather haphazard during Tesla's Q3 press conference, Toyota's CEO engaged in a bit of a gloating "we told you so" moment over at the inaugural Japan Mobility Show. There, Toyota and Lexus showcased a number of new models that will only be arriving after 2025 when Toyota is ready to mass produce them on a new dedicated EV platform with a gigacasting method that beats Tesla in terms of production speeds and costs.
While GM, Ford, and many other legacy automakers were pouring billions in EV development and battery factory joint ventures in the last few years, trying to catch up to Tesla, Toyota has been taking it slow. Its CEOs have argued that not only are the public and infrastructure still not ready for a rapid transition to entirely electric mobility, but automakers will have a hard time turning a profit making electric cars after early adopters in developed countries are done buying.
According to Toyota's Chairman Akio Toyoda, now people are "finally seeing reality" as "there are many ways to climb the mountain that is achieving carbon neutrality." Instead of jumping head-first into EV investments, Toyota bet on its stopgap hybrids. The new Prius Prime, for instance, can cover the typical daily commute on electric power alone, but is way cheaper to make than an EV as it has a much smaller battery pack backed up by an efficient gas-powered engine.
As a result, Toyota has been somewhat vindicated with booming sales of hybrids, while GM, faced with a nosedive in EV demand, rejiggled its plans for making 400,000 units by mid-2024. It also ended a US$5 billion partnership with Honda over the development of a cheap sub-$25,000 electric car built on its Ultium platform.
Honda's CEO Toshihiro Mibe clarified that "after studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV." "GM and Honda will search for a solution separately," he added. At the Japan Mobility Show, Honda resurrected its storied Prelude in an EV form, as if an example that it will be going it alone with the EV transition strategy, perhaps replicating Toyota's more cautious approach.