Toyota has been slow to embrace electric vehicles (EVs), and its efforts in this area have been underwhelming.
While the brand has released new hybrid models, including trucks and SUVs, its purely electric offerings like the bZ4X crossover and the Lexus RZ 450e have fallen short. Experts conclude that these vehicles lack innovation and failed to meet expectations.
However, the situation is changing now as Toyota has new leadership and a different approach toward EVs. The company is heavily investing its engineering expertise and production knowledge to revamp its EV operations.
According to Gear Patrol, Toyota has ambitious plans to sell 1.5 million EVs annually by 2026. This would be an increase of more than 5,000% from 2022.
And paradoxically, Toyota’s delay of electrification could be the very factor that causes it to overtake Tesla.
Why Toyota was smart to take its time with EVs
Toyota had the advantage of waiting to adopt EVs. Being a market leader, it could observe how the EV market unfolded and choose the right moment to enter.
While EV enthusiasts criticize Toyota’s hybrids, the brand offers the best and most capable hybrid options. Successful Toyota hybrids include the Highlander, Grand Highlander, Sienna, and Prius Prime.
Toyota’s decision to wait may provide them with a competitive advantage. Tesla gained an edge by being the first serious player in the EV market, but other legacy automakers who entered early have faced challenges.
EVs are not yet profitable on their own, and mass-producing them has been a struggle for many companies. While Ford received praise for vehicles like the Mustang Mach-E and F-150 Lightning (which were retrofitted with electric components), these are not long-term solutions.
Ford will need to develop a dedicated EV platform for their F-Series trucks to remain competitive.
Toyota’s technology can overtake Tesla’s
Toyota is joining the EV market later compared to other automakers, but it’s taking a more thoughtful and technologically advanced approach.
Toyota has announced ambitious plans to develop smaller, lighter, and more affordable EV batteries. The company seeks to produce solid-state batteries that can deliver over 900 miles of range and charge fully in under 10 minutes.
Additionally, Toyota is working on lithium-iron-phosphate batteries that provide 20 percent more range than the bZ4X model while costing 40 percent less. This range of battery options will enable Toyota to offer EVs for various customer preferences, from a high-performance LFA replacement to an affordable electric Corolla.
Apart from focusing on battery technology, Toyota is also revamping its production process to reduce costs and complexity. Similar to Tesla, it’s implementing giga-pressing and modular vehicle design. Toyota is also eliminating anchored production lines.
These manufacturing innovations, combined with improved batteries, will enable Toyota to offer an impressive and diverse EV lineup.
Toyota can fill niches untapped by Tesla
While Tesla has built a strong brand and experienced remarkable growth, Tesla’s product lineup mainly revolves around variations of the Model S. In contrast, Toyota aims to strategically differentiate its EV lineup and cater to specific buyer preferences.
With the development of family-friendly and enthusiast-oriented vehicles, such as a three-row EV crossover and an electric version of the Tacoma, Toyota aims to deliver the EVs that buyers have been eagerly anticipating.
Lexus, Toyota’s luxury brand, is planning to become fully electric in America by 2030. With its focus on quietness, comfort, and premium interior materials, Lexus is poised to offer a compelling alternative to minimalist Teslas.
The main problem that has been holding Lexus back is its outdated engine technology. And this may no longer be an issue by the end of the decade.
History could repeat itself
Toyota, the largest automaker in the world, has a history of surpassing established manufacturers.
In the 1990s, Lexus forced Mercedes to change its business practices. By 2007, Toyota had overtaken Ford to become the #2 US automaker due to its success in the affordable car segment.
While Tesla has set the rules in the EV industry, Toyota’s success lies in its ability to deliver quality, durability, and reliability. This could cause Toyota to overtake Tesla in the near future.