Toyota falls behind while investing in Tesla and BYD first

The route determines the height

In 2020, Toyota’s brands recorded annual sales of 9.528 million units, surpassing VW’s brands with 9.305 million units sold, topping the global ranking again after five years. The ranking has gone up, but sales have fallen, but interestingly, Toyota’s net profit for 2020 rose by more than 10%.

Toyota falls behind while investing in Tesla and BYD first

Volkswagen and Toyota 2024 production count forecast

According to IHS forecasts, after Toyota achieves catch-up with VW in 2020, the two will be in a stalemate in 2021, after which Toyota’s sales will gradually pull away from VW. What’s interesting is that as one of the world’s first car companies to cut into new energy, Toyota’s relationship with the major car companies is also very delicate.

We rarely see the media and enthusiasts discussing Toyota’s new energy models, leading some people to believe that Toyota has fallen behind in the new energy era. So, is this really the case? At a time when countries in major global auto markets are issuing fuel car bans, what will be the next step for automotive giant Toyota?

Toyota’s old logic
Contrary to today’s new energy stereotypes, Toyota was a major participant in the Japanese Ministry of International Trade and Industry’s electric vehicle research and development program as early as the 1970s, and had a presence in the electric vehicle market.

In 1983, Toyota launched the EV-10; in 1985, the EV-20; and in 1987, the EV-30. After the 1990s, Toyota launched the Townace Van EV in 1993 and the RAV4 EV in 1997, respectively, based on the previous technical upgrades.

This period of Toyota’s electric vehicle market, more on the research subject attributes, that is, through cooperation with the Ministry of International Trade and Industry, the technology systematization for informal market validation. This approach inevitably caused Toyota to be more experimental in the field of electric vehicles and weaker in the market, and coupled with the technical limitations at that time, Toyota found that these models had short range, high cost of battery technology, long charging time and other problems in the process of sales, resulting in electric vehicles only being “short-distance city cars”, and could not be The electric cars are not available on a large scale.

From the 1990s, Toyota began a large-scale layout in the hybrid power, hybrid power is the solution to new energy vehicles, which Toyota is sure of.

About the hybrid system, there is a saying in the auto industry: there are only two kinds of hybrids in the world, one is Toyota hybrid, one is other hybrids. Toyota THS mass production time is also in 1997, THS to achieve the ultimate purpose of the hybrid system: to allow the engine in different energy consumption conditions, always maintained in the high efficiency of the working range, so as to achieve the purpose of fuel saving.

Toyota falls behind while investing in Tesla and BYD first

Toyota hybrid power system development history

THS is also known as planetary-gear power system. In THS, the engine corresponds to the planetary frame; the motor responsible for managing the engine corresponds to the sun wheel; and the motor mainly responsible for driving corresponds to the gear ring, while the gear ring is connected to the wheels through the drive chain.

Compared with its contemporaries, THS achieves fuel saving, but the disadvantage is also obvious: THS cannot output all the power to the wheel end as the driving force, and is essentially a power shunt type system, which predestines the Prius models equipped with THS to have insufficient acceleration ability. For example, the power motor that drives the wheels directly has a peak power of only 29kW, while the power of the Wuling Rongguang 1.2L engine with the same overall mass is 60.3kW as stated.

To make up for the shortcomings of the initial THS, Toyota has upgraded this system several times in the following two decades, the most representative one being the THS system on the third-generation Prius in 2009, one of which was to increase the engine displacement to 1.8L and the other was to adopt a new inverter. With these two upgrades, the measured fuel consumption of the third-generation Prius reached 4.3L/100km, a level directly ahead of the entire fuel car era.

Meanwhile, in Toyota’s largest overseas market, the United States, the first generation of Tesla’s pure electric car was officially mass-produced.

On the contrary, Toyota, pure electric power, hybrid, hydrogen energy, fuel cells and other new energy vehicle types, Toyota are involved, “the piano and the calligraphy and painting all kinds of things, but all kinds of not fine”, especially the reliance on THS, directly led to the next decade of Toyota’s strategic miscalculation.

Miscalculation of Tesla
In 2010, the 52-year-old Toyota Zhang-nam went to the United States to attend the hearing for the brake door incident, and bowed in apology under the global media’s limelight.

On the sidelines of the hearing, Akio accepted Musk’s invitation to Musk’s place of residence in California, where Musk took the newly introduced Roadster, the first Tesla model, for a spin with Akio in order to win the attention of the new president.

The two companies hit it off and signed a series of cooperation agreements, two of which were like a blessing in disguise for Tesla, which has been losing money and burning money for seven years.

One, Toyota invested $50 million in Tesla and received 3% of Tesla’s shares, relying on this money, Tesla’s Roadster was able to go public.

Two, Toyota sold an abandoned factory in Fremont, near Silicon Valley, to Tesla, which transformed the factory into the Tesla Fremont Super Factory, Tesla’s largest production capacity base.

The injection of capital gave Tesla the blood that allowed it to continue operations; the provision of the factory gave Tesla the possibility of having cars available for production, and the subsequent partnership between Toyota and Tesla resulted in the introduction of an improved version of the RAV4 EV, the first and last model to be introduced after the two companies’ partnership.

The RAV4 EV was sold in 2012-2014, which was the “honeymoon period” between the two companies, when Toyota set a sales target for the RAV4 EV to sell 2,600 units in three years, but the final sales were not announced by either side, and it is believed that the expected target was not met.

In 2015, Musk’s senior assistant Gillen left the company and has been the driving force behind the cooperation with Toyota since joining Tesla in 2010. After the two sides signed a cooperation agreement, Gillen led the renovation of Tesla’s super factory in Fremont, and it was this production line, which was called “cobbled together”, that helped Tesla complete the delivery of the Model 3.

And then after the story is clear to everyone, Toyota chose to reduce its holdings of Tesla shares, and finally sold all in 2017, from then on completely ended the cooperation with Tesla.

Did it really fall out of line?
The cooperation between Toyota and Tesla is not so much about complementary advantages, but rather about taking what you need.

For Toyota, it is more to use the technical advantages of Tesla’s pure electric vehicles to develop the pure electric vehicle market; Tesla is trying to use this Toyota’s mature supply chain and management capabilities to bring their products to market faster.

The 2012 RAV4 EV, which forced Toyota to face the reality of failure in terms of pure electric vehicles, is different from the previous EV-10 or even the 1997 RAV4 EV, the 2012 RAV4 EV is the first pure electric vehicle launched by Toyota in the United States.

In a way, the failure of the 2012 RAV4 EV led directly to Toyota’s full shift to THS and slowing down the pure electric vehicle process.

In 2015, Toyota’s fourth-generation THS system was launched, after which it was successively equipped to the mainstream new energy models launched by Toyota, which can be simply understood that Toyota has landed the direction of new energy vehicle development on hybrid vehicles with THS. It should be noted that Toyota is the most conservative giant among car companies for the pure electric market, if Toyota’s new energy strategy are upward changes, it means that the whole electrification trend is further determined.

In the electric planning developed in previous years, Toyota’s expectations for pure electric are very low, but in the past two years, Toyota has realized that the wind has changed, so in 2019 proposed the latest electrification strategy, plans to sell 5.5 million electrified vehicles in 2025, including hybrid, plug-in, pure electric and fuel cells, of which 1 million pure electric vehicles and fuel cells combined, and before that, this is 2030 target, a full five years ahead of schedule.

In fact, since 2020, Toyota has launched a new pure electric vehicle platform and six global BEV models, including small, midsize and large vehicles.

In Europe, the car ownership side is nearing saturation, while most European countries have introduced plans to stop selling fuel cars, while the Chinese market is still growing. In 2020, Toyota recorded about 1.8 million units in China, up 10.9% year-on-year, close to one-fifth of Toyota’s global sales and substantially more than the 993,000 units sold in Europe.

But the biggest windfall in China at this stage is the pure electric vehicle, according to public information, Toyota’s actions can be divided into three steps.

First, “oil to electricity”, on the basis of mature models, through the fuel car architecture for electric vehicle improvement, this way can quickly launch pure electric models, but limited to the fuel car itself in terms of structural constraints, the range of such models there are certain problems, in sales is expected to have a small resistance, but can quickly improve in the plug-in hybrid market share, to brand power to obtain market repercussions.

Second, through the establishment of joint ventures, such as the establishment of a joint venture with BYD, BYD to OEM, the introduction of BYD’s existing experience and technology, rapid electrification; joint venture with Ningde Time, cut into the battery field to obtain pure electric battery support, etc., these initiatives to a certain extent to make up for some of Toyota’s shortcomings at this stage.

Third, the launch of a new model of pure electric platform, a new design for electric vehicles, from the battery module, motor, electric control and other aspects of the optimization of the model design, in order to achieve the core requirements of extended range.

From the point of view of Toyota’s current actions, it seems to want to make up for the strategic miscalculation missed, only, with Tesla to stimulate the catfish effect, as well as the rise of China’s new car makers, leaving Toyota not much space.

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