Toyota Motors Is Accelerating Its Electric Vehicles Strategy – Forbes

Posted: Wednesday, November 30, 2016

While electric vehicles (EVs) and self-driving cars are being touted as the future of the automotive industry and several players are looking to increase their fleet of EVs, Toyota Motors is likely to start mass production of its electric vehicles by 2020. The company is forming an “in house venture company” which will solely focus on EVs. While Toyota has been introducing environment-friendly vehicles in the form of hybrid, plug-in hybrid and fuel cell vehicles (FCVs), the company believes that, in view of the rapid strengthening of regulations around increasing the use of zero emission vehicles, the need to have a product line up which can respond to these regulatory changes is essential. While several countries are pushing for zero emission regulations, the preferred solutions are different. China believes that EVs could be the right answer, while Japan is investing heavily in fuel-cell technology. Toyota already has a strong line up of FCVs and the new venture company is aimed towards innovation in the EVs segment. We believe accelerating the pace of development of EVs can ensure that Toyota is better prepared for the future regulatory environment globally and can retain its tag of the world’s largest automaker by sales.

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Faster Response To Zero Emission Regulations

As several countries move towards zero emission regulations for the automotive industry, Toyota is looking to accelerate its EV project process to enable fast-to-market products. The company is looking to create a structure that will allow it to commercialize EVs at an early stage, as an alternative means of achieving zero emissions. Given, Japan’s focus on fuel cell technology, Toyota Motors has already put special focus on Fuel Cell Vehicles (FCVs), which, in terms of fuelling times, cruising range and other aspects, offer convenience on par with the company’s gasoline powered vehicles. However, with regions outside of Japan (especially China) considering EVs as the “eco-car”, Toyota Motors needs to accelerate development in this segment to cater to its consumers in the U.S. and Asian countries such as China and India. Nearly 40% of the company’s revenues company from regions outside of Japan and hence it needs to be prepared with a mass-market eco-friendly vehicle for these regions. The company is looking to introduce more hybrid cars in India as the country works on stricter emission and fuel efficiency norms starting 2017.

With pollution increasingly becoming a concern globally and regions such as China pushing EVs as a solution, Toyota Motors appears to be working on a plan to ensure preparedness for future. While Toyota might become a direct competitor to Tesla Motors in future, we believe that this strategy of increasing focus on EVs (as opposed to FCVs) is to create an eco-friendly car for international markets, since through an efficient FCV the company appears to have right eco-car for Japan.

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