Toyota Is Putting Its Electric Future in the Hands of Four People – Fortune

Posted: Saturday, November 19, 2016

A little more than a year ago, Toyota announced ambitious goals to slash emissions from new vehicles and its production processes. To get there, the company said it would turn to hydrogen, not electric-powered vehicles.

Now, the Japanese automaker is bringing electric cars back in the fold. Well, sort of.

Toyota announced it would establish an in-house venture company responsible for developing electric vehicles. But this is hardly represents a major re-allocation of capital or business strategy.

The so-called “virtual” organization—code for lots of conference calls and video meetings—will consist of four people. Each member of this in-house venture company will come from a different Toyota company, including Toyota Industries Corporation, Aisin Seiki Co., Denso Corporation, and Toyota Motor Corp.

The new venture company, which will launch next month, will be independent of other internal structural organizations, Toyota says.

Toyota tries to emphasize the benefits of such a small team. One line in its announcement says:

Its small organizational structure is meant to enable it to implement unconventional work processes, leading to accelerated project progress and, thus, fast-to-market products.

And the Japanese automaker stresses it has long taken a “multi-angled approach” to introducing environment-friendly vehicles. Toyota has developed hybrid vehicles and plug-in hybrid vehicles, for instance.

But Toyota has admittedly put a special focus on fuel cell vehicles because it views this alternative fuel as the ideal in terms of cruising range and fueling times.

Toyota now seems to be acknowledging that the tradewinds are heavily favoring electric vehicles.

“Differing energy and infrastructure issues around the world and the rapid strengthening of regulations aimed at increasing the use of zero-emission vehicles have heightened the need for product lineups that can respond to various situations,” the company says in its announcement.

Toyota Is Investing In Trade Skills

The automaker says it will continue to promote fuel cell vehicles as well as create a structure that will allow it to commercialize EVs at an early stage, as an alternative means of achieving zero emissions.

It’s unclear whether a four-person team can effectively leverage its own internal resources to develop an EV program. On its face, the effort certainly seems weak. TMC President Akio Toyoda sees it differently.

“Over these past few years, which we have positioned as years for strengthening our planting of seeds for the future, we have taken such measures as establishing the Toyota Research Institute, made Daihatsu a fully owned subsidiary and have begun work to establish an internal company responsible for compact vehicles for emerging markets,” he says in a statement. “The new organizational structure for EVs is a part of this effort. As a venture company that will specialize in its field and embrace speed in its approach to work, it is my hope that it will serve as a pulling force for innovation in the work practices of Toyota and the Toyota Group.”


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