Is Toyota the King of the New Energy Vehicle Hill?

In the past year of 2023, Tesla Model Y’s global sales surpassed Toyota’s Corolla and became the world’s best-selling passenger car. This is the first time that an electric vehicle has topped the world’s best-selling model.

Tesla’s biggest competitor in the field of electric vehicles, BYD, has become the global new energy vehicle sales champion for the second consecutive year with sales of more than 3.02 million, and has become one of the top ten automakers in the world.

Amid the public outcry, the banner of the automobile empire seems to be being passed from traditional car companies to new energy car companies. Tesla, whose sales volume has not yet entered the top ten, has the highest market value among car companies, exceeding US$750 billion; Toyota, which ranks first in sales and has a net profit several times that of Tesla, has a market value of only US$251.2 billion.
This is the victory of the new forces and the pain of the old world.

When the East African savannas usher in the most abundant season of the year, hyenas go hunting in groups, while the lions, the top hunters, are waiting for their prey to mature and get ready to attack.

——Has the king of the old world really failed, or is he waiting for his prey to walk into his hunting ground?
Is Toyota a die-hard?

Toyota is a legend in the history of automobile development. Since its founding in the 1930s, it took Toyota more than 90 years to surpass Volkswagen and become the world’s number one car company in terms of sales. In the history of automobile development, the Toyota Production System he founded set a new benchmark for global manufacturing and became a landmark initiative like the assembly line created by Ford.

The Toyota Production System emphasizes reducing waste, improving efficiency and quality control. It also emphasizes the value of people, pursues the common progress of employees and management models, and adopts the principle of starting from easy to difficult in production and management to continuously improve and solve problems. . With the support of excellent production management and product design, Toyota not only dominates the European and American markets with its mid- to low-end models, but its high-end brand Lexus, launched in 1989, also quickly gained a significant share of the American luxury car market.

However, as time enters the era of new energy vehicles, Toyota has become synonymous with tradition and conservatism. In particular, Akio Toyoda, the former president of Toyota Motor who resigned not long ago and the eldest son of the fourth generation of the Toyota family, the “prince” who saved Toyota in times of crisis, has made many remarks that are not optimistic about electric vehicles.

In an interview, he publicly declared that electric vehicles are “low-level products” and not considered new energy sources, and said he would boycott them to the end. Because the electric energy in many countries is still fossil energy, if all the cars in the world are replaced by electric vehicles, the electric energy required will be twice the current amount, which will put huge pressure on the power grid and cause more pollution. .

He also pointed out that the development level of the global automobile industry is uneven, and many third world countries with relatively backward economies are not ready to embrace electric vehicles.

Unsurprisingly, these remarks became the target of verbal criticism in the media. In particular, a large number of Chinese self-media describe it as a backward representative of Toyota and even Japan’s new energy vehicles.

In fact, Akio Toyoda’s doubts about electric vehicles are not without reason. In November this year, global new energy vehicle sales reached a new high, reaching 1.4 million units, of which 1.026 million units came from the Chinese market, accounting for more than 73% of the global market share. In other countries, limited by climate, infrastructure construction, urbanization progress, energy prices, automobile industry development and other factors, new energy vehicle sales are not as strong as imagined.
And Akio Toyoda himself is not a die-hard.

As early as 2010, Akio Toyoda invested US$50 million in Tesla and announced that Toyota and Tesla would engage in technical business cooperation.

However, this cooperation encountered a lot of resistance within Toyota. The development department relied on Toyota’s technology accumulation in hybrid systems and continued to prevaricate: “Hybrid systems have motors and batteries. Just apply them to electric vehicles. , can be done at any time.” Therefore, the project progressed slowly.

After two years of cooperation with Tesla, Toyota finally launched the RAV4 EV equipped with Tesla’s electric vehicle system RAV4 in 2012. But embarrassingly, the RAV4 EV failed in the market, subsequent research and development was limited, and the cooperation ended in 2016.

While exploring electrification, Toyota has also allocated some of its energy to more distant intelligence. In January 2018, at the International Consumer Electronics Show in Las Vegas, the United States, Akio Toyoda announced: “Toyota will transcend a car company and transform into a mobility company that helps people travel in various ways.”

Even so, Toyota is by no means sitting still. It is restarting the road to electrification with amazing speed and adaptability.
silent attacker

In April 2023, Akio Toyoda handed over the position of President of Toyota Motor to Tsuneji Sato.

Tsuneji Sato previously served as Toyota’s chief brand officer and Lexus CEO. Lexus has taken the lead in making breakthroughs in electrification. The RZ series has become the first model of the Lexus pure electric platform and is now on the market. The cockpit design logic of this model is different from Toyota brand models, and has shifted towards smart cars.

Lexus is far more determined to electrify than the Toyota brand. They have clearly stated specific goals for electrification at each stage: launching electrified versions of all models in 2025; 100% electrification of its models in 2035; and achieving 100% electrification in 2050. Carbon neutrality target for the entire life cycle of each model.

It is not difficult to see that although Akio Toyoda does not appreciate electric vehicles, he chose Tsuneharu Sato to take over as president, which reflects Toyota’s determination to transform into electric vehicles.

After taking over as Toyota president, Sato did not blindly pursue the electrification of all products. He emphasized that Toyota would not shift its focus to pure electric vehicles in one fell swoop, but would instead provide hybrid vehicles and fuel cell vehicles based on the characteristics of each country and region. and other options for “all-round strategy.” At the same time, according to the plan, Toyota is expected to launch 10 pure electric vehicles by 2026, with annual sales reaching 1.5 million vehicles.

In 2023, when the Chinese media are still laughing at the Japanese automobile industry led by Toyota, Toyota has already made great strides on the road to electrification.

For the whole year of 2022, Toyota’s pure electric vehicles sold a total of 24,466 units globally, accounting for only 0.2% of total sales; by 2023, total sales of new energy vehicles in the North American market alone increased by more than 30%, reaching 657,327 units, accounting for 0.2% of total sales. 29% of sales; in the fourth quarter, Toyota’s pure electric vehicle sales in North America increased by 459%, reaching 5,718 vehicles.

In the Chinese market, FAW Toyota sold 284,983 electrified models, accounting for 35.6%, including both pure electric models and plug-in models.

The financial report also shows the results of Toyota’s transformation. From April to September 2023, Toyota sold 4.744 million cars globally, an increase of 14.1% over the same period last year. Net profit was approximately RMB 129 billion, a year-on-year increase of 121%. According to media statistics, in the first half of 2023, the combined profits of the top 10 Chinese car companies by sales were less than 1/3 of Toyota.
How did Toyota achieve such an immediate transformation?
Chinese inheritance and evolution

Toyota only launched its efforts in pure electric vehicles very late. From a broad perspective of new energy vehicles, Toyota’s layout is not only early, but also extensive.

As early as 1997, Toyota launched a hybrid model, an ace model that has created sales of more than 10 million units – the Toyota Prius, establishing Toyota’s ace position in the hybrid car market.

According to foreign media statistics, four brands, including Toyota and its other brands, sold more than 2.6 million hybrid vehicles in 2022, accounting for about 25% of annual sales. You know, BYD’s sales in 2022 will only be 1.8685 million vehicles, of which half will be pure electric and plug-in hybrid.

At the same time, Toyota is also an early player in the research and development and production of batteries. Even earlier than the Prius, Toyota established Prime Earth EVEnergy in 1996 to develop its efforts in the field of nickel-metal hydride battery technology. In 2003, Toyota began to develop lithium-ion batteries. In 2008, Toyota established a battery research department, which has Started researching next-generation batteries such as all-solid-state batteries; in 2021, Toyota decided to integrate the battery sector business and established PrimePlanet Energy & Solutions.

In June last year, Toyota announced that it would launch a pure electric model equipped with an “all-solid-state battery” as early as 2027, which supports ultra-fast charging and ultra-long battery life, and can travel 1,200 kilometers in 10 minutes of charging. In July, Toyota expressed its determination to halve everything from battery size to cost and weight.

As mentioned earlier, about 70% of global new energy vehicle sales come from China, so Toyota also regards the Chinese market as a testing ground for electrification.

In April last year, Toyota strategically proposed to implement “Chinese-style inheritance and evolution”, enhance the authority and independence of the Chinese team in intelligent electrification, and strengthen technical and industrial cooperation with Chinese companies; in June, Toyota announced in one breath Announced more than 20 developments including all-solid-state battery technology; in August, Toyota’s largest R&D center in China, “Toyota Motor R&D Center (China) Co., Ltd.”, was officially renamed “Toyota Smart Electric Vehicle R&D Center (China)” Co., Ltd., engineers from the R&D centers of the three joint venture companies of GAC Toyota, FAW Toyota and BYD Toyota will join the R&D projects led by the company. At the same time, Denso Corporation and Aisin Corporation under the Toyota Group will also participate in R&D activities. Accelerate the research and development of electrified powertrains.

Yes, BYD and Toyota established a joint venture in China. Toyota took the initiative to find BYD to cooperate, with each investing 50%. This cooperation is different from Toyota’s cooperation model with FAW and GAC. It is the first time that Toyota has carried out technologically equivalent vehicle development cooperation with a Chinese automobile brand to jointly develop pure electric vehicles and power batteries.

Toyota’s second pure electric car, bZ3, uses three-electric technology from BYD.

It is foreseeable that in 2023, Toyota will launch and test more electric models in the Chinese market, and Toyota’s own hybrid models will continue to make efforts in the Chinese market.
What can we learn from Toyota?

Chinese auto companies should not look at Toyota with a mocking attitude. There are still many things that the Chinese auto industry can learn from Toyota.

At the same time, Toyota’s electrification process reflects the limitations of traditional car companies, which is also a problem faced by many independent brands.

Akio Toyoda has always insisted that hydrogen energy, hybrids, plug-in hybrids and pure electrics should be developed simultaneously. The products that are actually implemented are mainly hybrids and have not gone all out in the pure electric field.

Akio Toyoda became president in 2009, and China began subsidizing new energy sources in 2009. His entire career at the helm happened to be the whole process from the germination to the explosion of new energy, especially electric vehicles. However, due to Toyoda’s personal judgment, he completely missed this period. At the same time, he failed to vigorously deploy and implement the hydrogen energy route he recognized. commercialize. These judgments on future technology routes have directly led to Toyota’s lag in electrification and intelligence today.

Akio Toyoda said at a press conference before leaving office, “I am of the older generation and I also feel the limitations of being a ‘car builder’. I think it is necessary to retire in the new era.” Akio Toyoda once revealed to people around him that “Toyota’s biggest business risk is that I have been the president.”

However, Toyoda Akio was able to discover his own limitations and quit quickly. It was not a bad choice to hand over the president to his juniors who know more about electric vehicles and smart cars.

The reflection and transformation of Japanese car companies is not untimely. The long-standing Tokyo Motor Show has been renamed the Japan Mobility Show. At the 2023 Japan Mobility Show last November, Toyota exhibited the electrified SUV concept car FT-3e. and sports car concept model FT-Se. In terms of intelligence and diversification, the KAYOIBAKO, an electric model that takes into account both personal travel and commercial transportation, and the IMV 0 pickup truck, which can be customized according to customer needs and adapt to different scenarios, are displayed.

In addition to the concept model displayed this time, Toyota has also previously released two pure electric models in China, “bZ SportCrossover Concept” and “bZFlexSpace Concept”, both of which are scheduled to officially enter the domestic market in 2024. .

In addition to Toyota’s determination to transform, its profitability is far beyond the reach of domestic new energy vehicle companies. In order to raise funds, Xpeng chose to enter into strategic cooperation with Volkswagen. NIO’s financing has been integrated into the Middle East. Ideal’s current three products are all extended-range electric vehicles. Toyota’s half-year profit exceeded the market value of Weilai and Xpeng.

Toyota has excellent profit margins all over the world. On the one hand, Toyota’s sales are indeed huge, and on the other hand, the key is that Toyota’s production structure and production methods in the global field are rejecting waste from the source.

At the supplier level, Toyota holds control over many of its suppliers. Toyota will regularly improve the production of these parts companies, prompting them to ensure quality from the source, optimize production, and solve waste problems, thereby achieving the purpose of reducing costs. This is similar to BYD’s entire industry chain model.

Through feedback from the Toyota Production System, Toyota will only produce vehicles according to market demand. Which models are in high demand, it will produce more in a targeted manner. For models with low demand in the factory, Toyota will produce less. Such flexible production allows Toyota to minimize the inventory of parts and finished products.

At the same time, Toyota’s employment principles are also very clear. They will not hire a large number of people when they need them and lay them off when they are not needed.

Toyota requires workers to be multi-skilled, so that one worker can adapt to multiple positions, and they can be busy even in times of recession. These fundamentally solve the human problem. This is in sharp contrast to the frequent large-scale recruitment and layoffs of domestic new energy companies.

To be a century-old enterprise, you must have enough say in the industrial chain. The development of automobile companies in Europe, the United States, Japan and South Korea has confirmed this iron law, and BYD’s dominance in China also proves that this iron law is also true in the new energy era. efficient.

The three major components of a traditional car, the engine, gearbox and chassis, have become batteries, motors and electronic controls after entering the new energy era. On the surface, the technical threshold has dropped, but for traditional cars to evolve into smart cars, in addition to the three electric , cars, cockpits, and even autonomous driving and other technologies are equally important.

Xiaomi, which started by stacking materials in the mobile phone market, has entered the new energy vehicle track and still insists on self-developed motors despite extremely limited time; Huawei, in order to improve its competitiveness in software, does not hesitate to cooperate in depth with Cyrus to avoid Blind investment at the hardware level; Geely bought Meizu in order to improve the car and machine experience.

Although Toyota’s electrification transformation started very late, with excellent production management, a large accumulation of hybrid technology, and a global supply chain, Toyota still has great potential in the new energy era.

Learn management from Toyota, learn to make profits, learn to reduce costs and increase efficiency, learn to make progress while maintaining stability, and avoid the pitfalls that Toyota has stepped on. Domestic new energy vehicles still have a long way to go.

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