Toyota Stock: First ‘Real’ Electric Car’s Early Sales Results (NYSE: TM)

Scott Olson

Almost every automaker group consists of multiple brands, and at this point there are precious few who have not yet launched at least one or two battery-electric vehicles (BEVs) produced in at least somewhat meaningful volume. Entities such as The Volkswagen Group (OTCPK: VWAGY), Mercedes (OTCPK: DDAIF) (OTCPK: DMLRY) and Peugeot-Fiat (STLA) have so many volume BEVs in production at this point that it’s almost impossible to keep track of them anymore.

For the last decade, the most notable large automaker BEV laggard had been Toyota (NYSE: TM). It had experimented with BEVs in small volume, but Toyota is of course most famous for having applied battery-electric power in hybrid combinations with gasoline engines, starting 25 years ago. Toyota has been the King of hybrids for 25 years. This was laudable, but the world had been waiting to see how Toyota could compete with all the other automakers in the most competitive BEV segments.

This article is about the financial impact to Toyota from its first pure electric (intended) high-volume dedicated BEV, the earliest sales results from May and June, and what this tells us about the second half of 2022 and beyond.

Toyota’s partnership and cross-ownership with Subaru

Building on top of Toyota’s almost total focus on hybrids for two decades, Toyota started the development after 2015 on its first BEV that was meant to be a mainstream vehicle produced in respectable volume. Considering Toyota’s minority ownership interest in Subaru (OTCPK: FUJHY) (OTCPK: FUJHF) and its other development and production collaborations there, it is perhaps not surprising that this all-electric Toyota is a joint Toyota-Subaru affair – where Toyota had primary development responsibility, not just manufacturing. In contrast, the Toyota 86 and Subaru BRZ are essentially the same vehicle, principally developed by Subaru and manufactured in a Subaru factory,

The first version of this Toyota-Subaru cooperation is built by Toyota in Japan. While development started in 2015, after a natural development and testing cycle, production started in early 2022 and first deliveries took place in the US in May 2022 and in Europe in June 2022. It will be sold across the major geographies where BEVs are sold the most – Europe, North America and parts of Asia.

The vehicle: bZ4X

It pains me having to comment on Toyota’s choice of name for this nameplate. BZ stands for “beyond zero”, the number four represents the relative size (a hair below a global average), and X means that it’s an SUV-crossover. I apologize on behalf of Toyota, regarding this tortured choice of name.

The size and shape of this first meaningful Toyota BEV is in the heart of the global market today – the so-called “compact SUV” segment. Toyota is already the global leader here, with the RAV4 gasoline, hybrid and plug-in hybrid (PHEV) best-seller portfolio. For example, the RAV4 has been the best-selling non-pickup truck vehicle in the US for half a decade already.

It should therefore come as no surprise that a majority of automakers have made this segment its first volume entry into the all-electric field. Let’s take a look at some of the examples among the more expensive competitors at the higher-end of the compact (and ever-so-slightly larger) SUV price range ::

  • Jaguar I-Pace

  • Audi e-tron and Q4 e-tron

  • Tesla Model Y.

  • BMW i3X and iX

  • Mercedes EQA, EQB and EQC

  • Cadillac Lyriq

  • Genesis GV60

Among the relative “budget” options:

  • Volkswagen ID4

  • Skoda Enyaq

  • Volvo XC40 and Polestar 2

  • Ford Mustang Mach-E

  • Kia EV6 and Niro EV

  • Hyundai IONIQ 5 and Kona EV

  • On the way to US dealerships soon: Nissan Ariya

For markets outside the US, there are already many more options (a couple of the ones listed above are unavailable in the US too). This article focuses mostly on what is or will soon be available in the US market – which in turn tends to be similar to the Canadian market.

The introduction of the Toyota bZ4X

The bZ4X was first shown in “near-production” concept form in the second quarter of 2021. I was underwhelmed at that time, as I thought both the exterior and the interior were inferior, design-wise, to almost every other entry in the segment .

As a result, I was pessimistic when I went to drive the final version of the Toyota bZ4X, and examine it in the flesh, in late March 2022. As it turns out, many changes had been made to the “near-production” concept a year earlier, to the point where I really like the design – inside as well as out. I am not going to say that it is the prettiest exterior – many of the entries in the segment have more elegant or slightly more interesting designs – but I think that the final bZ4X production design places at least among the better segment participants.

The user interface: A surprising Toyota advantage

As with the exterior, when Toyota first showed the bZ4X concept a year ago, I was moderately repulsed by the interior design in concept form. I figured that this was going to be a disaster to use, on top of being just plain ugly.

Well, lo and behold – after a few hours of driving the bZ4X I now conclude that the interior’s user interface is one of the bZ4X’s main advantages. Here are the reasons:

  • The overall ease of use may be best in class. This is extremely important. In the last few years, there seems to be an industry disease among automakers to infest especially their all-electric cars with unusually weird interiors, using all sorts of new interface concepts that do nothing to improve upon the regular knobs and buttons we have come to learn over the last half-century. In the case of the Toyota bZ4X, the interface was easy to learn and use. What that means is that there was no need to take any time at all to “learn” anything.

  • One of the peculiarities is the combined steering wheel and the instrument cluster. In the bZ4X, the steering wheel “feels” smaller than a regular one – and it “seems” like it sits a bit lower, into your lap. Initially, that’s a little bit of an odd feel – but not necessarily a “bad” feel. The reason for this is that the instrument cluster sits above the steering wheel – not something that you view through the inside of the wheel. It’s almost like a heads-up display projecting onto the windscreen – but it’s as fixed of a display as any regular instrument cluster. It all sounds odd, and initially looks odd – but amazingly, it works! I was extremely surprised. I don’t think it has any advantage over a regular wheel-cluster setup, but I was relieved to experience no meaningful downside either.

The one downside with the interior I noticed is the lack of a glove compartment. Yes, it’s not just small – it’s completely missing. I see no good reason for this omission.

Two other surprising metrics where the Toyota bZ4X wins

Most compact SUV BEVs are relatively similar in most aspects. Many people would almost fail a blind test driving most of them. The “character” or “driving dynamics” of these vehicles are now all so good, and so similar, that it feels somewhat tortured to debate the minor differences.

There are, however, two somewhat surprising metrics where the Toyota bZ4X leads most or all of the competition:

  • Ground clearance.

  • Weight.

Let’s start with ground clearance:

ground clearance cm

inches

Toyota 4Runner

24.38

9.60

Toyota bZ4X

20.57

8.10

Volvo XC40

17.53

6.90

VW ID4

17.02

6.70

Tesla Model Y.

16.76

6.60

Hyundai IONIQ 5

15.49

6.10

Kia EV6

15.49

6.10

Ford Mustang Mach-E

14.48

5.70

Ford Mustang

14.48

5.70

Most of today’s “crossover-SUVs” at least sound like, or give the pretense of, having at least a modest off-road capability. The most commonly associated metric for that is ground clearance. As it turns out, almost none of the compact SUV BEV segment vehicles has ground clearance that is significantly better than the average sedan.

Take the Ford Mustang Mach-E, for example. At 14 cm ground clearance, it is the same as the regular Ford Mustang – a low-slung coupe! Yes, a two-door muscle car. Hardly what you should expect from a “crossover-SUV” of any kind.

At the other end of the realistic spectrum is Toyota’s own 4Runner, the ancient but perennially popular off-road worthy SUV. It has 24 cm worth of ground clearance. So between those two extremes – 14 cm for the Ford Mustang Mach-E so-called “crossover-SUV” and 24 cm for the Toyota 4Runner – where you would think the all-electric Toyota bZ4X lands?

Somewhat amazingly, at 21 cm. Yes, that’s not much more than an inch away from the very respectable off-road maven, Toyota 4Runner. This is a huge selling point for Toyota – just like it is for its nearly identical sister vehicle, the Subaru Solterra.

The The bZ4X weighs “only” between 4,266 and 4,464 lbs, depending on version and trim. This is heavy when compared to non-BEVs such as the aforementioned Toyota 4Runner. However, it is the lightest all-electric SUV in its class in AWD form:

curb weight lbs

max

VW ID4

4,568

4,927

Ford Mustang Mach-E

4,394

4,920

Volvo XC40

4,741

4,741

Hyundai IONIQ 5

4,200

4,662

Tesla Model Y.

4,555

4,555

Kia EV6

3,984

4,502

Toyota bZ4X

4,266

4,464

Data source: Company information

As you can see in the table above, the Toyota The bZ4X is almost 500 lbs lighter than the heaviest member of the competitive set. The Kia and Hyundai vehicles are lighter in non-AWD base form, but heavier in AWD form.

Sales results: On the path to 7,000 in the US for 2022

At the March 2022 US product introduction, Toyota said it was aiming to make 7,000 units available for the US market in 2022. In contrast, Subaru would make 6,500 available of its version, the Solterra.

US sales started in May 2022 and sales in Europe appear to have begun a few weeks later, in June. Here are the early results from the data that has been made available:

Toyota bZ4X

Norway

Netherlands

Sweden

Spain

USA

TOTAL

2022-6-

47

5

95

1

33

181

2022-5-

0

0

0

0

199

199

Data source: https://eu-evs.com/ and company reports

In other words, the numbers are tiny. There are of course other countries in Europe – from which I don’t yet have sales data on the bZ4X – plus Canada and Japan. As a result, these are not yet total global sales data, and we cannot assume that the sales numbers are equally poor everywhere. Still, I think we can say that sales are off to a slow start, and that for example the 13,500 units of combined Toyota + Subaru allocation of the sister vehicles to the US market are likely to be heavily back-end loaded closer to December 2022. , than July.

Beyond 2022: What’s next for Toyota’s electric cars

Over the next four years, expect Toyota to launch a portfolio of BEVs that resemble most other automakers. Basically, it will be an entry in almost every mainstream segment. For example, expect at least one SUV that’s smaller and at least one that’s larger than the initial bZ4X model. We already know about the Lexus version of the bZ4X, which should appear within months from now.

Certainly by 2026, Toyota will have so many BEVs in its showrooms that they will meet the needs and preferences of at least half of the intended customer base – except for the not-so-small issue of price. BEVs cost more to manufacture, and on an inflation-adjusted basis it’s not as if consumers suddenly will have that much more money to spend on a new vehicle. This challenge is as hard for Toyota as it is for all other automakers.

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