Toyota BZ4X Sales Will Show If EV Delay Was Sensible, Or A Stumble

Apr 05, 2024

Toyota bZ4X SUV, the first mass-produced electric vehicle from Toyota.

The perception global leader Toyota has missed the boat on electric vehicles was always a bit of a stretch, and as demand accelerates away from early adopters it will likely have enough sedans and SUVs to jostle with the leaders in Europe by the end of the decade.

There may be a bonus too, as political support underpinning EU rules imposing electric cars on Europeans by 2035 wilts. The ban on selling new internal combustion engine (ICE) vehicles may stumble because battery electric vehicles remain unaffordable to average wage earners. This would be a gift to Toyota’s strong hybrid lineup.

And given the current inadequate performance of electric cars – they are too expensive, range challenged, and other negatives – there’s still time for Toyota to end up as a battery electric vehicle (BEV) leading light.

Green groups, and institutional investors adhering to ESG (Environmental, Social and Governance) criteria have criticised Toyota for being slow to embrace BEVs. Its first electric model, the bZ4X (which I’ve just been driving), is certainly late.

Toyota has a big lead in electrification though with hybrids. This week, Toyota reported sales of hybrids rose 38% to account for just under a third of its 4.9 million global vehicle sales in the first half of 2023. Toyota plans to sell 202,000 BEVs globally this year, 1.5 million in 2026 and 3.5 million in 2030. The slow BEV start led to the criticism that Toyota had underestimated the EV revolution.

Toyota bZ4X.

Some argue Toyota’s attitude was a rare example of a corporation deflecting current hysteria and relying on its engineering expertise and knowledge of markets and consumers to predict long-term sales. Its expertise in hybrids will look even more valuable if the EU relents on its 2035 ban. The EU ban on the sale of new gasoline and diesel-powered sedans and SUVs from 2035 includes hybrids and plug-in hybrids.

Some EU member states recently forced a change in the rules to allow ICE vehicles powered by e-fuels after 2035. Public opinion across Europe is starting to question the move to effectively force citizens to drive BEVs with regulations that relentlessly tighten between now and 2035. Britain decided a couple of years ago to bring forward this date to 2030, but political opposition is growing on the grounds BEVs are too expensive, can’t match the all-round utility provided by ICE cars, and the charging infrastructure is inadequate.

Investor reluctance was addressed in a recent report from Moody’s Investors Service’s Japanese subsidiary in which it affirmed its “stable” outlook for Toyota, but pointed to possible unsettling factors like increasing competition, uncertain emissions regulation, large investments required for possible alternative fuels and autonomous driving, and BEVs.

“The company has been a pioneer in hybrids, but its profile will benefit further if it establishes a track record of expanding its battery electric vehicle lineup profitably in order to maintain its competitive strength,” Moody’s Japan said in a report.

Experts I’ve talked to reckon Toyota is on the right track.

Felipe Munoz, global automotive analyst at JATO Dynamics, said Toyota’s BEV output will at least be competitive, and in the U.S. too.

“I think that Toyota will sit in a comfortable position in 2030 in both Europe and USA in terms of EV market share. It won’t lead the markets, but it will play a major role once these plans become a reality,” Munoz said.

2006 Toyota Prius Hybrid. The Prius has led Toyota's dominance in hybrids. Artist: Unknown. (Photo ... [+] by National Motor Museum/Heritage Images/Getty Images)

“At the end of the day (Toyota is) suggesting that they will solve the current problems EVs have: performance and price. 25 years of experience dealing with electric powertrains and hybrid technology are not a minor thing. They knew how to do it long before the rest of peers and even Tesla joined the EV boom,” Munoz said.

“In an eventual competitive electric Toyota, the brand’s market share in Europe within this market could be around 15-30%,” according to Munoz.

S&P Global Mobility autos analyst Ian Fletcher said Toyota has plans to catch up and offer new BEVs across most of the required range in Europe, except the cheapest entry-level point.

“I think Toyota is probably well positioned in Europe as the regulatory environment puts greater emphasis on battery electric being the future. Yes, Toyota is behind the curve in terms of the availability of these types of products currently but there appears to be plenty on the way. In addition, many of their current customers are likely to be somewhat conservative with regards to their choices but hybrids are providing a gateway,” Fletcher said.

“I guess the only fly in the ointment is the possibility of zero-emission vehicle mandates in some markets (notably the U.K.) which would be difficult to achieve with its current range, despite the efficiency of and the relatively low emissions of its line-up. On the flipside, any delay to the roll-out of ICE bans would be entirely beneficial to it,” according to Fletcher.

Professor Stefan Bratzel, director of Germany's Center of Automotive Management, said Toyota was a reluctant convert to BEVs.

“They didn’t always believe in battery electric mobility and they’ve had to jump on the train. Toyota doesn’t have a great offering now, but the electric race is long-term. We see that Toyota has a lot of competencies in batteries and they have a lot of research going on,” Bratzel said.

The holy grail of battery development is expected to be solid-state technology. Toyota said recently current batteries are too big, too heavy and expensive. It plans to offer a solid-state battery-powered vehicle by 2027 at the earliest, which would halve the size, cost and weight of batteries. That's ambitious, as 2030 had previously been thought of as a hard target date to meet. Research shows solid-state technology has stumbled over moving the principle into mass production.

Toyota has also said it plans to introduce a battery with 750 miles of range which would take 10 minutes to charge. No launch date accompanies this claim.

The California Air Resources Board, not known for timidity in designing regulation, has decided that its proposed ban on new ICE car sales in 2035 will allow some plug-in hybrids (PHEVs) because a total switch to BEVs would harm the poor in remote, rural areas.

Bratzel agreed there was increasing pressure for the EU to dilute some of its CO2 emissions regulations.

“It’s an open question. I’m not sure whether 2035 will stay in place. The EU has shifted a bit (e-fuels relaxation). It’s hard to predict the technology by then. It depends on how much battery costs can be reduced, and the development of charging infrastructure. These two are decisive for 2035, and we’ll see by the end of this decade if they can hold to targets,” Bratzel said.

JATO Dynamics’ Munoz said far from being left behind in the eventual global market for BEVs, Toyota could be a big winner. Currently, BEVs fail consumers in many aspects, including price and range.

“If Toyota arrives late but with the right solution, it can shake the market as Tesla did 5 years ago, but for even better. The key element here is Toyota’s real global presence, its correct understanding of the different consumers around the world (not only in USA, Europe and China), and its know-how with the hybrid technology. Toyota has the potential to improve the current BEV, and if you add its strong presence worldwide, then you have the formula to shake the industry,” Munoz said.

The Toyota bZ4X is the first in a new series of bZ vehicles.

Power – electric motor 198 hp

Torque – 266 Nm

Gearbox – automatic

Battery – Lithium-ion 71.4 kWh

Claimed battery range – 312 miles (WLTP)

WintonsWorld test range capacity – average of 8 charges – 243 miles

Highway cruising range estimate – 134 miles

Highway cruising penalty – 45%

Drive – front wheels

Acceleration – 0-60 mph 7.3 seconds

Top speed – 100 mph

Price – £49,510 ($63,650) in UK, after tax