In the two decades since it released the revolutionary hybrid Prius, Toyota has, at best, shown interest in electric cars. And yet, to this day, the company hasn't made any EV headway. In fact, the company hasn't really discussed their plans for the future of electric cars in the brand. In an interview with CNBC this week, Toyota chairman Takeshi Uchiyamada discussed just why they haven't taken the leap, and acknowledged it's something they're already working to address.
Though they command just a 1% market share in the US, electric cars are enjoying rising popularity. With manufacturers like Tesla and Volkswagen preparing to duke it out to decide who becomes largest in the market, Toyota—the once reigning king of the consumer automobile—sits in the background and waits.
Electrification is inevitable. And the pace of electrification exceeded what Toyota estimates. In 2010, Toyota decided to buy a 3% stake of Tesla for $50 million. This investment helped fund the launch of the Model S in 2012. Eventually, the business relationship between Tesla and Toyota fizzled, reportedly due to conflicts of the high risk approach that Tesla took towards its business ventures. Toyota sold off the remainder of its 2.34 million stocks in 2016, valued at roughly $481 million.
While companies like Volvo are committing to 100% electrification fleet-wide, Toyota is hesitant to heavily invest in EVs. Uchiyamada says that this is because the technology for a good electric car just isn't there. In his mind, a good electric car isn't just about the driving experience, but rather about convenience. Long range cars should be able to travel far and charge quickly, something which they're not currently able to do. Eventually, the consumer will realize this and begin to turn their nose at the long charging times, forcing a market reversal.
Toyota is focusing on battery technology in order to prevent this from happening. They have formed a division which is researching solid state battery technology, however the company does not have a timeline in which they expect a breakthrough to be made. Unfortunately, the chairman doesn't believe that it's as simple as researching and creating a new battery. He expects several breakthroughs are needed in order to create a better battery, and manufacturers feel that their hands are being forced in the opposite direction.
Though regulation is a necessary part in any new technology, Toyota and many manufacturers feel that some are unreasonable. China, for example, has already delayed a mandate requiring that at least 8% of cars produced by manufacturers must be electrified by 2019. Uchiyamada believes that this is hurting consumers and businesses alike, as automakers must comply or fear beingg forced out of the market. The result is less than ideal battery technology for the consumer, and a bad reputation for EVs until these specifics are sorted out.
Hopefully, Toyota will begin to produce more electric cars in the future. But this will take a compromise of technological innovation, governmental regulation, and setting aside their typical conservative business practices in order to take a calculated risk. If the stars align, maybe Toyota will build an interesting electric car. Maybe.