Toyota CEO Leans on Japan To Soften EV Push As it Recalls Only EV on Sale

The wheels are coming off of Toyota’s electrification push in its home market–in more ways than one.

byVictoria ScottJun 24, 2022 1:46 PM
Toyota CEO Leans on Japan To Soften EV Push As it Recalls Only EV on Sale
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Toyota has been very slow to develop electric vehicles and hasn't offered a mass-market, lithium-ion-battery vehicle until this year in the form of the joint-Subaru-developed Toyota BZ4X electric crossover. Japanese government officials—like many across the world—are increasingly eyeing an EV-only future, and Toyota CEO Akio Toyoda himself opposes Japan's electrification plans if it means an end to building hybrids, according to a government official who spoke to Reuters on Friday. This news came simultaneously with the announcement that 2,700 BZ4Xs (and 2,600 of its Subaru twin, the Solterra) will be recalled for the risk of wheels falling off during sharp turns, hampering its already slow launch to the electric-car market.

Japan's government has specifically eyed a ban by 2035 on new sales of ICE-powered cars, in line with the goals of the European Union and the state of California. Toyoda was already on the record opposing that potential ban and in 2020 told the Japanese Automobile Manufacturers Association (JAMA) that, “the current business model of the car industry is going to collapse” if legislators phased out gasoline cars too rapidly. Now, as Japan attempts to finalize the language of its 2035 climate goals and potentially ban anything with a combustion engine, Toyoda has put pressure directly on lawmakers to soften its stance and allow for hybrids to count toward future climate goals.

Akiri Amari, the Secretary-General of Japan's ruling Liberal Democratic Party, said that Toyoda came directly to him to change the language of the bill from "electric vehicles" to "so-called electric-powered vehicles." This change would allow for hybrids to count toward Japan's electrification targets. Amari further said: "If we don't make that clear, JAMA will push back with all its might," because the automakers' association simply "cannot endorse a government that rejects hybrids."

The newest version of the bill shows that the language has been updated from "electric vehicles" to "so-called electric vehicles."

At the same time as the language was changed, Toyota and Subaru both issued recalls for the BZ4X/Solterra platform, issuing a warning that more than 5,000 of the crossover EVs are at risk of wheels falling off under rapid braking or turning, as the hub bolts could fail. Toyota states the recall of the BZ4X will affect 260 U.S. buyers; Subaru's recall only affects dealers, as no customers have taken delivery of the Solterra yet.

The stakes for both Japan's future legislation and the BZ4X's success are huge for Toyota, as the company builds hybrids in massive numbers and the Prius remains the best-selling hybrid in America more than two decades after its inception, but the company still largely struggles to sell EVs. The full-electric BZ4X only has 7,000 units built in total for American buyers this year; the Prius, for comparison, sold more than that in just two months this year. On top of this, Toyota is nearly out of green-car tax credits meaning the BZ4X (and all future Toyota EVs sold stateside) will likely cost buyers significantly more going forward, making hybrids significantly more appealing. The company has a massive financial commitment to "electrification", but as we've reported before, that may come in the form of more hybrids, rather than EVs.