Better, faster, cheaper is new Toyota mantra for ‘revolutionary’ product as new North American tech boss targets a 50 percent efficiency boost in operations.
September 09, 2023 12:00 AM
DETROIT — When the Toyota Prius hybrid compact car debuted some 25 years ago, its breakthrough fuel-sipping gasoline-electric drivetrain shattered industry norms.
In doing so, the Prius also proved that Toyota Motor Corp., a company renowned for safe and reliable, but conservative, cars could throw down the gauntlet with revolutionary new technology.
Now, Toyota wants to rekindle that pioneering spirit by overhauling its R&D operations to be better, faster and cheaper in a cultural shift to unleash its engineering corps’ creative juices.
The goal is shedding Toyota’s traditional risk-averse mindset to deliver vehicles that are revolutionary, not just evolutionary, to compete in the ultracompetitive age of new mobility.
Leading the charge in North America is newly appointed Chief Technology Officer Mike Sweers, the truck-crazy Toyota veteran who took the helm of the region’s R&D nerve center on July 3.
“We’re not changing fast enough. Toyota’s design is evolutionary, not revolutionary,” Sweers told Automotive News in a Sept. 5 interview at Toyota’s main technical facility just outside Detroit.
“Can we survive if we don’t think differently?” he said.
Sweers cites the Prius as a prime example of the right approach to risk: “We have to be willing to fail at something.” And under his leadership, Sweers promises a rebirth of that trailblazing spirit.
“We’re going to have products coming out that are revolutionary,” he said.
The 60-year-old goateed, cowboy-boot wearing truck wrangler, renowned for leading development of the Toyota Tundra pickup and other big body-on-frame trucks, now spearheads the carmaker’s biggest technical center outside Japan in the company’s most important market.
His mission is to radically improve the efficiency of R&D operations to do more of everything, from hybrids and battery electrics to hydrogen fuel cell vehicles and autonomous cars — and do so without breaking the bank in an era of spiraling costs for cutting-edge technology.
At Toyota Motor North America Research and Development, that means boosting the efficiency of work by 20 to 50 percent, Sweers said. While Toyota has internal targets, Sweers declined to offer specific timelines and cost goals, saying everything is up for review.
“We have to think differently. We have to think out of the box,” Sweers said. “And how do we do that without spending everything we’ve got and still be profitable?”
Toyota is hardly capping outlays and investment. In October, for example, it will break ground on a $50 million battery testing facility at its technical center outside Detroit.
But the intent is to be faster to market with more innovative and cheaper products.
The orders come straight from Chairman Akio Toyoda, Sweers said.
“He’s not expecting change. He’s demanding change,” Sweers said.
The challenge from rivals such as Tesla and Chinese giant BYD lit a fire under Toyota’s top brass, spotlighting the need to rethink vehicle design from scratch.
The new competitors’ cost-effective engineering and production techniques even forced an emergency overhaul of Toyota’s own EV plans. After taking office in April, CEO Koji Sato said Toyota will develop an EV platform to underpin vehicles from 2026. They will be manufactured with a host of new technologies inspired by Tesla, such as the use of giga casting.
Meanwhile, improving the business in North America, Toyota’s traditional cash cow, is seen as crucial to generating the money needed for the mighty investment into these new technologies.
Even as the Japanese juggernaut nearly doubled its operating profit in the latest quarter, lagging performance in the North American market undermined that equation. North American operating margin languished at 3 percent in the quarter, below other regions, such as 14 percent in Japan and 6.3 percent in Europe.
“We are not satisfied with an operating profit margin of 3 percent in North America, and we need to raise this more,” a Toyota official said at the time. “As we will be making battery-related investments and producing BEVs there, we will need to prepare for such spending from now. And thus, we will need cash. Our operating profit margin is not at a sufficient level.”
Change in product development will come partly through new technologies.
Advances in predictive engineering that use artificial intelligence will allow quicker and more accurate design work that better models the real-world output without having to build physical prototypes. Leveraging big data from the millions of Toyota vehicles on the road will also help.
But fostering an environment for innovation is also an important step.
Two years ago, Toyota began allocating budget to incentivize innovation in advanced technology. Under this system, engineers with fresh ideas can compete to win funding to create proofs of concept.
One result of that initiative was the new seating in the redesigned 2024 Toyota Tacoma pickup.
Traditional seating typically tries to immobilize the driver by planting the entire body in a cocoon — think of a highly bolstered race car cockpit. But the Tacoma’s IsoDynamic Performance Seat uses an air-over-oil shock absorber system that enables vertical and lateral seat movement at the same time to dampen body movement and stabilize the head.
“That seat violates every seating rule that was ever made,” Sweers said. “The seat evolved from this crazy nonmanufactured concept. But when you realize the dampening characteristics of the seat, I literally can take a vehicle 20 miles an hour faster off road than I could before.”
Toyota’s “hitchless towing” concept is another outgrowth of the new mindset. It allows one vehicle to follow another as a trailer would but with no physical connection, thanks to autonomous driving technology. Toyota is exploring its application in vehicle platooning.
“It’s not just about hitchless towing,” Toyota North America Executive Vice President Jack Hollis said when the idea was publicized last September. “It’s about the thinking around hitchless towing and how we’re innovating to stay ahead of the industry.”
Future focus areas for North American R&D will be vehicle software, electrified drivetrains, lightweighting technologies and aerodynamics, Sweers said. His unit, for instance, has offered training in software coding to all its engineers to support the transition to the digital era.
Sweers acknowledges that cultural shifts come slow at big companies such as Toyota. As the automaker rapidly expanded in recent years, its engineers got bogged down in red tape and by the strictures of designing a full line of vehicles that can serve markets around the globe.
Freeing them to stretch their wings is a next step into the new era.
“As engineers, our job is to solve problems,” Sweers says. “We want to let engineers do their job.”
