Toyota may share Tesla-fighting next-gen EV tech with partners

Toyota says the battery costs in its bZ4X crossover make acheiving a profitable business difficult.

TOKYO — Toyota’s radical electric vehicle overhaul will deliver a plethora of knock-on benefits beyond the next-generation of Tesla-fighting Toyotas that start rolling off the line from 2026.

Breakthrough manufacturing processes will be applied to factories making more conventional vehicles as well. Meanwhile, the new all-electric platform being engineered from scratch may even be shared with partner automakers, helping Toyota expand scale and further slash costs.

All of Toyota’s global operations will cash in on the EV shift, not just its nascent EV business.

Top brass at the world’s biggest automaker outlined the multiplier effects on Tuesday in the latest briefing on their plan jump ahead in the global electric vehicle race in just a few short years.

The road map, pioneered by new CEO Koji Sato, calls for new engineering of Toyota’s products as well as its factories. On the manufacturing side, Toyota plans to halve the number of production processes, halve the amount of plant investment and halve the amount of production lead time.

In product, Toyota will roll out a new EV platform, a new software operating system and a wave of advanced batteries that could deliver EV driving ranges up to 1,500 kilometers (930 miles).

Those more competitive next-generation EVs will hit the market in 2026. And by 2030, Toyota expects to sell 3.5 million EVs annually, including 1.7 million riding on this newly engineered EV architecture created inside Toyota’s so-called BEV Factory business unit.

Toyota expects wider gains by using the new toolbox of technologies across the company.

“Those technologies should not be applied only to battery electric vehicles,” BEV Factory President Takero Kato said. “It’s about increasing our quality and flexibility. We will be able to streamline all our manufacturing and production activities through this activity.”

New techniques such as giga casting and Toyota’s proposed self-propelled production, in which cars will drive themselves through assembly plants without fixed lines, can migrate to non-EV factories, executives said. So will the use digital twin technology that will allow Toyota to speed the creation, testing and verification of new line designs by creating a virtual-world doppelganger.

“The manufacturing methods themselves are new,” Chief Technology Officer Hiroko Nakajima said. “We have to prioritize efficient manufacturing.”

These new approaches will also reduce Toyota’s reliance on human labor.

That can improve factory efficiency, but it will also help one of Japan’s biggest employers cope with an impending labor shortage as the population of Japan ages and shrinks, said Sadahito Kondo, director of Toyota’s production engineering development center.

“Redundant workers will be reassigned to higher value jobs,” Kondo said.

The revamped production techniques will be key to helping Toyota cut costs on its next-generation EVs. The cars coming out from 2025 will be newly engineered from the road up and chasing fatter margins on hyper-efficient manufacturing and new revenue streams from services.

“Battery costs are still high, so it is difficult to make a profitable business,” Kato said of Toyota’s current line of bZ-badged electric vehicles, as exemplified by the bZ4X all-electric crossover.

Toyota may further plump volume and margins by sharing the new EV technologies with friends.

The carmaker helms an alliance of carmakers interwoven by cross-shareholdings. Under its umbrella is Subaru, Mazda, Suzuki and Daihatsu, as well as truck makers Hino and Isuzu.

Tally their global sales, and they form a formidable 16.3-million-unit Japanese juggernaut.

In the fiscal year ended March 31, for instance, Toyota – including Daihatsu and Hino – notched retail volume of 10.56 million vehicles worldwide. Subaru sold 852,000, Mazda moved 1.11 million. Suzuki chipped in another 3 million, and Isuzu rounded out the pack with 771,000 trucks.

Toyota is already spreading its costs and volume with Subaru. The partners already collaborated on the bZ4X, which is rebadged and sold as the Subaru Solterra. Toyota is already committed to providing its hybrid drivetrains to a lineup of next-generation hybrids planned by Subaru.

CTO Nakajima wants to expand such mutual supply tieups. “If we become confident in our ideas,” he said, “we would like to open the technologies if it will help others achieve carbon neutrality.”