AD #3433 – Toyota Backtracks on Hybrid Strategy; China Faces EV Price War; Tesla Changes Build Strategy

October 24th, 2022 at 11:57am

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Listen to “AD #3433 – Toyota Backtracks on Hybrid Strategy; China Faces EV Price War; Tesla Changes Build Strategy” on Spreaker.

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Runtime: 9:41

0:08 China Faces EV Price War
1:19 Nissan Pushes Renault For Equality
2:36 Toyota Backtracks on Hybrid Strategy
4:14 AVs Burn Through Tons of Capital
5:09 Renault Uses OTA for After Sales Upgrades
5:58 Arrival Shifts Production from UK To U.S.
7:32 Tesla Changes Build Strategy
8:31 Continental’s Display Business Explodes

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34 Comments to “AD #3433 – Toyota Backtracks on Hybrid Strategy; China Faces EV Price War; Tesla Changes Build Strategy”

  1. rick Says:

    you heard seen on autoline daily, its not rocket science STOP! buying prices will come down.

  2. rick Says:

    close your wallets, let things cool off.

  3. Lambo2015 Says:

    75 Billion invested in AV tech and investors are getting impatient with their bad investment. Too bad! I say. We shouldnt release more before the technology is ready just so investors can get some returns. Yes, AV is a good 20 years out for a level 5 in anything more than select areas. There are huge hurdles to still be overcome, even in the states with good weather conditions. I’m not sure they have even begun to tackle the challenges with snow, fog , sleet, freezing rain, and salt covered roads where all the pavement blends in with the white lines.

    Not saying they should stop development but maybe investors were fed a little more optimism than reality.

  4. Kevin A Says:

    Sean, Any word on what is happening with the car assembly plants in the UK? Many of them were talking about closing now that the UK has left the EU. However, with the UK currency dropping, doesn’t it look more attractive as an assembly site?

  5. Albemarle Says:

    We all better rush out and buy that EV we so richly deserve before the price drops. Looks good on Tesla with their customer unfriendly pricing.

  6. Kit Gerhart Says:

    4 BMW is still building the Mini 3- and 5-door hatch and Clubman in the UK. I don’t know about their future plans.

  7. Wim van Acker Says:

    @4 the recent drop of the British Pound certainly lowered U.K. production cost for exported vehicles. Decisions on production footprint are made on longer term currency exchange rate trends, not on what is happening this year and next, though. If the decision has been made to close, the OEMs may decide to close a year or so later.

  8. Kit Gerhart Says:

    7 Wouldn’t part of the decision be based on issues, both tax and otherwise, of getting parts from the EU to the UK, and cars from the UK to the EU?

  9. Wim van Acker Says:

    @7 oh, yes, those and additional factors. Those are high-stakes decisions with a lot of work needed to have the highest probability of the best decision. And some luck, too, because as much work as is put in, not everything can be foreseen and predicted :-)

  10. merv Says:

    great show, fun way to kick off another week of autoline

  11. Bill Says:

    So Tesla is starting to behave more and more like a traditional OEM…

  12. Bill Says:

    So Tesla is starting to behave more and more like a traditional OEM…

  13. GM Veteran Says:

    Um, a 9% price drop or about $2,000 for Tesla in China? My 6th grade math skills say that would mean a Tesla there would cost about $22,000. That can’t be right!

  14. GM Veteran Says:

    2 – “Not saying they should stop development but maybe investors were fed a little more optimism than reality.”

    You got that right! I can’t recall a more overhyped technology where the development timeline was so badly exaggerated. However, there have been some very intelligent voices that have been telling people for nearly ten years that it will take much, much longer to get to Level 5 than companies were saying.

  15. GM Veteran Says:

    The Arrival announcement is so lame. It doesn’t cost appreciably more to outfit a plant in the UK than it does in the US. I think Sean is right. Its all about the incentives.

    By the way, I have been hearing about the six month build on their micro assembly plants for at least 3 years now. Another startup with a story that is much more talk than substance.

  16. Roger T Says:

    I’ve been in queue for a model Y which was scheduled to be delivered in Jan – Mar. It’s now predicting in the next few days. I went to a Tesla store to ask for a test drive and general questions, was very surprised how dismissive / rude the person was. Caused me to back out, I got a Volvo recharge instead. If my experience is happening to others, I would not be surprised Tesla sales will cool off soon. Competitive landscape and service of dealers are things that come to mind.

  17. Kit Gerhart Says:

    13 The price of the Model Y was reduced 9%, but that is 3855 US dollars drop, not 2000. The cheapest Model Y is now almost $40,000 US.

  18. Kit Gerhart Says:

    16 Interesting. I had a relatively good experience getting a test drive of a Model 3 about a year ago, and I told them up front that I wouldn’t be buying, since I don’t have home charging. They were reasonably pleasant, and I got a 30 minute “solo” test drive. This was in Merritt Island, FL. I don’t know if I could have test driven a Y, S, or X.

  19. Wim van Acker Says:

    @16 I drove a friend of mine from Detroit to Columbus, OH, to pick up his Model X. I was a bystander, but I thought my friend received mediocre service for picking up an expensive vehicle. They knew he came over from Detroit to pick it up and still the battery was half-full, so barely enough to make it to his home.

    It may not be too bad for TESLA: the dealerships of their competitors are also bad. We bought two Mach-e’s last year and have had “mixed experiences”, so to speak. My son’s Mach-e GT needed repair of the electrical system which has taken three weeks. When he asked for a loaner they told him they could give him a rental car. His budget was $35/day without insurance. Just for the fun of it he took home the Toyota Yaris they offered him. And drove the E 300 of his wife, who works from home. When he picked up his $80k vehicle he had to stop at the nearest charging station and got their with 3 miles of range left. The vehicle was pulling to the left but he could not make it back to the dealership. He needed to charge it first and work from his car. They tried to correct the pulling and it is still pulling. You can’t make this up. My son considers the dealers such amateurs that he just laughs about it. It is very sad, actually. And it would be a horror show if you have to be able to count on your vehicle for work.

    I have never understood why many car dealerships are so bad. In my personal experience the more expensive the car the worse the dealership was. My low point was buying a new S Class (clueless Sales “Manager”), while I had top-notch experiences when buying Chevrolet Trax, GMC Terrain and Buick Regal for my kids. My wife’s Lincoln purchase experiences were also from high quality sales persons.

  20. wmb Says:

    #19.) I’m sorry to hear that you have had such bad experiences from dealerships. I’ve purchased a number of vehicles, from different manufacturers and have only had a couple of bad experiences from dealerships. The thing that is most frustrating regarding dealerships, is that those from the legacy OEMs are privately owned and it’s only so much the automaker can do to try and “fix” them! While the issue that your son had with his vehicle (which seems like it could be rectify by a competent technician), only is only made 1000 times worst, because of the service that he was provided; which has nothing to do with the vehicle! Smh

  21. wmb Says:

    It’s pretty clear that Toyota has some major decisions to make. Yet, working with an existing ICE platform doesn’t necessarily have to be as bad as it seems! Car and Driver did a story, where it compared a EV Genesis G80, with the new EQE sedan. The BEV G80 was a manufacturer retrofit ICE platform, while as we know, the new EQE is a ground up platform! With the models that were used for the comparison, the retrofitted G80, in their opinion, bested the purpose built EQE on efficiency, range, power and subjective appearance. The biggest advantage the EQE has, as new platform, Mercedes has something to build on for the future. While the retrofitted G80 was probably as good as an EV could get, working from an architecture that was originally designed for Internal combustion vehicle and all the related ‘scar tissue’!
    So, the fact that Toyota may have to work around their current ICE platform, may not necessarily be a bad thing. The problem will be the amount of investment! For, it will be expensive to retrofit their existing hardware, while at the same time, building a clean sheet BEV platform that will cover multiple vehicle classes, sizes, purposes and brands! And that’s just the hardware! The software is a whole different side to this, plus work AV side to this proposition. For the company that did the most to introduced electrification into the modern vehicle, for them to be this far behind the EV revolution is it head scratching.

  22. Wim van Acker Says:

    @20 Well, we have had many good experiences. Just not with the “high-end” vehicles. Having to explain an Audi salesperson that blue A8′s exist and looking up the color code on his computer is frustrating for me. I just look around the office to see if I am filmed by the “Candid Camera” team which is waiting for me to lose my patience.

    I especially respected the Terrain/Trax/Regal salespersons for getting my kids enthusiastic about the features of fairly simple vehicles and make them proud to get one. And as I said, my wife’s Lincolns were not luxury vehicles, but the dealership made it a luxury experience.

    My friend sold his company and drove to the Ferrari dealership the next day. He owned a Maserati at that time, so he was not parking a Yaris in front of the dealership. The Ferrari “Sales” person told my friend, who was thinking this would become the best day of his life, to stay away from the vehicles and was condescending to him. My friend had dreamt for decades about being able to go to a Ferrari dealership one day and just buy whatever he wanted. His dream was shattered, he capitulated and left. He continued to drive his eight-year-old Quattroporte.

  23. Sean Wagner Says:

    Brexit has been very hard on smaller businesses that aren’t highly specialized and add a lot of value to a product.

    Some have relocated to continental Europe, some have closed shop, and many are struggling to compete simply because timely access is now impeded by forms and regulations, whereas competitors from the EU can ignore internal borders.

  24. Kit Gerhart Says:

    19 That is crazy with the S-Class. That is about the ultimate luxury car, short of a Rolls-Royce or Bentley, and you’d think the dealer would have at least one person properly prepared to deal with the customer.

    Regarding your son’s Mach-Es, I’ve had four Toyotas, and one thing that helps the mediocre dealers, is that the build quality of the cars is good. They piss me off when getting my “free” oil changes, when they leave greasy hand prints and foot scuffs in the car which I take to them with an immaculate interior, but there is no pulling in the steering, because they get that kind of stuff right when they build the car. It kind of makes up for some sloppiness at the dealer, if the car, basically, works as it should.

  25. Kit Gerhart Says:

    22 It seems that Ferrari are notoriously jerks. They even have mega-wealthy, mega-car nut Jay Leno to where he will never buy a Ferrari, because they require that you buy a few “lesser” cars before you are allowed to buy the more “desirable” ones.

  26. Kit Gerhart Says:

    21 When Toyota wants to make a lot of EVs, they can, if they have the battery suppliers lined up. The software for EV powertrains is very, very simple, technically, compared to the excellent hybrids Toyota now sells.

  27. ChuckGrenci Says:

    13,17 Using the yuan figures stated in the article, by my calculations the discounts for Model 3 are right around 5% and the Model Y at 8.8%.

  28. Kit Gerhart Says:

    27 Yeah, that’s about what I found. I got the current dollar price of the Y by googling “288,900 yuan to USD.”

  29. Kit Gerhart Says:

    Interestingly, the exchange rate between the yuan and USD is not a lot different from when I was in China 28 years ago.

  30. Lambo2015 Says:

    Typical design to launch time for a vehicle now is between 3 and 4 years. So if Toyota throws resources at it they are likely only 3 years away from being able to launch a couple BEV designed from the ground up. Plenty enough time for this 2035 deadline. They gambled that hybrids would play a bigger part as they should. But the folks pushing the regulations want pure BEV’s. Which to me just means for those people who refuse to get an Electric car or live/work where a BEV doesnt meet their needs. They’ll just hold onto the ICE vehicle for as long as they can. Where maybe a hybrid would have met their needs they’ll stick with gas alone.
    I wouldnt worry too much about Toyota. They’ll have the vehicles they need to support the demand. IMO

  31. Kit Gerhart Says:

    The linked Reuters article about Toyota didn’t really say that the company was backing off of their hybrid strategy, but that they were changing their way of building EVs. In fact, the article said “hybrid” only once, and not in regard to backing off from them. Hybrids will continue to be an increasing percentage of Toyotas that burn gas.

  32. Lambo2015 Says:

    25 When I was deciding to build a kit car, there were many kits on the market. Now I do like the Ferrari designs, I mean I grew up watching “Magnum PI”. So who didnt? But I’ve always loved the Lamborghini’s and “Cannonball Run” was another great inspiration. I have done the hotrod thing and built a 36 Ford coupe and a 35 Chevy Sedan. I have family with a few Cobra kits and I wanted something unique. As I was reading the background behind Lamborghini I knew this was what I was after. The arrogance that surrounds Ferrari just always rubbed me the wrong way. I mean yeah you build beautiful fast cars but when I can take a 1970 Nova and dump 10K into a SBC and gap your Ferrari its not that special. So speed aside it was down to the body design and yeah thats always in the eye of the beholder. I just found Lamborghini’s to be more eye catching. Plus I just didnt want to be associated with the snob mentality that comes with a Ferrari. I guess I root for the underdog.

    If you dont already know the story here is a short summary of their rivalry.

  33. Lambo2015 Says:

    31 As it should. I think many know that BEV’s will just not work for everyone in every application and a hybrid is a great middle ground. I wasnt trying to say Toyota would back off Hybrids but I think they were banking on them being a much bigger part of going electric. Which still may happen. But for now it just seems that everyone thinks we are ready to jump from gas to full BEV is a single bound. I dont think most will go that route and before BEV ever see 50% of the market I bet the other 50% will already be Hybrids. These regulations and banning of ICE vehicles will be pushed back and I just dont see Toyota being in a bad position.

  34. Kit Gerhart Says:

    32 Interesting. Lamborghini’s car business is newer than I realized, with the first cars sold in 1964. They still have some of the best true exotics, and the almost ultimate VW Touareg. Bentley probably has the ultimate Touareg. I guess Lamborghini plans to make their sports cars hybrid, and then electric by about 2030.