AD #3541 – Toyota’s New EV Master Plan; Walmart Opens EV Charging Network; Tesla Cuts Prices Yet Again
April 7th, 2023 at 11:47am
Listen to “AD #3541 – Toyota’s New EV Master Plan; Walmart Opens EV Charging Network; Tesla Cuts Prices Yet Again” on Spreaker.
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Runtime:10:03
0:08 Tesla Cuts Prices Yet Again
0:58 Toyota’s New EV Master Plan
3:35 EV Leasing Surges in U.S.
4:47 South Korea Subsidizes U.S. Battery Plants
5:14 Tesla Replaces Mercedes As Most Valuable Car Brand
6:38 Walmart Opens EV Charging Network
7:20 Driving Impressions: Toyota Corolla Cross Hybrid
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TESLA CUTS PRICES YET AGAIN
Tesla just cut the prices of its cars, again. This is the fifth price cut since the beginning of the year. Analysts were expecting Tesla to report strong sales in the first quarter thanks to the prior price cuts, but sales only rose 4%. That has us wondering if its sales would have gone down if Tesla did not cut prices. This time around it cut the price of the Model 3 by $1,000, the Model Y by $2,000 and the S and X by five grand. Reuters reports that analysts are concerned that all these price cuts are going to hurt the company’s profit margins, which are the best in the industry. And when Tesla releases its first quarter earnings later this month we’ll know if that’s the case.
TOYOTA’S NEW EV MASTER PLAN
As we reported yesterday, Toyota is going to make a major pivot to EVs under its brand-new CEO, Koji Sato. And now we have a better idea of what that entails. Toyota is going to release 10 new BEVs by 2026, and it expects sales of 1.5 million cars a year by then. These next-gen vehicles will ride on a new architecture, not eTNGA, that will cut the number of build processes in half and will double driving range thanks to using batteries with “far greater efficiency.” Two of its new EVs launch in China next year, an electric pickup and a small EV will go into emerging markets and Toyota will start local production of an all-electric 3-row SUV in the U.S. in 2025. That model will feature batteries from a new $2.5 billion facility it’s building in North Carolina. It’s also taking a unique approach to plug-in hybrids. At a time when PHEVs are getting blasted for polluting more than environmental organizations thought they would and reports of low plug-in rates by owners, Toyota is doubling down on the technology. It says it wants to increase driving range beyond 200 kilometers or 124 miles and reposition PHEVs as “the practical BEV” and develop them “as another BEV option.” This is part of its mobility for all strategy, which still includes hybrid vehicle development and fuel cells, mainly used in commercial applications. And like all automakers, Toyota says it will build more intelligent cars that can upgrade features over time, like safety technology, multimedia and vehicle performance.
EV LEASING SURGES IN U.S.
With stricter rules for EV tax credits going into effect later this month, fewer vehicles will qualify for incentives. But once those restrictions go into place, EV leases are expected to surge. To earn the full $7,500 credit, minerals for EV batteries must come from the U.S. or free trade partners and the batteries must be built in North America. But commercial electric vehicles don’t have any of those requirements to get the full incentive and the U.S. Treasury Department ruled that the commercial credit applies to any EV that is leased. And automakers are taking advantage of that loophole. According to Edmunds, before the rule went into effect, leases accounted for 10% of all dealer transactions involving EVs in December. That increased to 16% in January, rose to 25% in February and jumped to 34% in March. And once the new rules go into effect on April 18th, analysts expect that number to keep on growing.
SOUTH KOREA SUBSIDIZES U.S. BATTERY PLANTS
But here’s a surprising development caused by those stricter Inflation Reduction Act rules. South Korea announced it will subsidize Korean battery makers to build plants in the United States. It will provide over $5 billion in financing over the next five years to offer lower lending rates and insurance premiums as well as provide more loans and tax credits.
TESLA REPLACES MERCEDES AS MOST VALUABLE CAR BRAND
Tesla is now the most valuable automobile brand in the world, according to Brand Finance. It looked at things like revenue, brand strength and importance of brand to purchasing decisions to come up with its list. And with a value of $66.2 billion Tesla ranks number 1. That’s more than 5-times more than it was worth before the pandemic started and two positions higher than it was last year. It beat out Mercedes and Toyota, in that order, to take the top spot. A couple of other interesting takeaways are two Chinese brands made the top 25. BYD ranked #12, up from #19 last year, and Geely came in at #22, up from #25.
WALMART OPENS EV CHARGING NETWORK
More companies are starting to open their own EV charging networks. Tesla obviously has its Supercharger network. Mercedes says it’s going to open its own in major markets. Hyundai is considering one for North America. And now Walmart says it’s going to open its own charging network. It has more than 5,000 Walmart and Sam’s Club stores in the U.S. and plans to set up its own charging stations by the end of the decade. It currently operates a network of 1,300 chargers at select stores in a deal with Electrify America. However, it’s unclear if it’s going to partner with a charging provider for this new network.
DRIVING IMPRESSIONS: TOYOTA COROLLA CROSS HYBRID
Yesterday we provided you with John’s driving impressions of the new Toyota Prius Prime, the plug-in hybrid version. Today, here’s what he thinks about the new hybrid version of the Toyota Corolla Cross.
First, a little background on the car itself. It’s a 4-door, 5-passenger CUV that starts at just over $29,000 for the base S model and walks up to $32,400 for the top line XSE, which is a very affordable price in today’s market. But you can also add up to $3,600 in options including a premium sound system, a two-tone roof, adaptive headlights and a convenience package. All wheel drive is standard, it has 196 horsepower under the hood and it is rated at 42 miles to the gallon, which is excellent for an all-wheel drive vehicle.
It has a very good driver position with great visibility all the way around. The gauges are very large and easy to read and the driver’s seat is quite comfortable. The rear seat offers good head room but not a lot of thigh support. And getting in and out of the rear seat involves a bit of a lift-and-twist movement because the door well area for your feet is rather small. Acceleration is adequate, but as is often the case with continuously variable transmissions, there is a noticeable moaning from the engine as you accelerate. And you can feel a bit of vibration in the steering wheel in mid-to-full throttle acceleration. Toyota claims it will deliver a 0 to 60 time of 8 seconds which is a rate that should satisfy most car enthusiasts. Toyota says that makes this a fun car to drive. We say this is a very competent family hauler with excellent fuel economy that has a bit of pep to it.
But that brings us to the end of today’s show. Thanks for joining us and I hope you have a great weekend.
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Comments (20)
April 7th, 2023 at 12:14 pm
I suppose pricing at Tesla was what the market could bear; but in hindsight, it sure looks like they were ‘way’ overpriced to begin with.
With so many EV Toyotas’ in the pipeline, and with their proposed introduction dates, it appears that Toyota hadn’t had their “head in the sand” as much as earlier reported.
April 7th, 2023 at 12:16 pm
If the new Toyota plug-in hybrids are like the current RAV4 plug-in, they will get close to the mpg of the regular hybrid, even if not plugged in. Many PHEVs get little, if any better mpg on gas than non-hybrids, so are kind of a disaster if never plugged in. The Wrangler 4xe actually gets worse mileage than the non-hybrid. If you have one of those, you really need to plug it in regularly.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=45009&id=44984&id=44932&id=44911
April 7th, 2023 at 12:22 pm
As I travel, I hate the price variability for hotel rooms, rental cars, cruise cabins, and plane seats/luggage. Consequently, I can imagine Tesla owners aren’t happy that they paid more than those buyers who waited.
April 7th, 2023 at 12:22 pm
The Corolla Cross looks to be a replacement for the Matrix. Matrix customers aren’t looking for excitement, just awd in a small economical wagon.
April 7th, 2023 at 12:24 pm
3 And they paid a lot more, not just a little more. I haven’t heard that they plan to give money back like GM did with people who bought Bolts before the big price drop.
April 7th, 2023 at 12:27 pm
4 I don’t understand the mandatory 4wd on the Corolla Cross and RAV4 hybrids. It just adds cost and complexity, and few people need it. Luckily, I could get an FWD Highlander hybrid, and you can get FWD Siennas. Siennas of any type seem hard to find, though.
April 7th, 2023 at 12:38 pm
I don’t like it either when FWD is not a option on vehicles that have AWD.My 2019 Cherokee is FWD but I install snow tires in the winter.The Cherokee is going away but the new Dodge Hornet which is a similar vehicle doesn’t offer FWD.
April 7th, 2023 at 12:40 pm
Someone sent this to me this morning. Is this true??
Vehicle Fun Facts:
According to nbcnews.com, Volkswagen sold more sausages in 2015 than it did vehicles. That’s right, in 1973, Volkswagen invented its own sausage called “Volkswagen Currywurst.” The sausages are made within the car manufacturing plant and the sausage package reads “genuine Volkswagen part.” In 2015, VW sold 7.2 million sausages, compared to the company selling 5.82 million cars. VW now also offers a vegetarian sausage option.
April 7th, 2023 at 12:47 pm
8 I wasn’t aware of the 1973 sausages, and I had a Beetle around that time. Maybe the sausages were sold only in Germany.
April 7th, 2023 at 12:50 pm
God Bless. Have a Blessed Easter
April 7th, 2023 at 1:04 pm
Deloitte recently did a study where they found that 59% of Americans don’t want an EV. Tesla sales were increasing by about 30% per quarter, but for Q1 this year they only went up by 4%. And that was with a big price reduction. Now we see they are dropping prices again and their inventory levels are growing. Rivin and Lucid say they have a backlog of orders, but their inventory is growing. Lithium prices have recently dropped somewhat, which would seem to a good thing, but if demand was outstripping supply the prices should stay high. Then add in high interest rates, job layoffs, and the pending recession.
It looks like to me that most of the people who wanted an EV or want to be green already have an EV and market is hitting an equilibrium for them.
April 7th, 2023 at 2:21 pm
11 A lot of Americans just don’t know anything about EVs, and don’t realize they can be an ideal commuter vehicle for a lot of multi-vehicle households.
It seems that higher, but still low interest rates aren’t slowing people down much from buying cars. As far as Tesla, they still had about 2/3 EV market share for 2022 in the U.S., but there is more good competition emerging. Also, I truly think the “twitter factor” and related things is hurting Tesla, at least a little.
April 7th, 2023 at 3:12 pm
@12 – I agree an EV can be a great local errand mobile if you have a convenient place to plug in. It hasn’t turned out that way for an older friend. Sadly, his personal mobility is declining to the point where he can no longer maneuver in/out of his small garage with a tight driveway. His EV is parked near the apron of the driveway… too far from the garage plug. “For sale – one EV. Great vehicle if you have a place to plug-in.”
April 7th, 2023 at 3:18 pm
13 Yeah, you need charging in the place you would normally park. Otherwise, it’s not going to be very convenient.
April 7th, 2023 at 3:19 pm
@13 “local errand mobile”: sure, and you can easily drive 200 miles each and every days for your errands.
April 7th, 2023 at 3:25 pm
@15 and therefore it may even be more than an “errand mobile”. Not for you probably, but for people who drive TESLA’s and other good EVs. Due to the EV price point and since leasing options are very limited buyers of the “errand mobiles” are wealthier than the average person. I don’t say that wealthier people are smarter, but I will say that they are certainly not dumber. Have a great weekend.
April 7th, 2023 at 3:56 pm
16 – Have a great weekend. One BEV will work for us. But our 180 mile (one way) monthly visit to the kids still needs an ICE or HEV (no plug at our destination). Similarly, our annual 1400 mile migration requires an ICE/HEV (it’d drive me nuts to make it a 3-day trip).
April 9th, 2023 at 7:12 pm
John recently ranked automakers (see link.) Tesla has about a 15% profit and can afford it. But Tesla’s honorable competition does not have that luxury.
A TSLA and Model 3 owner, I see price reductions forcing a lot of the competition out of the EV market.
April 10th, 2023 at 8:46 am
4) That is what I thought as well. The return of the Matrix, which Toyota officially called the Corolla Matrix. It will be nice to have such a vehicle back on the market. AWD is nice but not necessary for such a car. Would likely be cheaper and better on fuel without it. Maybe they will release a FWD variant with a later iteration.
April 10th, 2023 at 9:01 am
11 Ive said that many time here before and that everyone looks at EV sales in terms of 100% proliferation. Like it will fully replace the ICE completely in the next few years. While that may eventually happen I dont think its going to be as soon as some people would like.
John made a very good point on one of his after hours discussions that most vehicles have a 12 year life span. As of now you will still be able to buy an ICE up to 2035 so regular gas cars will be on the road on into 2047 and look around now how many cars you see that are 20-30 years old. So well into 2055 gas cars will be on the road.
It could be adopted quicker if it becomes a better product for the money. If EVs were cheaper refilled in equal time to gas and got similar range it makes perfect sense. Right now your asking consumers to spend more for less. When that pendulum balances out EVs will get a lot more interest. I dont think its a matter of consumers not knowing enough about them I think its what they do know about them.