Picture Credit: Maximalfocus
Electric cars have been the future of motoring since the threat of global warming arose and we realised that there is a drastic need to cut down emissions. Motor vehicles are responsible for almost 14% of all emissions and it is essential to drive that figure down to combat global warming and avoid a catastrophic climate disaster. However, the initiative to change to fully sustainable vehicles has unfortunately been half hearted. With powerful oil companies lobbying against any initiatives and most car enthusiasts clinging onto their petrol thirsty V8 engines, there wasn’t much of a desire to purchase electric vehicles.
Then Tesla entered the market.
When the Tesla Model S hit the market in 2012, it created an explosion of curiosity about the future of electric cars. Since then, Tesla has dominated the electric car market by producing cars such as the Tesla Model X and the Tesla Model 3. The Tesla Model 3 was so popular that it was not only considered the best electric car, but also the best overall car in Europe for the month of September in 2021. Tesla’s unrivalled success in the electric car market has prompted many other car manufacturers to follow suit.
Toyota, one of the largest car manufacturers in the world, have also set their targets in the electric vehicle market. Toyota made an astounding 10.7 million new cars in 2019 alone, and they are now reengineering their line-up to include a larger variety of electric vehicles. Toyota announced that they will be investing $35 billion in electric vehicles to potentially rival Tesla in the market.
Toyota is planning on diversifying their electric car line-up by 30 new models with a mix of new sports and commercial electric cars. Toyota is also planning on manufacturing more than 3.5 million new electric cars annually before 2030.
However, Toyota hadn’t always planned on increasing their electric car range to such a capacity, instead they thought the solution lay in having a diverse line-up of electric, hybrid and hydrogen powered vehicles. This approach however worried investors who thought that Toyota was doing the bare minimum in the electric car market, a market which was proved (by Tesla) to be a very lucrative one.
Picture Credit: Vlad Tchompalov
Although their $35 billion investment is smaller than Volkswagen’s €52 billion initiative, investors are confident that Toyota’s new commitment to electric vehicles will make them into a dominant player in this competitive market. Christopher Richter, head automotive analyst at CLSA (a capital market company), commented, “They don’t make announcements like this unless they believe they can do it and want to do it. It tells me there is a high level of commitment”.
However, Toyota is also being cautious about overextending into the electric car market, as it could potentially hurt their bottom line. The pace of adoption and the technological breakthroughs are still unknown, so Toyota can’t forecast the demand very easily. Akio Toyoda, the president of Toyota Motor Corporation, commented “Toyota can’t decide what menu customers will choose, so we want to expand the range of options we have… Leaving options for everyone and following the right solution as soon as we find out. That is how we can remain competitive and survive”.
Big players like Toyota competing directly in the electric vehicle market will not just boost the availability and accessibility of zero emission vehicles at affordable prices, but it will also simultaneously kick start incentives for developing infrastructure to facilitate the mass use of these new electric cars. Tesla might currently hold the throne to the EV market, but with big players like Toyota and VW entering the mix, only time will reveal who will come out on top.
December 15th 2021 | 4:30 PM