The Japanese finished five years at the top of the world rankings, but they have had their vehicles among the top three best-selling cars for more than ten years. Furthermore, since 2012, only the Ford Focus and Ford F-Series have managed to dislodge Toyota from first place.
The surprise overtaking of Tesla’s Model Y reflects many things. But it also leads us to wonder if Toyota is on the right track or if it is not reacting too late to the electric vehicle.
An electric car at the top of global sales
For the first time, an electric car is the best-selling car in the world, according to accounts from Jato Dynamics, a consulting company specializing in compiling this type of data in the automotive world.
After overcoming the obstacle of being unable to generate profits with its regular sales, Tesla managed to break its glass ceiling and make its vehicles truly mass-market cars. The Tesla Model 3 was the entry into this market, but it was the Tesla Model Y, an SUV, as required by the majority of the market, that managed to position itself as the best-selling car in the world.
Once Tesla managed to produce at a good rate, the profit margin made by each electric car gave it a cushion to face possible price cuts from its rivals. A war in which its profit margin was reduced, but from which it emerged a winner because it has always succeeded in positioning its Model 3 and Model Y as the electric cars with the best range/price ratio.
In addition to this, the company managed to generate a disruptive brand image (whether it was or not), which seduced with its minimalist interiors and, above all, which was able to make the public believe that it had the the most advanced electric cars. An image that was supported by its extensive charging network which, especially in the United States, ended up becoming the benchmark.
All this has created a huge gap in the electric car field with Toyota. The Japanese giant still has the RAV4 as the world’s second best-selling car (and the Toyota Corolla as third), but the fact that an electric car has overtaken it may begin to show the flaws in Toyota’s strategy.
The risk of being late
The last few years have featured a complicated relationship between Toyota and the electric car. Given its advanced hybrid system, you’d think the electric car was a no-brainer for Toyota. But technology has brought so many changes that the brand’s first foray into electric cars was a disaster.
The Toyota bZ4X has been criticized for its poor range and has been subject to several recalls. Some as serious as the risk of one of the car’s wheels detaching. The first foray into this field was a failure which was also accompanied by several declarations from its leaders, in which they assured that the electric car was far from being the future.
The manufacturer continues to assert that the hybrid (rechargeable or not) is the most rational solution, the size and technology of the batteries preventing the electric car from being presented as the ideal solution for all drivers. In Japan, the public seems to agree with them.
After its first launch failed, Toyota upended its electric car plan by investing $38 billion, according to Reuters, in a bid to completely turn things around. Solid-state batteries and improving production processes are the company’s two big goals to be competitive in the future.
Toyota’s strategy is to sell electric cars when the market allows investment and production efforts to be supported. Akio Toyoda, president of Toyota Motor Company, assured a few days ago that “no matter what improvements are made to the electric car, its sales will not exceed 30%.” The smartest solution seems to be to sell when there is a market.
While half the world is obsessed with electric cars, Japan remains faithful to its bet: hybrid cars.
But being a market leader also requires taking risks, and Toyota’s conservative, standstill tactics could open up a huge gap with the competition, which could prove decisive in the end. Only the future will tell us.
However, BYD’s presentation of the BYD Seal U highlighted the importance of active participation in the market. Certainly, the Chinese brand must make itself known in Europe and in countries like Spain, but in a country where the electric car still has a bright future ahead of it, it seems essential to show that as a brand, we are doing part of the movement. The fact that your cars are visible on the streets, that someone you know buys one, generates a certain feeling of security for the potential customer who gets lost watching the bulls from the side of the road.
For now, Toyota has made its Model Y the best-selling car in the world. In the future, other cars will compete with it in terms of range and price, but this seems to be a wake-up call for Toyota, which has dominated this list with an iron fist for the past ten years.
Over the years, we will see if either of them was right or completely wrong.