– Toyota’s electric vehicle production and dilemma coping direction
In this article, I will consider the dilemma that Toyota is currently facing in relation to electric vehicles and how to deal with it. Electric vehicles sold 2020 million units worldwide in 312, an increase of 41.4% compared to the previous year. As the range of electric vehicles has increased and the charging time has been greatly shortened, the spread of electric vehicles has become a reality in front of us, but it seems that there are still many problems to overcome.
For example, considering the recent large-scale blackout in China, geopolitical risks due to regional bias in lithium mines, infrastructure problems related to electric vehicle charging, and the disposal of used batteries, it is still a little more difficult to move from gasoline to electric vehicles. It will take time. However, given that Tesla is almost certain to hit a million-unit production mark in 2022, it seems undeniably that an important technological paradigm shift is at hand for an established automaker like Toyota. In addition, cases where companies from different industries are entering the electric vehicle market are increasing, such as Apple and Taiwan's Foxconn participating in the automobile industry.
As electric vehicles become popular, engine parts and drive system-related parts will become unnecessary, and there is a prediction that about 100 million jobs in Japan alone could disappear in the future. Although electric vehicles are becoming the mainstream of the future car market, there are many voices in Japan pointing out the strategic risks of Toyota in that Toyota has not released any outstanding products related to electric vehicles so far.
It can be said that Toyota has developed an ambidexterity strategy as a strategy for electric vehicles so far. An ambidextrous strategy refers to developing new technologies for the future (exploration) while balancing the strategy of maximizing cost reduction and profit by thoroughly utilizing existing technologies (exploitation: deepening existing technologies). .
First, looking at Toyota's recent trends, there were many production disruptions due to the automobile supply chain due to the impact of COVID-19, but in 2020, it produced and sold 952 million units, regaining the title of the world's largest automobile manufacturer from Volkswagen in five years. It is no exaggeration to say that Toyota is still a company with the world's largest production scale and high competitiveness in terms of gasoline automobile production alone.
In particular, it is noteworthy that the Chinese market is growing significantly more than the US market. It is no exaggeration to say that Toyota's boom in the Chinese market is contributing greatly. Toyota, which already sold cars in China that exceeded the number of cars sold in Japan in 2019, is not slowing down its new investment in the Chinese market. In 2020, the overall Chinese automobile market decreased by 6.6% compared to the previous year, producing 2080 million units, but Toyota grew 9.3% and ranked second in the sales ranking.
Toyota's success factors in the Chinese market include high used car prices, the launch of SUVs that suit the tastes of Chinese consumers through local development, the success of the brand luxury strategy through the Lexus brand, and the establishment of consumer perception that it is a low-cost car for repair and maintenance. can do. If we look at the case of China, it can be inferred that Toyota is thorough in its strategy of securing profits using existing technologies by improving gasoline vehicle technology. In the Japanese and American markets, investments in gasoline vehicles are also being made continuously, including model changes for SUVs and pickup trucks.
However, it can be said that the time when Toyota is most successful is also the period of greatest crisis for Toyota. The reason is that the spread of electric vehicles is imminent. If you look at the sales of new energy vehicles in China, you can see that the sales of electric vehicles are accelerating. The name of Toyota cannot be found in the 2020 electric vehicle sales ranking, and Chinese manufacturers such as Tesla, Shanghai Tongong Wuling Railway, and BYD are mainstream. It can be seen that the .
However, recently, Toyota seems to be recognizing the importance of electric vehicles in earnest. Toyota, which has procured much of its lithium-ion batteries through cooperation or joint development with Panasonic, China's CATL, and BYD, has recently announced the construction of a lithium battery plant in the United States and is spurring the development of all-solid-state batteries and speeding up the development of electric vehicles. that it is paying
Toyota has decided to invest 2030 trillion yen by 1 as an investment in electric vehicles. Considering that it has invested heavily in the new technology area of the future, it can be said that Toyota has continued to develop exploratory technology. Toyota, which has experienced large-scale recalls in the past with regards to gasoline vehicles, seems to be working on the development of electric vehicles with a cautious attitude. Although Toyota has already acquired patents for many all-solid-state batteries, all-solid-state batteries have technical limitations that are difficult to use for a long time and high production costs during mass production. He seems to be in a position to leave.
Through exploratory technology development, which is one of the ambidextrous strategies, Toyota is building potential knowledge accumulation and organizational capabilities in case the defect standard (industry standard model) of the automobile industry changes rapidly. For a simple example, academic research is important in that it can be the source of knowledge for patent applications. Even if you look at the fact that the number of related Toyota researchers is higher than that of GM and Volkswagen, you can see how active Toyota is in battery-related source technology.
Also, according to the Japan Economic Daily, if you look at the patent application rankings of automobile companies that have electric vehicle-related patents in the United States, Toyota has 8,363 cases, Ford has 6,564 cases, Honda 3,849 cases, and GM holds 8,283 cases. It is clear that Toyota has accumulated a lot of knowledge and production technology regarding motors, inverters and batteries through the production of hybrid and PHEV vehicles. As such, Toyota is accumulating sufficient technology and knowledge regarding electric vehicles. However, I think the most important part in the future will be how much cost reduction is possible in relation to the all-solid-state battery technology and whether it can maintain its leadership in the electric vehicle market like gasoline cars through internal production of batteries.
In addition, helping suppliers that produce parts that are not required for electric vehicles produce electric vehicle parts or change their business through technology development transition is also a way to solve employment problems that may arise from electric vehicle production. It is a task left to Toyota. Unlike the home appliance industry model, where new products rapidly build old models and dominate the entire market in a short period of time when the industry standards of products change, it takes time for the industry standards to change, so the time for both old and new models to exist at the same time is long. It is highly likely.
It is not an easy choice for Toyota to carry out restructuring of parts makers through the conversion to electric vehicles in a situation where it is making a lot of profit from gasoline car production as it is now, but when Toyota built a new plant in Kyushu in the past, it As a bumper maker, he has had success in converting a home appliance parts maker into an auto parts maker. It can be said that Toyota's true capability in the future will depend greatly on whether it can succeed not only in developing all-solid-state batteries, but also in rebuilding the parts procurement system through collaboration with parts makers.
※ Please note that this manuscript is information prepared by an external expert and is not an official opinion of KOTRA.