Here’s a statistic Toyota can’t be very happy with: More Toyotas are traded in for electric cars than any other brand, and it’s probably safe to assume all those people aren’t rushing out to buy the bZ4x. The biggest mark lately against the world’s largest automaker (maybe that’s VW this year; anyway, it’s close), especially for people who held it up as the “green” standard bearer after pioneering hybrids with the Prius, is that it’s been slow to move on EVs. Lately that seems to be changing, even if it won’t happen overnight, and the next step is ramping up American-made EVs and batteries for that sweet, sweet tax incentive cash.
Welcome to Friday, Autopians. That story leads us off today, along with some boardroom drama at the same company; another management shuffle at Infiniti; and some more developments about just how weird new car inventory is these days. Let’s finish the week strong.
Toyota Announces Kentucky-Made EV SUV With North Carolina Batteries
“Making up for lost ground.” That’s how the Detroit Free Press describes Toyota’s current position on the battlefield as it competes against the major investments Ford, General Motors and other competitors are making into batteries and electric vehicles.
You probably know the backstory by now: Toyota, the world’s biggest automaker, has historically been more skeptical of full-on battery EVs than many competitors for a variety of reasons. Those include concern over the technology’s viability in other markets—think Africa or South America, where its trucks reign supreme. (Not every country is Norway, right?) There’s also long been a belief within the company that a mixed approach, including hybrids and hydrogen, are better for reducing emissions long-term.
But at this point, it’s also a question of future-proofing Toyota and making sure that customers who desire EVs don’t decamp to other brands for good. Big investments into this space are finally coming. Incoming CEO Koji Sato recently announced a new, from-the-ground-up battery EV platform to underpin multiple vehicles.
This week, Toyota announced a new three-row electric crossover will be built in Kentucky—the same plant where it makes the Camry and RAV4—with batteries built in a new North Carolina factory. That car will then qualify for the full EV tax credits in America. The Freep’s story has more on what huge investments these are:
The automaker’s first U.S.-built three-row electric SUV will be assembled at Toyota Kentucky in Georgetown, Kentucky, about 5 miles north of Lexington, Toyota said. Toyota currently employs about 9,500 people at the 9-million-square-foot facility where it makes the Camry sedan, RAV 4 SUV, several engines and other parts. The new investment will retain jobs there, Toyota said.
The batteries for the EV will be made at a new battery plant that is currently under construction in Liberty, North Carolina, about 15 miles south of Greensboro. When it is done in 2025, the automaker said it expects it will employ 2,100 people. Toyota is investing the additional $2.1 billion in that battery plant to support the company’s drive toward carbon neutrality, it said. Toyota’s total investment in the facility, called Toyota North Carolina, is now $5.9 billion.
“It is exciting to see our largest U.S. plant, Toyota Kentucky, and our newest plant, Toyota North Carolina, drive us into the future together with BEV and battery production for our expanding electrified lineup,” said Ted Ogawa, CEO of Toyota Motor North America.
My takeaways here are just the obvious ones. First, it’s good to see such huge investments in American jobs; that was the goal of the EV provisions in the Inflation Reduction Act, and by all objective accounts it seems to be working.
The next two to three years are when we’ll see most major automakers (that aren’t Tesla, which has been at this for a while) open their U.S. battery plants and deploy their new, connected, modern EV-specific platforms. But in Toyota’s case, by then competitors like GM, Hyundai, Tesla and Ford will have been doing at least some of that stuff for a while; GM says it wants to have 30 EVs for sale worldwide by 2025, for example, and wherever Hyundai takes its EV offerings in the next few years should be quite impressive. Toyota’s biggest risk might be being behind those other companies technologically.
I am confident that when Toyota throws more weight behind EVs that the cars will be legitimate, serious players in this space in ways that the bZ4x, with all its issues so far, has not been. But it’s going to have its work cut out here.
The electric MR2 could help. Just putting that out there, Toyota.
Shareholder Contention Over Akio Toyoda’s Chairmanship
With Sato moving into the CEO role, you’d think that a vote to re-elect former CEO and company scion Akio Toyoda as chairman would be a formality at best. Apparently, that’s not the case.
Reuters reports that a few large Toyota shareholders—including pension systems in New York and California—plan to vote against Toyoda’s appointment, in part over the above stuff on EVs but also over concerns over climate-related lobbying. The pension funds join several European organizations in doing so. (See more on the accusations related to Toyota lobbying here.)
Via Reuters:
The California Public Employees’ Retirement System (CalPERS) and the Office of the New York City Comptroller both also voted for a resolution urging Toyota to improve disclosure of its lobbying on climate change, according to postings by the funds.
The details of the votes come after two leading proxy advisory firms last week raised issues about governance at the automaker. One of them, Glass Lewis, recommended shareholders vote against re-electing Toyoda, citing what it said was his responsibility for the lack of a sufficiently independent board.
The disclosures by the public pension systems with a record for activism underscored the pressure Toyota faces at its annual meeting on June 14 over board oversight and its choice to push electric vehicle (EV) alternatives, including hybrids like the Prius.
Toyota said on Friday it actively engages in dialogue with shareholders and investors, and considers the optimal board structure while receiving opinions and advice.
That story notes Ford and GM have also been urged by similar investors “to move rapidly toward electrification and to disclose more about their lobbying on vehicle standards.” I’d be thoroughly surprised if Toyoda’s re-election didn’t happen here, but all of this is yet another example of how more and more investors are flexing their muscles on climate issues.
Infiniti Gets A New Boss, Again
Infiniti, which as you may recall, is the ostensible “luxury brand” of Nissan, has another top boss in Jose Roman, the exec formerly in charge of Nissan in Mexico and Latin America. If you haven’t thought about Infiniti in a while—and really, who has?—here’s a recap of its leadership shuffles from Automotive News:
Roman succeeds Peyman Kargar, who left March 30 to return to Renault in France after a three-year assignment leading the brand since June 2020. Olga Filippova, general manager in charge of global sales and marketing, was appointed acting Infiniti head.
The management shuffle at Infiniti came just as Kargar was preparing for a wide-ranging brand reboot centered on the QX80 SUV to jump-start a new era of growth in the battery-electric era.
The fresh Infiniti road map, as described to Automotive News before Kargar’s departure, was to include a new look for Infiniti dealerships, a new design language across the lineup and a flurry of accents to impress customers, such as a unique Infiniti scent and signature sound.
The relaunch was scheduled to coincide with the introduction of the redesigned QX80 as the brand’s flagship. A close to production Monograph prototype is set to be unveiled this year.
It is unclear what the leadership change means for the latest brand strategy.
Kargar’s predecessor had that job for just three months, and the guy before that guy left to lead Jeep (which is a clear step up from Infiniti, I think we’d all agree.) The QX60 crossover is basically carrying the whole operation now, as is the huge and ancient QX80.
The story also includes this note about Infiniti during the Carlos Ghosn era of Nissan:
At one point, Ghosn’s plan called for Infiniti to be a pioneer in luxury electric vehicles, getting an EV based on the Nissan Leaf on sale in 2014. That never happened.
God, that’s all just very depressing!
New Car Inventory: Still Weird
Unless you want a Jeep Renegade and a few other stragglers, new car inventory is still bonkers thanks to pandemic-related supply chain issues. Automotive News, citing a report from data firm Cloud Theory, says pre-pandemic inventory levels may never return:
Inventory has climbed back toward 2 million in the last quarter of 2022 and the first quarter of 2023, but Rick Wainschel, Cloud Theory’s head of data science and analytics, does not expect the industry to get back to the pre-COVID inventory levels of 3 to 3.5 million
“I don’t think it’s going to go back to that level any time soon, if ever,” Wainschel said.
Parts procurement remains difficult for some manufacturers, but there is more to the story; many manufacturers realized during the pandemic that they did not need as much inventory as they had previously operated with and that it was sometimes more profitable to be tighter on supply, according to Wainschel.
Emphasis mine there because that’s exactly what happened. Automakers realized they can make way more money by limiting inventory and getting customers to just spend more. But that’s starting to bite them in the ass a bit, as even the Cloud Theory data chief notes:
Imbalanced trim mixes have put upward pressure on the average price of inventory, which has risen steadily since September 2022. The average marketed price of vehicles in April 2023 was more than $50,000 for the first time ever, according to Wainschel.
Meanwhile, the average turn rate slumped in the last quarter of 2022 and has remained below 60 percent in 2023, compared with more than 80 percent in the beginning of 2022.
“Part of that is a reflection of inventory going back up, but part of that is people being priced out of the market,” Wainschel said.
Wainschel expects to eventually see a new normal in which inventory hovers around 2 to 2.5 million, the trim mix begins to balance out and the turn rate is closer to 40 or 50 percent.
It turns out this business may not be able to run on $70,000 pickup trucks forever. Who knew?
Your Turn: You Are Now The Boss Of Infiniti
You’re out for a nice morning stroll when you feel something cling to your jacket and launch you high into the air. You barely have time to scream before you realize you’ve been whisked aboard a cargo plane via the Fulton surface-to-air recovery system. In the plane’s cargo hold, you find Carlos Ghosn in a flight suit.
“I couldn’t land the plane because I’ll be arrested immediately if my feet touch the ground,” Ghosn tells you. “But I’m here to tell you that you are the new boss of Infiniti.”
You are understandably baffled, and you ask why Ghosn is here on a Nissan matter; he says he still secretly consults from time to time. He hands you some paperwork to make your appointment official, shoves a parachute into your arms and kicks you out of his plane.
After landing in a pasture several hundred miles from your home, you make the long trek back and start forming a plan. You are now in charge of Infiniti.
What do you do?
Flush: Infiniti needs more distance between it and bargain-basement Nissan as well as new products. Every modern Infiniti I’ve been in strikes me as not bad, and there’s even an argument you can make for ones like the QX80 that are clearly long in the tooth but that also undercut much of its competitors on price. But “not bad” isn’t a super compelling argument to buy a vehicle, and that keeps Infiniti as the also-ran in the space. Being seen as “fancy Nissan” is even worse when Nissan just keeps chasing the bottom of the market. There are people like myself who won’t touch a Nissan with a 304839542-foot pole, and Infiniti desperately needs to move away from its little bro.
Le Cost Killer is gone. Time for some reasonable, well-justified spending on new products that do something, anything to stand out. Maybe reposition yourselves as the enthusiast brand since BMW has largely abandoned its “ultimate driving machine” ethos for the bulk of its products? Introduce some EVs and hybrids that are fun to drive so you don’t fall behind THAT curve, too. I’d focus on the luxo-hoon-market, though. Keep manuals alive in the lineup, and focus on drivers’ cars. That’s a way to keep folks who had a G35 in their Irresponsible Years in the fold while giving folks who can’t stand bucktooth 3ers need somewhere else to go.
Toyota, GM, anybody… make more compact EVs. I live in the city and the prospect of another electric SUV really does nothing for me. The Leaf is/was totally fine as a city car (now cancelled). The Bolt was solid, great range for the price (cancelled too). The Kona EV is fine but not eligible for tax credits anymore, and most of the other compact EVs have been crappy compliance cars. Tesla, for all their failings, understands that people want something like the Model 3, compact and efficient.
Toyota could make a full electric Prius tomorrow and it would sell like hotcakes in California.
Toyota appearing to not be a big player in EVs is no big deal. The EV market is still a fraction of what it will be in the future and most EV models are niche, tech-laden trophies for trendy affluent early adopters to show off how forward thinking they are. Once the EV market is ready for the rest of us, Toyota will be front and center to sell in volume.
People also forget that unlike companies like GM which excel in showing off concept vehicles and overpromising (and underdelivering), Toyota isn’t really into showing off pre-production vehicles. Few people hear about a new Camry, Rav-4, or Tacoma until the production version is ready for the big reveal and examples show up in dealer lots days later.
> that guy left to lead Jeep (which is a clear step up from Infiniti, I think we’d all agree
Lolno. Jeep has only ever made shit cars since the 1970s if not before. Infinitis are nicer Nissans, and they were very good in the 90s-00s.
Ghosn is a weird character but he knows how to run a car company.
> Here’s a statistic Toyota can’t be very happy with: More Toyotas are traded in for electric cars than any other brand
That’s a nothingburger. Toyota is a top seller of sedans and SUVs. Ford and GM are mostly trucks, and those don’t get traded in for EVs, they roll coal.
So as people buy more EVs, the highest-selling sedan and SUV manufacturer will be the most traded in.
This has nothing to do with Toyota itself or the quality of its cars. If they made good EVs instead of sitting on their thumbs, they’d be hot sellers too.