Published on September 8th, 2017 | by Zachary Shahan0
Toyota Chairman Doesn’t Get It — Still Asleep On Electric Cars
September 8th, 2017 by Zachary Shahan
Earlier this week, Takeshi Uchiyamada, the chairman of top-selling automaker Toyota, explained why he didn’t understand the quick transition to electric cars that many of us see on the horizon. Or, if most of you reading this and I are absolutely off our rockers, he explained what we are ignorantly ignoring.
Mr Uchiyamada made a few key points anti-selling electric cars. Below, I’ll explain why I think each of them is incorrect or misleading. After that, I’ll expound on why I think it’s harder for Toyota than others to accept the transition to electric cars.
Driving Distance & Charging
In the interview with CNBC, he stated, “But in order for electric vehicles to cover long distances, they currently need to be loaded with a lot of batteries that take a considerable amount of time to charge.” Indeed, sort of, but that misses context and some top-of-market examples. First of all, the vast majority of driving is not long distances. In the USA (where people drive approximately twice as much as Europeans), we drive fewer than 150 miles nearly 100% of the days in a year. Furthermore, nearly 100% of trips are 50 miles or less.
Yes, charging may take a while, but if you have a car with 150 miles of range and can charge it at home or work, you almost never have to charge it somewhere else — and, of course, you don’t stand next to the car uselessly while it’s charging.
Also note that many households have two cars. If you have two cars and only drive more than 150 miles in a day a few times a year, one of your cars almost definitely doesn’t need to think about charging on a long trip.
On long-distance trips, an electric car with a decently sized battery (like a Tesla Model 3) can drive 3–5 hours on a full charge. By then, a normal human needs a break to use the restroom, stretch, and perhaps eat and drink a bit. Depending on where you need to go next, you can spend 30 minutes to 1.5 hours charging while doing those things and then be on your way. Sure, if you needed to spend just 10 minutes charging, that would be even more seamless, but it wouldn’t end up changing your needs that much — you still need to use the restroom, stretch, perhaps eat and drink a bit, and check your smartphone for various notifications. And, again, remember that such trips only account for maybe 1–4 days out of the year for most people.
Also, it’s not just Tesla that is creating competitive long-range electric cars now — GM, Nissan, and Renault already have options on the market. As far as charging, superfast charging is indeed a must for a convenient long-distance trip and only Tesla offers that right now, but Toyota partnered with Tesla in the past and could do so again.
But a core thing to remember is that the vast majority of charging can be done at home or work, saving consumers hours of their lives that they would have spent going to gas stations. In the grand scheme of things, electric cars today may already be more convenient than gasoline cars.
Mr Uchiyamada’s next line: “There’s also the issue of battery life.” This is an odd one. Tesla expects its batteries to last at least 10–15 years inside the cars. After that, it’s not as though the batteries are useless. They can either be recycled and most of the materials can be used again, or they can be repurposed for use as stationary storage. Either way, there’s still a lot of value left in the batteries.
But let’s be realistic, buyers aren’t thinking 15 years out when deciding which car to buy, and real-world experience indicates that electric cars on the roads today aren’t losing range significantly enough to be a deterrent to customer satisfaction and future sales — except in the case of one company that decided to not use adequate battery pack management in super hot climates, but even that has seemingly been resolved.
Legal Requirements vs Consumer Demand
A closing statement on electric cars? How’s the following one? “But as laws and regulations (that encourage the development of electric vehicles) come into effect in places like China and the U.S., car makers will have no choice but to roll out electric vehicles or risk going out of business. Toyota is no exception, but we’re skeptical there would be a rapid shift to pure electric vehicles, given questions over user convenience.”
Such comments about consumer demand amaze me in the face of 455,000 reservations for a single car model — the Model 3. And it’s not even a CUV! Tesla didn’t engage in black magic to gain those reservations. All it did was offer a compelling mixture of range, price, tech, performance, and charging capability. Plus a mission to help save the world.
When millions of drivers show their friends and family how convenient home/workplace charging and EV life are, the next wave of electric car adopters will come out and be ready to plug their car into a home charging station. At this point, we are well beyond a “proof of concept” — we have received proof of demand. Okay, if you want to wait for actual production and deliveries before getting excited, go ahead, but if you’re the head of a major car company, that’s the last thing you should be waiting for.
Why Is Toyota So Slow To Jump On The Electric Bandwagon?
There’s a trend in technology transitions — the leaders of one transition have a tendency to slowly embrace the next. When you think of normal hybrids (not plug-in hybrids), you think of one of two things — Toyota or the Toyota Prius. That’s nearly universal.
Being the leader in the “hybrid generation” of electrification, it is not surprising that Toyota would like to hold onto that lead and would like that market to retain its status as the big dog of “green vehicles.” Denying the superior benefits of plug-in electric cars (like convenience of home/workplace charging) is one way to delay the forecasted transition in your mind, and it’s also a way to try to discourage electric car sales — consciously or subconsciously.
But a rather funny thing from the very beginning of that CNBC interview is that Mr Uchiyamada admits he and his team were even surprised by the rapid uptake of success of hybrids! They didn’t see so much latent demand for more fuel efficient vehicles using hybrid drivetrains. While Toyota did get lucky anyway and bust up that big market, it seems the heads of the company are again discounting the latent consumer demand for cars that are better in several ways and that have only a couple of downsides. It also comes across like they are unaware of the progress electric vehicle tech is making at other companies or they are just trying to block it out.
It’s a bit shocking to see the lack of vision and lack of understanding for how markets shift from the chairman of the world’s largest automaker. But hey, some things are hard to see when you sit atop a very tall chair.
- MIT Proves What We’ve Argued For Years: Range Anxiety Anxiety Is Illogical
- Electric Car Convenience vs Range Anxiety Anxiety
- Electric Car Range Anxiety Should Be A Non-Issue For Millions Of Americans
- The Other #1 Reason Why Electric Cars Will Dominate The Car Market
- Tesla Model 3 vs 22 Competitors (The Straight Specs)