Get all your news in one place.
100’s of premium titles.
One app.
Start reading
InsideEVs
InsideEVs
Technology

Big Investments From Toyota, Honda Prove EVs Are Far From 'Done'

Environmental groups and industry experts have hurled vitriol at Toyota, the world’s largest carmaker by sales volumes, for loitering around with its EV plans. The bitter criticism was largely justified. Toyota offers just two EVs here in the U.S. and its unyielding resistance and lobbying against the EPA’s proposed emissions goals has grabbed headlines for months. But the Japanese automaker is rolling up its sleeves and increasingly committing to EVs, with billions of dollars worth of new investments announced in the U.S.

Welcome to Critical Materials, your daily round-up of the crucial news and events shaping the U.S. and global EV industry. Great news for fans of Critical Materials: the series now runs Monday through Friday, and it will be available as an email newsletter soon as well. 

I’m back from a two-week trip to India, transitioning from 104 degrees Fahrenheit in Mumbai to New York City’s tolerable 50-degree springtime temperatures—that feels like walking out of an oven directly into a wine cellar. Today we’re discussing Toyota’s fresh investment at its Indiana plant for an all-new BEV, Chinese EV makers entering a potential “life and death race” as competition heats up in the domestic market and former Tesla executive Drew Baglino exercising his stock options with a mass sell-off of 1.1 million Tesla shares.

30%: Toyota Pumps $1.4 Billion Into Indiana Plant

Remember Toyota’s plans to build a three-row electric SUV at its Georgetown, Kentucky plant? That SUV, rumored as the bZ5x, will be tailored for the U.S. market and will ride on a BEV native platform. But Toyota won’t stop at that in its quest to make EVs locally. The brand announced yesterday that it will invest an additional $1.4 billion at its Princeton, Indiana facility to assemble a separate three-row electric SUV.

That brings Toyota’s EV investments in Indiana to $8 billion and adds 340 new “high quality” jobs with “long-term stability.” Assuming Toyota keeps up its promises, that’s great news for the U.S. auto market and its large appetite for large, three-row family SUVs.

Tim Hollander, the president of Toyota Motor Manufacturing Indiana, said the new BEV will ride on a tweaked ICE architecture instead of a dedicated skateboard chassis. Since Toyota already makes the ICE Highlander at its Indiana facility, alongside the Sequoia and Sienna, it’s possible that the future electric Highlander could be made at the same location.

A part of this $1.4-billion investment will also go into adding a new lithium-ion battery pack assembly line at Princeton. This line will assemble cells made by Toyota’s $13.9 billion North Carolina battery plant that’s expected to begin operations in 2025.

Honda also recently announced a massive investment in North America. It will inject $11B in Canada towards an EV and battery assembly plant. The investment will allow Honda to build 240,000 vehicles annually, the capacity to produce 36 gigawatt-hours of batteries and add 1,000 new jobs.

Japanese automakers are no doubt laggards in the EV race. Yet, it’s too early to scrub them off. I’m bullish, especially in Toyota’s case, because it already has strong foundations. It has a massive and loyal customer base, a well-established dealer network and also a huge manufacturing capacity—all here in the U.S.

To make its EV plans work, Toyota now needs to learn from itself: Build affordable and reliable EVs that outlast their buyers—something it is already a pioneer of when it comes to gas cars.

60%: China’s EV Makers Enter “Elimination Round”

Despite robust government support and rapid growth, oversupply concerns threaten the survival of many smaller Chinese EV makers. And a brutal price war and slowing growth rate for EVs are only compounding the problems.

“Competition in the new energy vehicle (NEV) industry will be extremely fierce in 2024,” the National Development and Reform Commission (NDRC), China’s leading economic planner, said recently, according to CNN.

Some 200 EV manufacturers are jostling for a share of the Chinese EV market. But fewer than five major players could exist by the end of the decade, Richard Yu, the CEO of Huawei’s consumer business division, predicted last June.

Here’s a chilling excerpt from the news channel:

As competition becomes more intense, many carmakers will perish in the coming months, according to China’s EV company CEOs.

“Entering 2024, the knockout round of China’s auto industry will begin in an all-round way, and the industry will enter a period of consolidation, with a complete reshuffle,” said Gan Jiayue, chief executive officer of Geely Auto, at the company’s earnings conference in March.

Wang Chuanfu, chairman of BYD, also predicted in March that a “brutal elimination round” is coming.

The on going 2024 Beijing Auto Show is a great example of this “overcrowding.” InsideEVs will have more coming from Beijing, so keep watching this space for all the latest updates.

90%: Former Tesla Executive Sells 1.1 Million Tesla Shares

Drew Baglino, Tesla’s former senior vice president of powertrain and energy engineering, has sold some 1.1 million shares worth $181 million, per the latest SEC filings viewed by InsideEVs and first reported by Reuters.

Baglino’s mass sell-off of Tesla shares comes after he left the automaker in mid-April after 18 years of service. His departure came on the heels of mass layoffs rocking Tesla’s gigafactories across the globe. The brand cut 10% of its global workforce as it aims to reduce costs and “increase productivity” in the face of increased competition and slowing growth rate for EV sales.

 

“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” CEO Elon Musk said on the Q1 2024 earnings call. Tesla shares jumped some 18% after the earnings call, where Musk reiterated Tesla’s plan to be first and foremost an artificial intelligence and robotaxi company.

Tesla has revolutionized electric cars. It made them cool and increasingly attainable, especially after igniting a disruptive price war. Baglino has been a significant force in Tesla’s rapid growth, and as the EV maker finds itself in the eye of a storm, his complete withdrawal from the brand is worrying.

100%: Can Japanese Automakers Emerge As Strong EV Contenders?

They’ve done it once before. In the 1980s, Japanese automakers, on the back of Toyota’s revolutionary lean manufacturing techniques took global auto markets by storm and established a hegemony that’s in place even today.

With billions of dollars of investment going into building zero-emissions passenger cars of the future, can brands like Toyota and Honda come back into vogue? Leave your thoughts in the comments.

Contact the author: suvrat.kothari@insideevs.com

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.