Akihabara News (Tokyo) — The leadership shuffle at the top of Toyota Motor Corporation came as a surprise, at least in terms of its timing, but there’s yet little reason to expect any dramatic transformation in the giant Japanese automaker, which is in increasing danger of becoming roadkill in the shift toward zero-carbon transportation.
President and CEO Akio Toyoda will be stepping away from the day-to-day management of the firm in April and handing the reins to 53-year-old Koji Sato, who is currently in charge of the Lexus brand.
However, Toyoda isn’t going very far. He will become chairman of the board and possibly has his eye on becoming chairman of the Japan Business Federation (Keidanren) as well. That reality, plus the fact that many of Toyoda’s older henchmen will still be senior executives in the company, suggests that Sato’s scope for making any major changes will be extremely limited.
At least for the time being, he won’t be his own man, and he might have been selected precisely because his is not interested in any major alteration of direction.
While Toyota Motor’s resources remain enormous at this juncture, Akio Toyoda’s enduring skepticism that electric vehicles (EVs) are the primary technology of the future may have put the company on the path to obsolescence. Tesla, rising Chinese automakers, and even some of the traditional Western automakers have embraced EV technology and are already poised to offer low-cost models to the market that Toyota may be hard-pressed to compete with.
Additionally, it’s not clear that the Japanese automaker has fully grasped the degree to which software will be integral to future transportation systems.
Certainly, Toyota’s first mass-market EV, the bZ4X stumbled out of the gates last year, subject to a recall and stop-sale order. While sales have now resumed, the firm is only planning to try to sell 10,000 units in the US market this year, and its global sales network very much prioritizes older hybrid technologies.
Specifically in the US market, Toyota is also grappling with the fact that under the Biden administration’s Inflation Reduction Act, buyers of EVs will not receive the US$7,500 federal tax credit if they purchase one of the Toyota models.
This bearish picture stands in sharp contrast to Tesla, which even now earns roughly seven times as much profit per vehicle as Toyota does.
Indeed, in last week’s earnings call for the final quarter of last year, Tesla CEO Elon Musk made clear that he doesn’t even consider Toyota to be a serious competitor in the EV market. Rather, he stated, “the Chinese market is the most competitive. They work the hardest and they work the smartest. So a lot of respect for the China car companies that we are competing against. And so, if I were to guess, there is probably some company out of China as is most likely to be second to Tesla.”
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