Toyota just leased its first mass-produced battery electric car in Japan, a strategy the automaker says will help ease driver concerns about battery life and resale value.
Toyota Motor Corp. rolled out its first mass-produced battery electric car for lease-only in Japan on Thursday, a strategy the automaker says will help ease driver concerns about battery life and resale value , but has raised analysts’ eyebrows.
According to industry data, gasoline-electric hybrid models are far more popular than electric vehicles (EVs) in Toyota’s domestic market, which accounted for just 1% of passenger cars sold in Japan last year. Nevertheless, the market is growing rapidly and foreign automakers, including Tesla Inc., are making inroads into the streets of cities such as Tokyo.
Including insurance, repair costs and battery warranties in the deal, Toyota will lease the bZ4X sport utility vehicle (SUV) for the equivalent of $39,000 for the first four years. Cancellation in the first 48 months will mean additional charges.
CLSA analyst Christopher Richter said, while EV acceptance in Japan has been slow, this will change, and Toyota may risk losing market share by focusing on the lease model rather than the purchase.
“Whatever you’re doing, it’s getting harder to buy, that’s probably not a good thing,” he said.
“It’s a strategy I don’t like. It signals that Toyota is taking a bit of the domestic market.”
Toyota said in December that it would pledge 8 trillion yen ($62 billion) to electrify its cars by 2030.
Toyota aims to lease 5,000 SUVs in the current fiscal year — the same amount of EVs that analysts estimate Tesla sold in Japan last year.
The automaker plans to start selling the bZ4X in other markets later this year, and pre-orders have already started in some European countries.
A spokesman said Toyota has not decided when it will start selling the cars in Japan.
‘Take away the worry’
Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said EVs became popular in Europe through lease programs offered by employers and that Toyota is making similar efforts to popularize electric cars.
First-time customers are concerned about battery life and a potential drop in trade-in value over time, said Shinya Kotera, president of Kinto, the Toyota unit that offers the lease.
“It is our role to address the concern” towards EVs, he said.
According to industry data, battery EV imports nearly tripled to reach a record 8,610 vehicles in 2021. Analysts estimate that about 60% of them were Teslas.
Still, Japanese automakers remain cautious about switching to the all-electric lane.
Toyota pioneered the hybrid more than two decades ago and maintains big ambitions for both hybrid and hydrogen-powered vehicles, even as it is investing more in boosting its battery EV line-up. .
Rival Nissan Motor Co pioneered mass-market EVs in 2010 with the Leaf, but will also launch its second battery EV model, the Aria SUV, on Thursday. The Aria will be sold for the equivalent of $41,500, which does not include government subsidies.
Honda Motor Company in April had set a target of producing 30 electric vehicle models globally by 2030.
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