Wen | Liu Ding
The fourth-generation head of the Toyota family, Toyota Motor President and President of the Japan Association of Automobile Manufacturers Akio Toyoda has a major shift in his attitude toward electric vehicles.
At the Toyota Electric Vehicle Strategy Conference on December 14, 2021, he announced that Toyota will invest a total of 8 trillion yen in electrification in the nine years from 2022 to 2030, introduce 30 pure electric models, and convert Lexus into a pure electric brand.
Previously, Akio Toyoda has repeatedly criticized pure electric vehicles for being neither environmentally friendly nor energy-efficient. He even drove a hydrogen-fueled engine model to a racing race in his 50s as president (president of a Japanese company, the president is the chairman) to prove that the engine would not pollute the environment as long as the fuel was replaced.
Toyota motor developed hybrid technology and hydrogen technology in the 1990s, but it became lost in the wave of electric vehicles. From January to November 2021, Toyota's pure electric vehicles and hydrogen energy vehicles have achieved no results, and although hybrid models have increased by about 30%, their technical advantages are being caught up by Chinese auto companies and are threatened by the policies of governments to ban the sale of fuel vehicles.
Toyota motor is known for its lean manufacturing methods, with total sales surpassing Ford motor vehicles in 2003 to become the second in the world, surpassing General Motors in 2009, which has occupied the world's top position for nearly 80 years, and in the 12 years from 2009 to 2020, Toyota motor won six global firsts.
But the automotive industry is in the midst of a tide of transformation to smart electric, and the history of all walks of life shows that the era changes at the time when the reigning giants are at their most dangerous. Toyota Motor, which has been manufacturing in the global manufacturing industry for many years in the Toyota production mode, will be engulfed by the tide of intelligent electric vehicles, or whether it can turn the crisis into safety and come to the fore, the answer lies in the tenure of Akio Toyoda.
At the shareholders' meeting for fiscal 2020, Akio Toyoda burst into tears, saying he felt lonely. He has repeatedly and publicly admitted that at Toyota, he does not have completely the final say.
Why is Toyota lagging behind in electric vehicles, and can Akio Toyoda change this behemoth?
The unshakable "white tower"
Toyota's lagging behind in the tide of electrification can be attributed to three points: fatigue in dealing with the crisis has led to insufficient investment in research and development, the advantages of hybrid technology have led to insufficient motivation to develop pure electric technology, and family culture and large enterprise diseases have led to difficult changes.
On January 20, 2009, Akio Toyoda suddenly received a notice to attend a hastily organized press conference at Toyota Motor's Tokyo headquarters for his appointment as president, saying he felt "very scared."
After the financial crisis, Toyota's business style became more conservative.
Toyota's global sales expanded sharply before the financial crisis, from about 4.5 million units in 1996 to nearly 10 million units in 2008.
Toyota Motor also led the environmental trend with hybrid technology, and in 1997 launched the world's first mass-produced hybrid car Prius.
In addition, Toyota Motor began research and development of hydrogen fuel cell vehicles in 1992, launched the FCHV, a hydrogen fuel cell model sold in Japan and the United States in 2002, and launched a Toyota FCHV-adv model equipped with a second-generation fuel cell in 2008.
However, more than a decade after the 2008 financial crisis, Toyota motor stopped expanding, and the global auto market continued to grow, and the number one rival, Volkswagen Group, continued to expand.
By 2019, Toyota's global sales volume is still around 10 million units, unchanged from 2008, while the global passenger car market sales have increased from 68.32 million units in 2008 to 91.3 million units.
Toyota's conservative attitude stems from its business philosophy of pursuing profits rather than scale on the one hand, and on the other hand, it is the times.
Toyota lost money in fiscal 2008 and was hit by a massive recall in the United States. When Akio Toyoda went to the United States to attend the hearing, he felt that his position as president could not be saved.
Subsequently, Toyota Motor was hit by the great earthquake in Japan in 2011 and the 2012 Boycott of Japanese goods in China.
In the face of adversity, Akio Toyoda said that he had only one idea, that is, "must create profits, otherwise everything can not be talked about", and to create profits, can only be at the expense of "comprehensive reduction in research and development and equipment investment".
From fiscal year 2009 to fiscal year 2012, Toyota motor's R&D expenditure decreased significantly.
During this period, competitors' electric vehicle technology has made rapid progress.
In 2012, Tesla Model S models were launched, in 2013, BYD released the second generation of dual-mode technology, BYD's pure electric vehicle E6 began to be on the road as a taxi; in 2014, BYD plug-in hybrid Qin DM and Tang DM achieved sales of 20,000 units, and in 2015, Tesla Model X began to be delivered.
After 2016, the active investment of Chinese companies in the electric vehicle industry has highlighted Toyota's conservativeness.
Since the end of 2014, WEILAI Automobile, Ideal Automobile, and Xiaopeng Automobile have been established one after another, and Toyota Motor's Chinese partner GAC Group has also begun to build the Aean brand in 2017. At present, the pure electric vehicle platform of these companies has been iterated to the second or third generation, and continuous progress is also being made in electric vehicle charging technology and lithium battery technology.
In fiscal 2016 to fiscal 2020, although Toyota's R&D expenditure increased compared with fiscal years 2009 to 2012, the increase was not large, and it remained conservative overall.
Of course, Akio Toyoda also perceives the trend of electric vehicles, but in the face of Toyota Motors, which is already a giant, he feels helpless.
Since the launch of the Prius in 1997, Toyota Motor's research and development department has focused on hybrid power, but has always paid little attention to the development of electric vehicles.
Akio Toyoda once suggested that the R& D department try it, but the R & D department believes that the hybrid system has a motor and a battery, as long as it is applied to the electric vehicle, it can be done at any time, and it is still negative for the development of electric vehicles.
In May 2010, Akio Toyoda went to the United States to agree with Tesla President Musk that Toyota Motor would invest $50 million in Tesla and cooperate in the development of electric vehicles.
Toyota's research and development department and Tesla jointly launched a pure electric version of the RAV4 model, but the market influence was not good, the joint development was terminated, and Toyota sold all of Tesla's shares in 2016.
It was not until December 2016 that Akio Toyoda established the Electric Vehicle Business Planning Office of the President of the Municipal Government and officially began the development of electric vehicles. The developers of this organization come from Toyota Motor, Toyota Automatic Loom, Aisin Corporation, denso Corporation, and report directly to Akio Toyoda without being constrained by the other directors of Toyota Motor.
Akio Toyoda refers to Toyota's R&D department as a "white tower" and finds it difficult to communicate with it.
The white tower symbolizes an authority that is difficult to change. Akio Toyoda once asked the R&D department, "Why is the color of Toyota always so dim", the R&D department replied, "Because these colors are very popular among young people", Akio Toyoda said, "There is no way to talk about it, it seems to be saying, Uncle you shut up." ”
In terms of cutting-edge technology, Toyota Motor's R&D department is also promoting the research and development of hydrogen energy, and is also cooperating with the Japan Aerospace Exploration Agency (JAXA) to develop a manned lunar rover.
But there is still a lack of real pioneering enthusiasm. Because whether it is hybrid or hydrogen energy technology, it is the iteration and continuation of toyota's technological advantages acquired in the 1990s.
In 2021, Toyota Motor's chief engineer Teng Youzheng joined the GAC Group, and analysts commented that the reason for his job hopping was that he was infected by the enthusiasm of Chinese companies for research and development.
At present, the lithium battery electric vehicle technology route represented by Tesla has achieved obvious advantages, while Toyota Motor's hydrogen fuel cell vehicle (FCEV) has only sold 5642 units from January to November 2021.
Due to the lack of pure electric models, GAC Toyota chose to "reverse import" the GAC Aeon S model from GAC in 2019, breaking the convention that Toyota always exports models to the outside world.
Koshi Kobayashi, chief risk officer of Toyota Motor, said that among Toyota's executives and backbones, there are many people who are "unwilling to change", and Akio Toyoda has been fighting against the "big company Toyota".
In fact, even the most conscious individuals have a hard time getting rid of the influence of corporate culture, including Akio Toyoda himself.
Toyota Motor is permeated with a strong family culture, and some of Toyota's core suppliers are Toyota's family members.
For example, Aisin Seiki, which is known for producing gearboxes, toyota kogyo corporation, which produces auto parts, all have people with the surname Toyota, Denso Corporation of Japan, which is known for producing electric motors, and Toyota Tsusho Co., Ltd., and other companies have members of the Toyota family occupying the core position.
Toyota's nearly 10 million vehicles sold from January to November 2021 are almost all equipped with fuel engines, only 12,000 are pure electric vehicles, and 5,642 hydrogen fuel cell vehicles. This means that most of Akio Toyoda's family is still tied to the fate of the fuel engine.
Akio Toyoda has publicly criticized the electric car wave, saying that electric vehicles are neither environmentally friendly nor economical.
Akio Toyoda also said that if the production of fuel-engined vehicles is not allowed, 1 million of the 5.5 million industrial workers who support the Japanese auto industry will lose their jobs; at the same time, it will also affect the manufacturers of parts and components involved in engines and peripheral products.
Akio Toyoda also said that the real enemy of carbon neutrality is carbon, not engines. In May 2021, he personally drove the Toyota Corolla model equipped with a hydrogen-fueled engine and participated in the 24-hour endurance race at the Fuji International Circuit, proving that zero emissions could be achieved by replacing the engine fuel.
In contrast, at the 26th United Nations Climate Change Conference in November 2021, Ford Motor, General Motors, Mercedes-Benz, Volvo, BYD, Jaguar Land Rover and other car companies signed a letter of commitment, announcing that they would stop selling fuel vehicles by 2040.
A rift in a giant ship
Since the beginning of 2018, global car sales have ended 8 consecutive years of positive growth, turning downward, and in 2020, it has fallen sharply by 14%.
The head of Toyota's purchasing department said at the 2020 fiscal annual shareholders' meeting that before the epidemic, the market competition became more intense.
Although Toyota motor can still maintain the core indicators including net profit and sales, but some parts that are not easy to detect, but began to show bad signals.
One of the advantages of Toyota's lean production model is low inventory, but since fiscal 2017, Toyota's inventory has continued to increase.
From fiscal 2005 to fiscal year 2017, converted into renminbi, Toyota Motor's inventory never exceeded 150 billion yuan. By fiscal 2020, it has increased to 172 billion yuan.
Toyota's inventory turnover days also increased from an average of 32.4 days in fiscal years 2010 to 2016 to 37.1 days in fiscal year 2017, and to 45.2 days in fiscal year 2020.
In fiscal 2020, Toyota Motor's accounts receivable turnover days fluctuated abnormally.
Accounts receivable turnover days is used to measure the length of time the company recovers the account of the indicator, the number becomes larger, indicating that the funds are occupied by foreign units for a longer time, to some extent also shows that the sales of automotive products have become worse, and the situation of selling goods on credit to dealers has become more serious.
Toyota Motor's accounts payable turnover days also showed an anomaly.
This is a measure of how long it takes a company to pay off its suppliers' arrears, and the larger the number, the longer it will take for suppliers to pay for their payments.
In comparison, the two indicators of Volkswagen, Ford Motor, Honda Motor, Great Wall Motor and Geely Automobile have not fluctuated much from fiscal years 2018 to 2020.
With brand advantages and industrial chain status, automobile companies can smooth their own operations and performance by adjusting the relationship with upstream and downstream enterprises.
At the 2020 shareholders' meeting of Toyota Motor, some shareholders pointed out that although Toyota Motor's performance in 2020 is very good, its suppliers and dealers are not good, and in fact, Toyota is a winner.
Akio Toyoda replied that if no one can win, Japan's auto industry will lose support, and Japan will lose support.
The sudden change in indicators that have not changed for many years reflects the decline of the fuel vehicle market under the wave of electric vehicles.
Since 2020, Akio Toyoda has also frequently used words such as "live" and "survive" in public, indicating that Toyota has indeed entered an extraordinary state.
Electric vehicles are on the rise, with Tesla's global sales increasing by 96 percent in the first three quarters of 2021 to 626,000 units. From January to November 2021, Toyota Motor sold only 12,000 lithium-ion battery pure electric vehicles (BEVs) and only 103,000 lithium-ion plug-in hybrid vehicles (PHEV), negligible in its nearly 10 million vehicles;
While hybrid models (HEVs), which account for about 22 percent of Toyota's sales, grew 30 percent year-over-year in January-November 2021, catching up with the boom in the electric vehicle market, their technological advantages are declining.
Previously, the industry commented that there are only two hybrid systems in the world, "Toyota's hybrid and other hybrids", however, Chinese auto companies have successively released their own hybrid systems in 2021.
In December 2021, GAC Group, which has been using Toyota hybrid technology, demonstrated its self-developed hybrid system, Geely Automobile released the hybrid electric drive DHT Pro, and Great Wall Motors also released its self-developed DHT hybrid system in early 2021, all of which said that their fuel-saving performance and power performance were stronger than those of the Japanese.
In addition, the life cycle of the hybrid system is subject to the policies of each region, and the prospects are not optimistic.
In China, hybrid models (HEVs) cannot be listed on the green card; in Norway, the sale of fuel vehicles, including hybrid models equipped with fuel engines, will be completely banned by the end of 2025 at the latest, and the sales of pure electric vehicles in Norway will reach 74% in November 2021.
The number of countries and regions announcing the ban on the sale of fuel-engined vehicles in the coming years is increasing, and there is a trend of advance in time. Of the nearly 10 million cars that Toyota sells each year, almost all of them are currently equipped with fuel engines.
Toyota has reached a time when it has to change.
Akio Toyoda's counterattack
When Akio Toyoda reorganized the company's management and appointed six vice presidents in 2018, he took the six vice presidents to the Buddhist hall in the Toyoda Sakichi Memorial Hall and pressed the blood handprint together, calling himself the "Seven Samurai" ever since.
Even the business card titles of several people have been changed, such as the business card title of chief risk officer and vice president Kobayashi Kobayashi, and only the three words "big butler" are left.
The "Seven Samurai" vowed to sacrifice their lives in front of the altar to "create a new Toyota Group."
Akio Toyoda's struggle with the "big company Toyota" has set up a posture.
In the face of Toyota's R&D department's "White Tower" sluggishness in cutting-edge technology research and development, Akio Toyoda drew the sharp blade of Woven planet Holdings.
Akio Toyoda made a statement at the Consumer Electronics Show (CES) in January 2018 to transform Toyota into a mobility service company.
Such a statement was not routinely issued at auto shows, nor was Toyota's vice president in charge of research and development informed.
In Akio Toyoda's view, with the rise of new technologies such as vehicle networking functions, automatic driving, shared services, and electrification, the automotive industry has formed a solid business model including supply, production, and sales in the past hundred years, and fundamental changes may occur, and the automobile industry will undergo changes that have not been encountered in a century, so Toyota Motor must transform.
After the statement of transformation, Akio Toyoda immediately took action.
In March 2018, Toyota Motor established the Toyota Research Institute Advanced Development, Inc. Toyota internally calls it the TRI-AD), and the main purpose is to strengthen Toyota's software capabilities.
In 2016, the Electric Vehicle Business Planning Office, which was established to develop pure electric vehicles, was established under the direct supervision of the President, and was also included in the official project and handed over to the Toyota Research Institute Advanced Technology Research Center.
On July 28, 2020, the research center announced its reorganization into a holding company and two business companies.
Akio Toyoda announced that he has invested heavily in the new company in his personal name.
Woven CORE is responsible for the development of autonomous driving technology, and Woven Alpha is leading the "Woven City" that experiments with new technologies.
Construction of the "Woven City" began on February 23, 2021, which is a testing ground for Toyota Motor to verify advanced technologies such as autonomous driving and robotics, and plans to build a demonstration city that allows people to live, work, play and live on about 708,000 square meters of land at Toyota Motor's former Higashi Fuji plant in Shizuoka Prefecture, Japan.
Akio Toyoda said that the transformation into a mobility company must be based on the weaving city and carry out various experiments.
In terms of electric vehicles, Akio Toyoda also posed to do a big job.
He decided to spend more money on developing pure electric vehicles.
In the nine years from fiscal year 2012 to fiscal year 2020, Toyota's R&D expenditure totaled 9.1 trillion yen, of which only 40% was spent on cutting-edge fields such as electrification, about 3.6 trillion yen, of which even less investment was spent on pure electric vehicles.
According to the electric vehicle strategy conference, in the nine years from 2022 to 2030, Toyota Motor will invest a total of 8 trillion yen in electrification transformation, of which 4 trillion yen will be used for pure electric vehicle models (BEVs), 4 trillion yen for hybrid models (HEVs), plug-in hybrid models (PHEV), and hydrogen fuel models (FCEV).
Toyota Motor has also begun to lay out new energy vehicle production capacity in China, and the investment has increased significantly. GAC Toyota plans to invest 11.3 billion yuan to start production of 400,000 new energy vehicle projects in 2022; compared with 2016 to 2020, GAC Toyota's fuel vehicle production capacity will only expand by 220,000 units, with an investment of about 5 billion yuan.
Toyota Motor Corporation plans to introduce 30 all-electric vehicle models (BEVs) by 2030, with a total sales volume of 3.5 million electric models by 2030, and plans to convert Lexus to a pure electric brand and achieve sales of 1 million pure electric vehicles by 2030.
In terms of batteries, Toyota Motor plans to invest 2 trillion yen in lithium batteries and achieve a production capacity of 280 GWh by 2030.
Toyota motor announced in October 2021 that it plans to invest $3.4 billion in lithium batteries in the United States by 2030, including a $1.29 billion battery manufacturing plant in North Carolina, which is expected to start production in 2025, each of which can supply lithium-ion batteries for 200,000 cars.
It remains to be seen how effective Akio Toyoda's counterattack will be.
First of all, due to the limitation of his own culture, Akio Toyoda's reform of Toyota can only be gradual.
Even Akio Toyoda's latest plan is still more conservative than his peers. Toyota plans to sell 3.5 million pure electric vehicles by 2030, which means that 35% of sales are pure electric at the current scale.
In contrast, Honda has clearly proposed a plan to abandon fuel engines, that is, pure electric vehicles and fuel cell vehicles will account for 40% of sales in 2030; Nissan plans to account for more than 50% of pure electric models in 2030; Volkswagen is 50%; and Ford is 40%.
Second, due to previous delays, it is difficult for costs to fall quickly.
Toyota Motor's CPOD, an ultra-small pure electric vehicle, was officially released to the public on December 23, 2021, and the minimum price is 1.65 million yen, equivalent to 82,500 yuan. In comparison, the lowest price of wuling hongguang MINIEV, a Chinese automobile brand of the same grade, is only 28,800 yuan.
At the december 14 press conference, Toyota motor expects to halve the cost of batteries by 2030, and it will take 5-10 years for the price of electric vehicle products to be significantly reduced.
At present, the price of Toyota plug-in hybrid models sold in China, including the Corolla Dual Engine E+, RAV4 Rongfang Dual Engine E+, etc., is about 100,000 yuan more expensive than the price of the fuel version. In comparison, BYD's plug-in hybrid models have achieved the same price as the same grade of fuel vehicles.
Remarks
1. The main sales data in the article comes from the Toyota Motor International website, which is a retail caliber.
2. The factual narrative and executive quotations of Toyota Motor in the article come from the "Toyota Times" column of Toyota Motor International website and the book "Akio Toyoda" by Japanese writer Osamu Katayama.
3. The data sources in the article also include Wonder Data, Volkswagen Group, Ford Motor, Honda Motor Annual Report, etc.
The author is a researcher at Caijing, editor: Mark