- Toyota Motor Corp (NYSE:TM) is eyeing a factory floor overhaul after making sweeping changes to its leadership team as it migrates to a new, dedicated platform for battery electric vehicles.
- Koji Sato may confirm that new EV architecture is in the works at his first briefing as CEO on Friday, Reuters reports citing familiar sources.
- In his briefing, Sato will likely lay out a strategy emphasizing “diverse powertrains” while stressing that gasoline hybrids will remain critical to its business even as it ramps up EVs.
- Toyota increasingly recognizes the need to match Tesla Inc’s (NASDAQ:TSLA) design and manufacturing innovations to reduce production costs and turn its all-electric business into a higher margin one.
- If it comes to fruition, the new EV platform will result from a far-reaching review of Toyota’s 2022 electric-car strategy.
- Unlike Tesla’s massive Giga Press casting machines and other manufacturing innovations, Toyota’s current production architecture, the e-TNGA system, is not a cost-effective method.
- Sato recently attended an internal presentation that focused on the need for a dedicated battery-electric platform, a more competitive system to manage heat generated by the battery, and other innovations influenced by Tesla’s playbook.
- Environmentalists, investors, and suppliers have voiced the need for Toyota to move faster. Some suppliers look to ramp up business with other manufacturers to hedge their risk regarding EVs.
- Tesla made almost eight times the profit per vehicle as Toyota for the third quarter, partly because of its ability to simplify production and reduce cost.
- In the U.S., where EV growth is outpacing the overall market, Toyota’s lack of electric battery models appears to be hurting sales. Toyota reported U.S. sales fell by nearly 9% during Q1, while General Motors Co (NYSE:GM) saw an 18% boost.
- U.S. consumers switching to EVs mainly from Toyota and Honda Motor Company, Ltd (NYSE:HMC), data from S&P Global Mobility showed in November.
- Price Action: TM shares traded lower by 1.10% at $138.87 on the last check Thursday.
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