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Japan’s largest automaker, Toyota Motor, is laying off workers in China as the company struggles to keep up in the world’s biggest EV market.

Toyota lays off workers amid China’s EV transition

Japanese automakers are stumbling in China’s evolving auto landscape. According to a new report from Reuters, Toyota’s joint venture with China’s Guangzhou Automobile Group (GAC) laid off workers this weekend, offering them compensation.

Three workers who were affected said the move comes as the Japanese automaker is struggling in China’s ultra-competitive auto market that’s rapidly transitioning to EVs.

The joint venture’s factory in China employs around 19,000 people, producing models such as Toyota’s first EV, the bZ4X, alongside the Camry and Levin models.

Toyota launched the bZ4X in China in October 2022 with a starting price of 199,800 yuan (around $19,000). However, after several market leaders, including BYD and Tesla, cut prices, Toyota failed to gain traction.

The Japanese automaker sold 3,844 bZ4X models in China through January, representing just 0.26% of China’s EV market.

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Toyota bZ4X (Source: Toyota)

To boost sales and remain competitive, the automaker slashed prices by 15% in response earlier in February, with a new starting price of around 169,800 yuan ($24,800).

So far, the move has failed to make a difference, with EV sales falling 9% in the first six months of the year.

Despite launching its first electric sedan in China earlier this year, the BYD-powered bZ3 starting at 189,800 yuan ($27,000), Toyota (through FAW-Toyota) is recalling (not OTA) over 12.2K bZ3 electric sedans over defective rear door handles.

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Toyota bZ3 electric sedan (Source: FAW-Toyota)

After taking over for longtime leader and grandson to the company’s founder (Akio Toyoda) in April, former Lexus branding chief officer Koji Sato said Toyota would need to act urgently to keep up in China’s EV market.

After seeing the impact of EVs at the Shanghai Auto Show, Sato explained:

We need to increase our speed and efforts to firmly meet the customer expectations in the Chinese market.

Meanwhile, Toyota is not the only Japanese automaker suffering in China amid the country’s shift to EVs.

Toyota-EV-China
Former CEO Akio Toyoda with Toyota’s EV concepts (Source: Toyota)

China’s EV market takes a toll on Japanese automakers

According to the China Association of Automobile Association, Japanese automakers’ market share in the region has fallen from 20% last year to 14.9% in the first half of 2023.

Electric vehicle sales in China reached over 2 million through the first five months of the year, up 51.5% YOY as buyers continue adopting EVs at a record pace.

Japanese automakers, who have been arguably the biggest laggards in the EV market, are feeling the pinch the most.

For example, Mitsubishi Motors revealed in a memo last week it was suspending operations in China indefinitely after sales fell drastically. The memo (via Bloomberg) stated:

In the past few months, management and shareholders have tried to the best of our ability, but due to market conditions and with great reluctance and regret, we must seize the opportunity to transition to new energy vehicles. The company will resurrect after going through trials and tribulations.

After peaking at over 134K in 2019, Mitsubishi’s sales have fallen significantly, with only 34.5K vehicles sold in 2022. The decline in sales correlates with China’s booming EV market, fueled by clean energy incentives and other government initiatives.

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Mitsubishi China sales (Source: Bloomberg)

Nearly all Japanese automakers, including Honda, Mazda, and Nissan, are seeing sales fall in China due to a lack of electric vehicle models to compete with domestic automakers.

Sales of Chinese brands accounted for 53% of the market through the first half of the year as domestic EV makers like BYD, NIO, Li Auto, and XPeng continue to grab market share with unique models in essentially every segment.

Electrek’s Take

Although Electrek has been saying it for years, Japan’s reluctance to produce electric vehicles is already starting to cost them.

China is the world’s leading EV market as the industry continues to adopt electric cars at a record pace.

Last year, a Climate Group report warned Japan could risk a 14% drop in GDP if it failed to boost EV output, and it continues to look more and more apparent that’s the direction we are headed.

Japanese automakers are not the only ones feeling the heat. Volkswagen, which has been a leader in China, saw sales drop 3.6% last year and was surpassed by BYD in passenger car sales for the first half of the year.

In light of this, most automakers mentioned here have recently ramped up EV efforts, including investing in battery tech, dedicated EV platforms, and more efficient models.

Japan is increasing support to advance storage battery tech with over 330 billion yen ($2.3B) in subsidies. Toyota is set to receive nearly 120 billion yen ($847M) of it to fuel its recently revealed EV battery plans.

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Vietnam setting bans on gasoline motorcycles next year, followed by cars

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Vietnam setting bans on gasoline motorcycles next year, followed by cars

Vietnam is taking bold steps to clean up its streets – and quiet them down. Starting next summer, the major downtown areas of Hanoi will ban all gasoline-powered motorcycles as part of a program to cut down on emissions.

The plan will go into effect on July 1, 2026, and then will expand the following year to cover more districts outside of downtown, and eventually include gasoline-powered cars as well. Other major cities like Ho Chi Minh City and Da Nang are now studying similar measures.

The plan is part of Vietnam’s national goal to phase out gas-powered two-wheelers entirely by 2045. And in a country where motorcycles are the lifeblood of daily transportation, with an estimated 72 million of them on the road, this marks a seismic shift.

The first phase of the ban will cover the Hoan Kiem and Ba Dinh districts of Hanoi within the Ring Road 1. These central areas are known for dense traffic, high pollution levels, and a thriving tourism industry. Officials hope that banning gasoline-powered motorbikes will reduce noise, smog, and carbon emissions while nudging residents toward cleaner electric alternatives.

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For now, the ban only affects motorcycles, but city officials have confirmed that it will extend to gasoline-powered cars in later phases. And while many Vietnamese cities have flirted with the idea of regulating vehicle emissions before, this marks the first concrete plan with a clear timeline. Ho Chi Minh City, the country’s largest urban area, is closely watching Hanoi’s progress and is said to be considering following suit.

Electric motorcycles and scooters are already a fast-growing market in Vietnam, led by homegrown companies like VinFast and Selex Motors. VinFast claims to have sold over 160,000 electric scooters as of early 2024, and Selex is rapidly expanding its battery-swap station network. But so far, electric two-wheelers only account for around 5% of the total market.

That number could soon change.

As gas-powered vehicles begin to disappear from urban centers, electric models may finally gain the upper hand. The government is also exploring support policies like financial incentives and improved charging infrastructure, both of which are key to getting more people to switch.

Still, there are hurdles. Many Vietnamese riders are hesitant to adopt electric bikes due to range anxiety, high upfront costs, and a lack of charging stations. But with regulatory pressure increasing and electric models becoming more affordable, the shift looks more like a matter of “when” than “if.”

Electrek’s Take

Vietnam banning gas-powered motorcycles is a big deal, and not just for local air quality. It’s also a major signal to the broader Southeast Asian market, where motorcycles vastly outnumber cars. If Vietnam can pull this off, it could become a model for electrifying personal transport in developing countries. Keep an eye on this one.

Each time I’ve visited Shanghai, for example, I’m amazed at how a pack of 30-40 motorcycles and scooters can whizz by with nothing but wind noise. China has set the example on how cities can clean up, quiet down, and improve their quality of life by mandating an end to gasoline-powered motorcycles. If other countries can replicate it in big cities, the improvement to local and global air quality would be massive, and that comes on top of all the hyper-local benefits like reductions in noise and urban grime.

That being said, one year is an incredibly fast timeline to shift literally millions of motorcycles to electric. It also doesn’t appear to address the financial burden this will put on residents who will have to replace their vehicle, even if locally produced electric scooters can be made affordable. I’ll be watching this one intently to see how officials can address these issues and if they can maintain this tight deadline. If they can pull it off, though, the face of major Vietnamese cities could change completely.

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Manitou and Hangcha commit to heavy equipment battery production JV

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Manitou and Hangcha commit to heavy equipment battery production JV

French equipment manufacturer Manitou has committed to a joint venture with Chinese forklift manufacturer Hangcha that will see the two companies develop and manufacture advanced lithium-ion batteries to support the electrification of the heavy material handler space.

Manitou is well-known in the West, so they need no introduction. Hangcha, though, is arguably just as capable of a company, having opened its first forklift plant in 1956, manufacturing others’ designs under license. They developed their own, in-house material handler in 1974, and have racked up hits ever since. Hangcha is currently the world’s eighth-largest manufacturer of industrial vehicles globally (sounds wrong, but here’s the source).

The plan for the JV is to upgrade the two companies’ deployed fleets of existing lead-acid battery-powered vehicle with longer lasting lithium-ion (li-ion) batteries to expand their operational lifespan. From there, the focus could switch to diesel retrofits and, eventually, the joint development of entirely new products.

“Deepening strategic cooperation with Manitou Group and jointly establishing a lithium battery joint marks a new phase in the partnership between the two sides, which is a milestone in Hangcha global industrial layout,” explains Zhao Limin, Chairman and General Manager of Hangcha Group. “Leveraging Hangcha’s core technological and manufacturing strengths in lithium battery solutions, we will collaboratively enhance solution capability of new energy industrial vehicle power systems. This partnership perfectly aligns with our shared objectives to accelerate electrification transformation and drive sustainable development, while providing robust support to the broader industrial vehicle market.”

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Manitou MHT 12330


MHT 12330 with 72,750 lb. lift capacity; via Manitou.

Once production begins, the joint venture factory will play a key role in supporting Manitou Group’s “LIFT” strategic roadmap. LIFT aims to expand Manitou’s electric vehicle lineup of telehandlers and forklifts, and have EVs account for 28% of total unit forklift sales by 2030. Hangcha Group, meanwhile, has publicly stated its intention to become 100% electric by the end of 2025.

This joint venture plans to recruit employees including engineers, operators, sales representatives and after-sales service technicians. Le Mans Metropole will support the recruitment and local integration and training of future employees.

SOURCE | IMAGES: Manitou; images by Manitou, via Belkorp AG.


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With another tariff deadline looming, these 10 things are going the right way for stocks

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With another tariff deadline looming, these 10 things are going the right way for stocks

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