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Although Toyota expects record growth this fiscal year, it’s cutting its EV sales forecast by nearly 40%. In Toyota’s latest questionable strategy shift, the company will lean into hybrids to “avoid the price competition” in the EV market.

Toyota released its Q2 2024 fiscal results Wednesday, showing growth across the board. Through the first half of the fiscal year, Toyota (and Lexus) sales reached 4.7 million, up 114% from last year.

The automaker recorded sales growth across all regions. Electrified vehicle sales accounted for 35.3% of total sales. However, HEVs carried the load with 1.7 million sold compared to only 59,000 battery electric vehicles.

Despite issuing new guidance, Toyota expects a lower share of EV sales. The company still expects to sell 9.6 million vehicles this fiscal year but with a significantly lower share of electric cars.

Toyota cut its EV sales forecast from an expected 202,000 to only 123,000. That’s almost a 40% difference.

The company said the lower forecast is “reflecting the decline in the Chinese market.” Toyota’s CFO Yoichi Miyazaki mentioned on the company’s earnings call that the adjustment was due to the intensifying EV price war in China (via Automotive News).

Toyota-EV-sales-forecast
Toyota bZ3 electric sedan in China (Source: FAW-Toyota)

Toyota raises HEV, lowers EV sales forecast

Instead, the Japanese automaker will lean into its heritage of HEVs. Miyazaki said this is “one of the ways we can avoid the price competition” that’s intensifying in China.

Toyota has already cut prices in the region as it looks to compete with market leaders like BYD and Tesla. The company also laid off workers through its joint venture with China’s Guangzhou Automobile Group (GAC).

Toyota-EV-sales-forecast
Toyota bZ4X electric SUV (Source: Toyota)

Hybrids already account for around 28% of Toyota’s global sales. Despite lowering its EV sales forecast, Toyota said it expects to sell about 3.6 million HEVs, up from 3.5 million.

It also raised its PHEV target to 141,000 from 137,000. Toyota expects electrified sales to account for 37.2% of total sales, up from 35.5% currently.

Toyota-EV-sales-forecast
Toyota vehicle sales forecast (Source: Toyota)

The Japanese automaker also raised key financial guidance. Toyota expects operating income to reach $30 billion (4.5 trillion yen), representing a nearly $10 billion increase (1.5 trillion yen) from its previous guidance. Meanwhile, operating margins are expected to be around 10.5% from 7.9% previously.

Electrek’s Take

Toyota cutting its EV sales forecast comes after US automaker Ford and GM made similar moves.

Ford said it would delay around $12 billion in EV manufacturing investments last week. It’s also putting off its 600,000 EV production goal for another year.

Meanwhile, GM is pushing back production of the Equinox EV, Chevy Silverdo RST EV, and GMC Sierra EV Denalli to “protect pricing.” Honda also revealed it’s scrapping plans to build affordable EVs with GM.

As I’ve argued before, these moves are short-sighted. The EV market will go through swings, but adoptions rates will continue climbing year-over-year.

Those investing now, will reap the benefits as electric vehicles continue gaining market share.

If Toyota is lowering its EV forecast now because of the “intensiftying price war” in China, how does it plan to keep up when other major auto markets like Europe and the US see EV sales accelerate.

China is the world’s largest EV market, giving us a preview of what will likely happen globally. Buyers are looking for the latest tech and software, not outdated gas-powered hybrid models.

The move comes despite Toyota investing an additional $8 billion into its North Carolina EV battery plant. Toyota will add an additional eight BEV and PHEV battery production lines for 10 total.

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VinFast starts US deliveries of its VF9 3-row SUV, and we got a quick drive in it

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VinFast starts US deliveries of its VF9 3-row SUV, and we got a quick drive in it

VinFast delivered its first VF9 vehicles to customers in Los Angeles yesterday, kicking off US deliveries of the new 3-row electric SUV.

VinFast is a relatively new EV brand, founded in Vietnam in 2017, under the umbrella of massive Vietnamese conglomerate Vingroup. It started delivering cars to the US in 2023 with its VF8 mid-size SUV.

The VF9 is its three-row large SUV, which has been delivering in Vietnam since the 2023 model year, and also in some other Southeast Asian and a few European markets. But now it’s ready to start delivering the VF9 here in the US, and it started last night in Los Angeles.

VinFast held a small event at its US headquarters in Los Angeles to deliver the first 8 VF9s to the US market, and invited us out to the event and to have a quick look at the car.

VinFast told us that it currently has 36 dealerships in 15 states, with 13 company owned stores in California. So deliveries won’t just start right away in California, but other territories as well. However, VinFast couldn’t provide us an estimate of what the delay before delivery would be if ordering a vehicle today.

VinFast trim levels

The VF9 comes in two trim levels, Eco and Plus. The Eco model starts at $69,800 with the Plus version $4k more at $73,800. First deliveries will start with the Plus model, with the Eco coming a few months later.

But despite those somewhat high starting prices, VinFast is also offering a limited-time promotion for the first 100 vehicle deliveries to lease the Plus for $529/mo with $2,000 down. And since the VF8 has seen some really great lease deals, we could imagine the VF9 might get the same treatment after deliveries start happening in earnest.

The trim levels don’t differ significantly in drive capabilities, with the same battery and motor between the two. See the full spec sheet here.

The main differences are in a bunch of additional interior comforts on the Plus, like ventilated massaging seats, 2nd row seat heaters, seat and steering wheel position memory, rear LCD display, panoramic roof and a subwoofer. The Plus also has fog lights and cornering lights.

However, the Plus also has lower range at 291 miles instead of 330 miles, primarily due to larger 21in wheels compared to the base 20in wheels. Wheels can make a huge difference in aerodynamic efficiency, especially with different wheel cover designs.

The Plus is also about 100lbs heavier than the Eco, and can come in a 6-seat “captain’s chair” configuration, whereas the Eco only comes in a 7-seat layout.

Extremely quick first drive

We got a chance to drive the VF9 very briefly, but given that it was in the middle of LA rush hour traffic and only a few miles, this barely even qualifies for “first drive” status.

However, the vehicle felt quite spacious inside – as one would expect from a large SUV. We only sat in the seats for a few minutes, but the seat material was passably comfortable (not like the outstandingly comfortable EX90). The third row has a huge amount of headroom, but little legroom – you’re basically sitting on the floor back there, and it takes some work to get out of it, too.

The drive software does seem to have matured compared to the previous VF8 version I drove. That VF8 had horrendous throttle lag, especially when starting from 0mph, but I didn’t experience that quite so much here in the VF9. It felt better. They’re making progress.

The throttle pedal is a little weirdly jumpy though in sport mode, so despite that I set almost all EVs to sport mode and just leave it there, this might be a car that I’d drive in standard or eco more often. And hope that Vinfast continues to tweak the drive software to make it feel a little more refined. But that said, again, I’d like a chance to test this more and get a feel for it.

Power was good though not amazing, it’s a large car after all so comfort is going to be more of a premium than speed.

I like VinFast’s user interface well enough – it’s pretty well laid out, it doesn’t suffer from the lag that some other UIs do, and you can always escape to CarPlay or Android Auto if that’s your preference. Though the gathered media did experience some random faults on the 3 early-production press cars we had access to for the night, like a faulty anti-window-pinch sensor and rear hatch closure sensor.

All in all, after the relatively poor overall reviews for the VF8 and a middling experience myself when I drove one, I came away pleasantly surprised by the VF9, with a vehicle that was nicer than I expected on this very short drive. I’m still not a large SUV guy and would love to see some of VinFast’s smaller vehicles here (the VF7 is coming to the US, but I’d like to see the even-smaller ones), but as long as the arrow keeps going in the right direction and VinFast keeps improving, there could be a nice future here for Vietnam.

And that’s the thing… I really want VinFast to succeed. I like the idea of having another country join the international stage of auto manufacturing, and it would be great for Vietnam to gain some chops in the realm of complex manufacturing. The country already does well in textiles and electronics… but cars are a whole different thing. This drive was too short to draw many conclusions, but VinFast does seem to be improving from the short experience we had.


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Crude oil little changed after rallying on escalating Ukraine-Russia tensions

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Crude oil little changed after rallying on escalating Ukraine-Russia tensions

Croft: Enforcing sanctions will drop Iranian oil exports

Crude oil futures edged slightly lower on Tuesday, after rallying about 3% in the prior session on fears that the war between Ukraine and Russia is escalating.

President Joe Biden has authorized Ukraine to use long-range missiles to hit targets in Russia in a major departure from Washington’s previous position, according to media reports.

Russian President Vladimir Putin on Tuesday lowered Moscow’s threshold for using nuclear weapons.

Here are Tuesday’s energy prices as of 7:39 a.m. ET:

  • West Texas Intermediate December contract: $68.79 per barrel, down 37 cents, or 0.53%. Year to date, U.S. crude oil has declined about 4%.
  • Brent January contract: $73.02 per barrel, down 28 cents, or 0.38%. Year to date, the global benchmark has shed about 5%.
  • RBOB Gasoline December contract: $2.0133 per gallon, down 0.25%.Year to date, gasoline has fallen about 4%.
  • Natural Gas December contract: $2.950 per thousand cubic feet, down 0.77%. Year to date, gas has gained more than 16%.

Stock market futures fell on the growing geopolitical tensions, with Dow futures down more than 200 points.

Biden’s decision comes just two months before he departs office. President-elect Donald Trump campaigned on ending the war in Ukraine.

Moscow’s full-scale invasion of Ukraine roiled global energy markets in 2022 as European nations sought to end their dependence Russian natural gas.

Don’t miss these energy insights from CNBC PRO:

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Xiaomi raises delivery target yet again for its new EV, as ‘demand surges’

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Xiaomi raises delivery target yet again for its new EV, as ‘demand surges’

China’s Xiaomi has reported a 30.5% growth in third-quarter revenue for its EV business, with the company also bumping up its yearly delivery target for the SU7 series EVs to 130,000 units.

Back in May, Xiaomi – the world’s third-largest smartphone maker – had said that it planned to build 100,000 EVs by the end of the year, with the company well on its way to achieving that goal. CEO Lei Jun said on his social media account that the company was bumping up its previous target of 120,000 of its first EV as “demand surges,” reports Reuters.

Last December, Xiaomi debuted its first vehicle, the SU7, which officially launched in March, offering three versions – Standard, Pro, and Max, with the Standard starting at $30,761 – strategically about $4,000 cheaper than the price of Tesla’s Model 3 in China. A souped-up hypercar version, the Ultra, has also since been unveiled.

Xiaomi SU7 Ultra. Source: Xiaomi

Since its launch, the SU7 has been a hit in China and is set to easily surpass production goals of 100,000 units one month early. To boost that momentum, Xiaomi now expects to complete the construction of an expansion of its EV factory in mid-2025, which should ramp up its numbers even more – at least, that’s the aim.

In the third quarter of this year, Xiaomi has said that it delivered 39,790 units of the SU7, for a total sales figure from its March launch to the end of September to 67,157 units.

Huatai Securities has forecast Xiaomi will deliver 400,000 EVs in 2025, with its EV business accounting for about a fifth of its revenue compared with 8% this year, Reuters reports.

Of course, analysts have predicted the company would lose money on its SU7, to the tune of around $10,000 a vehicle, but the smartphone maker has a tidy cash reserve of $15 billion to help it weather the storm.

Xiaomi SU7
Source: Xiaomi Weibo account

While facing plenty of competition in China from the likes of BYD, the company has, for one, tremendous brand appeal to the Chinese consumer, who are already familiar with its products and user interfaces. In addition to an alluring price point, the SU7 is a connected car that syncs with other devices. Compared to other EV makers, Xiaomi, too, has an edge on software and a jumpstart on autonomous driving, which it has been testing on roads for a few years.

The company says it plans to invest $10 billion over the next 10 years in building its EV empire, reports have said. By the end of the year, the company expects to expand to 22 sales stores, 135 service centers, and 53 delivery hubs in 59 cities.


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