Toyota is losing out as the world’s largest auto market accelerates its shift to EVs. The Japanese automaker informed dealers that it plans to cut production in China with one of its joint ventures.
As China leads the auto industry’s transition to electric cars, several automakers are being squeezed out of the market.
Japan’s Toyota is the latest victim. Toyota is extending a production cut, initially planned for October and November, by another three months.
Toyota’s joint venture with FAW Group said in a letter reviewed by Reuters, “Production from December to February next year will continue to be reduced by a large amount.”
The letter added that sales to Toyota dealers will be cut to 66,000 in December, 60,000 in January, and 38,000 in February.
The move comes as the company looks to keep up in the “severe market environment” in China. Market leaders like BYD and Tesla have slashed prices all year, making it tough for other legacy automakers to compete.
Toyota pulls back as EVs take over in China
With low-priced EVs like the BYD Dolphin, starting at around $17,500 in China, Toyota and others are being squeezed out of the market.
Toyota has already announced layoffs in the region with another joint venture with China’s GAC. The JVs factory employed around 19,000 people, building models including the bZ4X.
After launching the bZ4X in China last October, the company dropped prices by 15% in February as the electric SUV failed to gain traction.
Toyota’s partnership with FAW launched its first electric sedan, the bZ3, in China earlier this year, hoping to spark demand. However, a recall over the summer derailed its momentum.
The automaker revealed plans in July to have engineers from its three joint ventures in China, BYD, FAW, and GAC, work together on a “Toyota-led development project” as it looks to catch up.
Although Toyota still ranks third after BYD and Volkswagen in auto sales in China, it’s losing market share.
According to data from the China Association of Automobile Manufacturers, Toyota sold 1.26 million cars to dealers through September, down 9% from last year. Meanwhile, BYD’s sales were up 60% during the same period.
Electrek’s Take
Toyota’s hesitancy toward EVs is costing it in the world’s largest auto market. EV makers like BYD and Tesla continue gaining market share while laggards fall further behind.
Although the transition has hit Toyota, other Japanese automakers like Nissan, Honda, and Mitsubishi are feeling the impacts even more.
Mitsubishi suspended its business in China after sales fell from over 134,500 in 2019 to only 34,500 this past year.
Nissan’s sales plummeted 20% last year, dropping it out of the top five automakers by market share.
The transition to EVs caught many automakers off guard, and many are now paying for it. China’s auto market was first, but other key markets are expected to follow.
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GreenPower Motor Company says it’s received three orders for 11 of its BEAST electric Type D school buses for western state school districts in Arizona, California, and Oregon.
GreenPower hasn’t made the sort of headline-grabbing promises or big-money commitments that companies like Nikola and Lion Electric have, but while those companies are floundering GPM seems to be plugging away, taking orders where it can and actually delivering buses to schools. Late last year, the company scored 11 more orders for its flagship BEAST electric school bus.
As far as these latest orders go, the breakdown is:
seven to Los Banos Unified School District in Los Banos, California
two for the Hood River County School District in Hood River, Oregon
two for the Casa Grande Elementary School District in Casa Grande, Arizona
Those two BEAST electric school buses for Arizona will join another 90-passenger BEAST that was delivered to Phoenix Elementary School District #1, which operates 15 schools in the center of Phoenix, late last year.
“As school districts continue to make the change from NOx emitting diesel school buses to a cleaner, healthier means of transporting students, school district transportation departments are pursuing the gold standard of the industry – the GreenPower all-electric, purpose-built (BEAST) school buses,” said Paul Start, GreenPower’s Vice President of Sales, School Bus Group. “(The) GreenPower school bus order pipeline and production schedule are both at record levels with sales projections for (2025) set to eclipse the 2024 calendar year.”
GreenPower moved into an 80,000-square-foot production facility in South Charleston, West Virigina in August 2022, and delivered its first buses to that state the following year.
Electrek’s Take
Since the first horseless carriage companies started operating 100 years ago (give or take), at least 1,900 different companies have been formed in the US, producing over 3,000 brands of American automobiles. By the mid 1980s, that had distilled down to “the big 3.”
All of which is to say: don’t let the recent round of bankruptcies fool you – startups in the car and truck industry is business as usual, but some of these companies will stick around. If you’re wondering which ones, look to the ones that are making units, not promises.
While some recent high-profile bankruptcies have cast doubt on the EV startup space recently, medium-duty electric truck maker Harbinger got a shot of credibility this week with a massive $100 million Series B funding round co-led by Capricorn’s Technology Impact Fund.
It’s been a rough couple of weeks for fledgling EV brands like Lion Electric and Canoo, but box van builder Harbinger is bucking the trend, fueling its latest funding round with an order book of 4,690 vehicles that’s valued at nearly $500 million. Some of the company’s more notable customers including Bimbo Bakeries (which owns brands like Sara Lee, Thomas’, and Entenmann’s) and THOR Industries (Airstream, Jayco, Thor), which is also one of the investors in the Series B.
The company plans to use the funds to ramp up to higher-volume production capacity and deliver on existing orders, as well as build-out of the company’s sales, customer support, and service operations.
“Harbinger is entering a rapid growth phase where we are focused on scaling production of our customer-ready platform,” said John Harris, co-founder and CEO. “These funds catalyze significant revenue generation. We’ve developed a vehicle for a segment that is ripe for electrification, and there is a strong product/market fit that will help fuel our upward trajectory through 2025 and beyond.”
The company has raised $200 million since its inception in 2021.
There is no state more associated with cars and car culture than Michigan – and the state that’s home to the Motor City has just taken a huge step into the future with the deployment of its first-ever all electric police vehicle.
The 2024 Ford Mustang Mach-E patrol vehicle is assigned to the Michigan State Police State Security Operations Section, and will be to be used by armed, uniformed members of the MSP specializing in general law enforcement and security services at state-owned facilities in the Lansing, MI area.
“This is an exciting opportunity for us to research, in real time, how a battery electric vehicle performs on patrol,” says Col. James F. Grady II, director of the MSP. “Our state properties security officers patrol a substantially smaller number of miles per day than our troopers and motor carrier officers, within city limits and at lower speeds, coupled with the availability of charging infrastructure in downtown Lansing, making this the ideal environment to test the capabilities of a police-package battery electric vehicle.”
In those tests, the EVs have impressed – but the MSP has been hesitant to commit to a BEV until now. “We began testing battery electric vehicles in 2022, but up until now hybrids were the only alternative fuel vehicle in our fleet,” said Lt. Nicholas Darlington, commander of the Precision Driving Unit. “Adding this battery electric vehicle to our patrol fleet will allow us to study the vehicle’s performance long-term to determine if there is a potential for cost savings and broader applicability within our fleet.”