A cheap Toyota EV? Not right now, the company says

If you were waiting for a smaller, cheaper Toyota electric car, you may have to keep waiting. Toyota has no current plans to launch a cheap EV despite demand building.

Toyota says no small, cheap EV is in the works

Although many automakers, including VW, Stellantis, and Kia, have revealed plans to launch low-cost EVs under $30,000 (£25,000), Toyota says not so fast.

Toyota’s European product development boss, Andrea Carlucci, told Autocar that battery costs make a cheap EV unlikely.

When asked why Toyota has no plans to address the market, Carlucci said there’s a “premium attached to electric cars.” He explained that there needs to be a “substantial shift in the cost of batteries” before a cheap Toyota EV can be made at scale.

Carlucci said Toyota “cannot achieve that level at the moment.” He added that the Urban Crossover will be the cheapest EV in the near future.

Toyota revealed the Urban electric SUV, saying the concept is a “close-to-production” design for the new EV coming this year.

It will be offered in two battery options. The base model will start at around $40,400 (£32,000).

Carlucci noted a cheap Toyota EV is not out of the question, just not anytime soon. “I didn’t say we don’t need an offer there – I’m just observing where the market is today.”

Toyota’s European product development boss said the offer for low-cost EVs on the market “is limited.” He suggested automakers are sacrificing range for price. Carlucci also hinted at an electric Yaris replacement in the future.

Electrek’s Take

It’s interesting to see Toyota backing away from smaller, low-cost EVs. Toyota is best known for the Prius hybrid, after all.

Toyota could miss an opportunity with a brand name built on smaller, more affordable cars. With rivals like VW planning to launch its ID 2all electric car, starting at around $27,000 (€25,000), Toyota could risk giving up market share as the industry transitions to electric.

The automaker claims to be launching new EV batteries that offer more range and faster charging at a lower cost. But, these are not expected to launch until 2026, at the earliest.

By then, Toyota could fall further behind. Toyota (including Lexus) sold nearly 9.4 million vehicles globally last year. Only 95K, or 1% of them, were EVs.

In comparison, VW sold over 394,000 EVs last year. That’s around 9% of its sales. Other rivals, like Hyundai, BMW, Mercedes, and Volvo, are already hitting double-digit EV sales.