Toyota Revs Up Race With Tesla

How the bZ4X sells will be a critical test of Toyota’s potential to parlay its two-plus decades of experience with gas-electric hybrids into success with the all-electric technology that most people in the automotive industry expect to dominate in the future, albeit on a highly uncertain timeline. Given the company’s scale, its success or failure also could have an outsize influence on consumers’ adoption of EVs generally.

Pundits haven’t been overwhelmed. The consensus view seems to be that the bZ4X performs well enough but offers little to push the envelope or otherwise stand out in an increasingly crowded field.

“There’s nothing groundbreaking or particularly clever,” says Alistair Weaver, editor in chief at data provider and car reviewer Edmunds. He also laments the absence of a front trunk or “frunk” where the engine would otherwise be, and the playing down of “one-pedal driving” through an accelerator that brakes when lifted—both signature EV features. Drivers of the bZ4X can enable one-pedal driving, but the braking reportedly isn’t as strong as on some models.

Yet all this fits with Toyota’s brand, which stands for very different things than Tesla’s. The Japanese company has long given priority to safety, affordability and reliability over excitement. A starting price of $42,000 is toward the lower end of the range, and Toyota says the bZ4X’s battery should retain 90% of capacity after 10 years. The company’s growth over decades to become the global market leader suggests it knows what many consumers want—perhaps better than car reviewers and early adopters, who like cool stuff to talk about.

If it proves popular, the bZ4X might give the company an easier time with EV-obsessed politicians. Toyota argues that focusing on battery-electric vehicles alone isn’t the best approach to reducing carbon emissions from driving. It has a point, given the constraints in mining battery materials and rolling out renewable power, but the argument is clouded by the impression that Toyota is talking its own hybrid-heavy book.

Investors, too, were frustrated with the company’s cautious EV strategy as Tesla’s market value rose to a peak of $1.2 trillion late last year—more than four times Toyota’s at the time. Chief Executive

Akio Toyoda

responded in December with commitments to invest more in EVs and accelerate their rollout. The company wants to sell 3.5 million EVs by 2030.

Tesla’s market value has since almost halved, taking a bit of pressure off incumbents. But few doubt that batteries will gradually replace engines. A fifth of respondents to this year’s global survey by consulting firm EY said their next car would be an all-electric vehicle, up from 12% last year and 8% in 2020—though the numbers in the U.S. are lower.

The bZ4X offers investors the first real evidence for how well equipped the world’s largest auto maker is to handle the industry transition. Much is riding on its success.

Write to Stephen Wilmot at [email protected]