The story of two automakers: GM and Toyota take different electric roads in China

Toyota (7203.T) pioneered the world’s most successful hybrid car, but when it comes to pure electric vehicles, it has to catch up, especially in China.

The Hong Guang Mini EV, a simple little car made by a General Motors (GM.N) joint venture that costs less than $ 5,000 is a huge hit in the world’s largest auto market, while Toyota has yet to launch. your own small, low vehicle. -Cost electric vehicle in China.

Toyota, the world’s largest automaker, will unveil its solution at the Shanghai Auto Show on April 19: a new universal platform for electric vehicles (EV) called e-TNGA that will support a variety of models, from small models to. Large SUV.

It will also showcase its midsize electric sport utility vehicle (SUV) concept, based on the e-TNGA platform, which will be sold worldwide in a couple of years, two people familiar with Toyota’s plans said.

Toyota executives have long called for a small electric vehicle, but the fact that it goes first with a midsize SUV is a sign of the challenges it still faces in producing small, low-cost electric vehicles that are also competitive. comfortable and safe.

With mounting pressure on automakers to cut emissions, Toyota is striving to produce electric vehicles that can compete globally with the Mini EV, Tesla’s high-end sedans (TSLA.O), mid-range models. Volkswagen (VOWG_p.DE) and Renault (RENA). .PA) and stylish electric vehicles from Chinese startups like (NIO.N) and Xpeng (XPEV.N).

While Toyota’s hybrid Prius became a global bestseller, one of its early efforts to develop a small electric vehicle, the eQ, was a failure.

After selling around 100 eQ in 2012, Toyota abandoned it due to concerns about the limits of electric vehicles, such as their high price, short range and long charge time.

The eQ, an electric version of Toyota’s mini iQ, cost 3.6 million yen ($ 33,000), about the price of its midsize Camry.


A key issue in developing a small, affordable electric vehicle is the need to use electric powertrains that have yet to reach parity with their gasoline counterparts, people familiar with Toyota’s plans said.

Putting bulky batteries in a small car is another challenge.

Many electric vehicles have high floors because the batteries are stacked underneath, leaving automakers the option of making the cars much taller to give passengers ample space, or keeping them lower and sacrificing comfort. sources said.

Toyota does not want to compromise on quality, comfort or performance with its small electric vehicle, but is aware that it needs to develop expertise in reducing engineering costs to deliver such a vehicle priced well below $ 20,000. Dollars.

That experience is precisely what GM used to build the Mini EV, which can cost as little as 28,800 yuan ($ 4,410).

Their joint venture, SAIC-GM-Wuling (SGMW), is China’s largest manufacturer of single commercial vans starting at about 30,000 yuan and leveraged that cost control knowledge.

“Basically, Wuling has just had to replace the gasoline engines in those commercial trucks with simple electric powertrains,” said Yale Zhang, director of consulting firm Automotive Foresight.

He expects sales of the Mini EV and its luxury version Macaron to hit 500,000 this year.

Zhou Xing, SGMW vice president in charge of sales and marketing for Wuling and Baojun, said he was ready to launch four small electric vehicles in early 2022 under his brands, bringing the model range to 10 just as more rivals enter the market. .


The Mini EV also takes shortcuts that would not be allowed in the United States or Europe, underscoring the challenge Toyota faces in developing a viable rival that is easily driven in a crowded city and is still high in quality and performance.

The Mini EV only has one airbag, for example, with none for the passengers or on the sides to protect the occupants if it rolls.

The car has an antilock braking system but does not have stability control technology, even though its relatively tall and squat profile makes it prone to rolling over when cornering at high speeds, two people familiar with its development told Reuters. .

“First of all, the product meets all China’s vehicle safety requirements. The Hong Guang Mini EV is basically a transportation tool that helps people get from point A to B in city traffic. It is very unlikely to drive this car at high speeds, “said SGMW’s Zhou.

The straightforward approach certainly hasn’t affected its appeal.

Launched in July, cost-conscious Chinese customers and young, trendy urbanites are buying around 100,000 Mini EVs per quarter, making it one of the top EV sellers in China.

Some younger drivers are buying it and other Wuling cars in part after a video of a Wuling pickup skillfully racing down a winding mountain road went viral. For many, seeing a basic Chinese pickup truck doing complicated maneuvers made them feel national pride.

“I am proud of what Chinese-made vehicles like Wuling cargo vans can achieve,” said Huang Peixian, 26, a small business owner in Shantou city in Guangdong province.

“When I saw the Hong Guang Mini EV, I thought this might be a good car for me,” he said. “I am not only attracted to the car because of its low price, it is a lot of fun to drive.”

Many drivers personalize their Mini EVs with a new paint job and sleek headlights and taillights. Some are even customizing their other cars, like Audis and BMWs, with Wuling decals and badges.

Huang tried his best, turning the interior of his Mini EV pink and sprinkling characters from the Japanese cartoon series Chibi Maruko-chan on the white exterior.


Toyota’s electric SUV will be the first car produced by its new zero-emission vehicle design division in Japan, known as the ZEV Factory.

However, to get the low-cost know-how it needs, it turned to Chinese car and battery maker BYD (002594.SZ) through a research and development joint venture that started last year.

The plan is to use BYD’s expertise in building small electric vehicles and some key components, including batteries.

But there’s still a good chance Toyota will use electric powertrain technology, a combination of motor, inverter and gears, called the e-Axle, made by its subsidiary BluE Nexus, according to one of the people familiar with Toyota’s plans.

The Hong Guang Mini EV also plays an important role for GM and SAIC, generating credits for green vehicles. Automakers in China must make enough new energy vehicles (NEVs) to get credits to offset their production of combustion-engine cars.

The success of the Mini EV means that GM and SAIC have the ability to sell credits to rivals or produce more larger, more luxurious gasoline vehicles without being penalized.

Zhang from Automotive Foresight also said that the green credit system means that the Mini EV can be very competitively priced to the point where it hardly makes any profit.

SGMW’s Zhou declined to say whether the Mini EV makes money or how much he makes from green credits.

“We have seen quite a few companies come to us and buy loans from us. But we don’t want to reveal who they are,” he said.

The two sources familiar with Toyota’s plans said it did not plan to lose money on the retail price of its small electric vehicle or take advantage of green credits to make it more competitive.

A company spokesman declined to comment on whether Toyota had enough Chinese NEV loans or would consider selling them as an integral part of its strategy.

($ 1 = 108.9200 yen)

($ 1 = 6.5280 Chinese yuan renminbi)

Our Standards: The Thomson Reuters Trust Principles.


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