Toyota

EXCLUSIVE Toyota turns to Chinese technology to achieve its electric holy grail

EXCLUSIVE Toyota turns to Chinese technology to achieve its electric holy grail

  • Toyota’s new China-only electric sedan will hit the market in late 2022
  • New electric vehicle set to join Toyota’s ‘bZ-series’ electric lineup
  • The car will use BYD’s revolutionary LFP Blade battery
  • Part of a larger effort to learn BYD’s low-cost know-how

BEIJING, Dec 3 (Reuters) – Toyota Motor Corp (7203.T) will launch an all-electric small sedan in China late next year, after turning to local partner BYD (002594.SZ) for a key technology to finally offer a car that is still affordable. spacious dressing room, four sources told Reuters.

Two of four people familiar with the matter described the car as an electric holy grail for Toyota, which has struggled for years to offer a small electric vehicle that’s both cost-competitive in China and doesn’t compromise on comfort.

The sources said the breakthrough was mainly due to BYD’s space-saving lithium-iron-phosphate (LFP) blade batteries and lower-cost engineering know-how – a game-changer for a Chinese company whose popular F3 sedan was inspired by Toyota’s Corolla. back in 2005.

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Little known outside China at the time, BYD, or “Build Your Dreams”, hit the headlines in 2008 when Warren Buffett bought out a 10% stake and has since become one of the biggest manufacturers of so-called new energy vehicles. in the world. .

Toyota’s new electric vehicle will be slightly larger than its compact Corolla, the world’s best-selling car of all time. A source said it was considered “a Corolla with a larger rear seat section”.

It will be unveiled as a concept car at the Beijing Auto Show in April and will then most likely be launched as the second model in Toyota’s new bZ series of all-electric cars, although it will only go on sale. in China at the moment.

“The car was fitted with BYD battery technology,” one of the sources told Reuters. “It more or less helped us solve the problems we were facing by offering an affordable small electric sedan with a spacious interior.”

It will be placed below high-end electric vehicles such as Tesla’s Model Y (TSLA.O) or the Nio ES6, but above the ultra-cheap Hong Guang Mini EV, which starts at just $4,500 and is now the best-selling electric vehicle in China.

Two of the four sources, all of whom declined to be named because they are not authorized to speak to the media, said the new Toyota would be offered at a competitive price.

One said it would likely sell for less than 200,000 yuan ($30,000), aiming for a segment of the Chinese market that Tesla is expected to target with a small car within the next two years.

“We don’t comment on future products,” a Toyota spokesperson said. “Toyota sees battery electric vehicles as a path to help us achieve carbon neutrality and is committed to developing all types of electrified vehicle solutions.”

A BYD spokesperson declined to comment.

‘ALL A LITTLE DOWN’

The fact that Toyota was forced to turn to BYD to solve its low-cost electric vehicle problem shows how the competitive balance in the global auto industry has shifted over the past decade.

When the quality of Chinese vehicles was considered below average, global automakers weren’t too worried about not being able to compete on price and let Chinese companies control the domestic market for cheap, no-frills cars.

But times have changed.

Toyota executives began to worry in 2015 when BYD launched its Tang plug-in hybrid, with significant improvements in style, quality and performance. Most concerning was that it was still around 30% cheaper than comparable Toyota models.

There was a critical turn of events in 2017 when Toyota’s top engineering leaders, including then-Executive Vice President Shigeki Terashi, drove several BYD cars such as the Tang onto its home ground. testing in Toyota City, near its headquarters in Japan.

Terashi then went to BYD’s headquarters in Shenzhen and drove a prototype of his Han electric car.

“Their long-term quality is still a question mark, but the design and quality of these cars showed levels of maturity, yet they were much cheaper than comparable Toyota models,” said one of the four. sources, who took part in the test drives.

“We were all a little floored by that.”

Two of the sources said BYD’s assessments prompted Toyota to form its research and development (R&D) joint venture with BYD last year. Toyota now has two dozen engineers in Shenzhen working side by side with about 100 BYD counterparts.

BLADE WINNER

Toyota’s new electric vehicle comes at a time when it is under fire from environmental groups who maintain it has not committed to zero emissions. They say Toyota is more interested in extending the commercial utility of its successful hybrid technology.

Toyota executives say they’re not against battery electric vehicles (BEVs), but say that until renewables become more widely available, they won’t be a magic bullet for reducing carbon emissions.

Nevertheless, Toyota has created a dedicated zero-emission car division in Japan called ZEV Factory and is developing safer and less expensive battery technologies, including solid-state lithium-ion cells that would dramatically increase the range of an electric vehicle. .

While Toyota has long advocated a bypass that doesn’t compromise on comfort as the best way to popularize BEVs, it has struggled to produce such a car.

One problem stems from the need to stack heavy, bulky batteries under the floor, as they eat up the interior unless the roof is also raised – which is why many smaller EVs are SUVs.

In 2018, Toyota briefly explored the idea of ​​a battery business with BYD. This and subsequent interactions led Toyota engineers to discover BYD’s LFP Blade battery. They described it as a game changer as it was both cheaper and freed up space.

“This is a ‘scales falling from my eyes’ type of technology that we initially rejected because the design is so radically simple,” said one of the four sources.

BYD officially launched its Blade battery in 2020.

LFP batteries have a lower energy density than most other lithium-ion cells, but are less expensive, have longer life, are less prone to overheating, and do not use cobalt or nickel. Tesla already uses LFP batteries in its Model 3 and Model Y in China.

One of the sources said that a typical Blade pack is about 10cm (3.9 inches) thick when the modules are laid flat on the ground, which is about 5cm to 10cm thinner than other packs lithium ions.

A BYD spokesperson said that was possible, depending on how an automaker packages the Blade package in a car.

DO IT QUICKLY AT THE EXPENSE OF QUALITY?

Although Toyota hasn’t fully solved the riddle of how inexpensive BYD continues to be, two of the sources said one factor may be its abbreviated, flexible design and quality assurance process – which some Toyota engineers consider them shortcuts.

Toyota’s planning process is much more rigid and thorough, the sources said. Once he decides on technologies, components and systems early in a car’s three- to four-year development process, he rarely changes designs.

During the process, Toyota typically makes three design prototypes and three manufacturing prototypes. Some run around 150,000 km (93,000 miles) for rock-solid quality and reliability in emissions or durability tests on poor roads.

At BYD, engineers do far less prototyping — there are usually only two — and designs can be changed for up to two years after the process begins, which is definitely not allowed at Toyota, a source said. . A BYD spokesperson declined to comment.

But as a result of these last-minute changes, the technology in a BYD car is much more up-to-date than that of a Toyota when it hits the market, and is often less expensive.

The four sources believe that new advances in simulation and virtual engineering know-how, as well as the fact that BYD produces a wide range of its own components, have helped it fill in potential gaps in quality and reliability that could result from such a last minute. design change.

“Our challenge at Toyota is whether we dismiss BYD’s engineering method as loose and too risky, or whether we can learn from it,” one of the sources said.

($1 = 6.3703 Chinese yuan renminbi)

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Editing by David Clarke

Our standards: The Thomson Reuters Trust Principles.