On Friday, Toyota Motors had their earnings call and all ears were on their strategy of how they were planning to fit into the expanding EV industry. Akio Toyoda, President of Toyota, gave some insight to the company’s future visions while taking some surprising jabs at Tesla while using bizarre cooking analogies.
Akio recognizes that Tesla’s sky-high valuation of an estimated $400 billion exceeds the combined value of all seven Japanese automakers. And while he acknowledged that Toyota could well learn from the success of Tesla with regards to its investors and innovative business model and approaches, Aiko still felt it was necessary to compare the two carmakers to working in a kitchen and drawing parallels to running their businesses like restaurants.
Toyota’s president feels that Tesla is a new restaurant still trying to promote its’ recipes and Toyota is a reputable eatery already serving its well-established number of customers. Aiko said:
“I am hesitant to say this - Tesla’s business, if you want to use the analogy, is like that of a kitchen and a chef. They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying ‘Our recipe is going to become the standard of the world in the future!’ At Toyota, we have a real kitchen and a real chef too and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already.”
Aiko Toyoda also remarks that Toyota has a wider variety of vehicles than Tesla and likens it to a ‘full menu lineup’ that includes a mix of internal combustion engine, battery electric and fuel cell electric vehicles, as well as their popular hybrids in the Prius, Yaris, Corolla, RAV4, and Camry models.
Referring to Toyota’s 100 million plus vehicles currently on the road, the Japanese owner said that his company manufactures and sells far more vehicles than Tesla. And it expects to sell 7.5 million vehicles during the 2021 fiscal year while Tesla is only expected to sell 500,000 electric vehicles in 2020.
Although Toyota’s profits saw a decrease recently, the car manufacturer has seen a 3% sales recovery compared to other carmakers, all of which are still recovering from the effects of the global pandemic. Toyota’s recovery indicates an expected operating profit of 1.3 trillion yen ($12.6 billion), which far exceeds the expected profit of 500 billion yen.
Last year October, Toyota unveiled its second-generation hydrogen fuel cell vehicle, the Mirai, which is going into production this year. The Mirai is said to have a 30% increase in its driving due to the improved hydrogen capacity. Toyota is only one of three car manufacturers to produce a hydrogen car and speculators think this technology could be a competitor to electric vehicles.
While hydrogen fueled cars will no doubt play a role towards achieving zero carbon emissions, there’s doubt on how hydrogen will be able to compete with electric vehicles.
A report by Bloomberg NEF shows that significant developments are needed in the hydrogen arena such as increasing demand and building the right infrastructure before being able to consider it a true rival to the EV industry. Generating energy from renewable hydrogen is currently expensive but not impossible.
However, Elon Musk has spent years cooking up new ways to lower the cost of battery production to make electric vehicles more affordable, so a hydrogen fueled car industry will still need to go through those pains to catch up in producing a vehicle for the mass market.