Toyota forced to build electric cars in China

Toyota RAV4 EV 2

Toyota has made no secret of its disdain for battery-electric vehicles in favor of fuel cells, but like other high-volume OEMs, it was compelled to produce an EV by the California authorities – the RAV4 EV, which the company did not market, and discontinued as soon as possible. Now it seems that the world’s largest automaker will have to play the same game in the world’s largest auto market.

As Bloomberg reports, the Chinese government is keen to encourage local EV production, and foreign manufacturers are finding that they must have at least one battery-electric model in their lineups if they hope to win government approval to build factories. Around 40 new EV models are expected to go on sale in China this year.

SEE ALSO: China to issue licenses for EV manufacturing to new firms

Toyota will introduce the Leahead and Ranz all-electric brands this year, in joint ventures with Chinese partners Guangzhou Automobile Group and FAW Group. Industry observers seem to agree that it’s strictly a symbolic effort.

“It is the cost of entry of being here,” said James Chao, Managing Director of IHS Automotive in Shanghai. “A lot of it is kind of for show, and they just want to please the government.”

“They’ll do some token launches and token sales, but I’m not expecting any waves,” said Ashvin Chotai, Managing Director of Intelligence Automotive Asia. “This is just a distraction, an unwanted headache.”

Volkswagen, Hyundai and BMW also plan to launch EVs in the China market, but will have a tough time competing against better-known local brands such as BYD and BAIC, according to Hong Kong-based Bloomberg analyst Steve Man. He predicts that these models are also destined to be compliance cars, sold in small numbers to local governments and utility companies.   


Source: Bloomberg

  • Michael B

    I don’t know how Toyota is going to save face in coming years. Should be interesting to watch.

  • TonyWilliamsSanDiego

    Toyota is well set up for hydrogen compliance in California for at least the next ten years. It appears China isn’t smitten with hydrogen like our state of California, which will:

    1) give “super credit” of nine California Air Resources Board – Zero Emission Credits (CARB-ZEV) per vehicle sold. The RAV4 EV (I currently have three of these) only earned 3 credits each for vehicle model years 2012-2014.

    2) spend $100 million on hydrogen infrastructure at $20 million per year to install at least 68 hydrogen fueling stations. Oddly, the third largest metro area in the state, San Diego, with 3.5 million residents, will get zero hydrogen stations.

    3) change ZEV rules in the future so that compliance can be made with cars that Toyota makes… hybrids and hydrogen.

    Toyota will thank California by moving their headquarters from California to Texas.

    • Michael Walsh

      Hydrogen Fuel Cells for cars is extremely silly. Battery costs are on the way down, down, down getting 8% more powerful every year. Can’t compete with that paradigm!! This does not mean it would be a bad idea for buses (already in operation) or heavy equipment or powering buildings. Must get Hydrogen via water & renewable energy!

    • Michael Walsh

      The fact that Toyota got super credits is ludicrous and many folks got payola, likely. Hydrogen reformed from methane has a long dirty supply chain, especially if it is from fracked gas. Plus the “State of California” will blow $100M of excellent money to build hydrogen refueling stations =>What!!!??..
      this whole farcical hydrogen for cars shenanigan will collapse completely within three years. Please take note of today’s date… Pure BEVs are clearly the solution & winner!

      • Michael Walsh

        Oh also, pray tell, How long is the waiting list for folks lining up to buy the $57,000 Toyota Mirai Fuel Cell car? Is it over 10 yet? How many thousands on the list already to buy the TESLA MODEL X?

  • EV Safe Charge

    Hydrogen takes more energy to produce than does electricity, and the electric motor in an EV has one moving part! Fuel cell motors have a ton of parts (so future maintenance will bring more revenue to an auto maker who pushes fuel cells…) and there is a long dirty supply chain as Michael Walsh pointed out in the comments. Battery costs are coming down and range is increasing… there are so many reasons why electric is the way to go. We applaud auto makers who care about the environment, not just profits, and embrace electric vehicles like so many consumers are doing! Consumers understand that electric is better for the environment and their wallets over the long run. Go EV!

    • Zac March

      I’m a little bit confused by your reference of “Fuel cell motors have a ton of parts”. The motor that drives the wheels of an EV is identical in function to one of a FC vehicle. The only main difference between these two vehicles is the energy storage medium, one being a large battery, and the other being compressed hydrogen in tanks which then needs to run through the fuel cell stack, then into a small battery. At the present, there are some issues with FC stacks life longevity, but I have not worked with or seen any that are production ready, so it is entirely possible that these issues have been mostly resolved and give easily a 150-200k mile life with no issues. I completely agree that BEVs are the better, simpler, and slightly greener choice, but I want them to win a fair fight where everyone is well educated! I don’t believe maintenance between these two types will be significantly different. Either of these choices of vehicles are cleaner than even the best hybrids, so I say bring ’em on!

      • EV Safe Charge

        Yes, we agree, we should have said fuel cell vehicles, not fuel cell motors. We meant that fuel cell vehicles have many more parts (and more complicated parts) to deal with the hydrogen part of the operation than a vehicle with just a battery as the source of energy.

  • Thomas William Barron

    Toyota are just finding an excuse not to bring an EV to market by distracting themselves with the FC folly.

  • Denys Allard

    Apparently, Toyota will have to come into the electric age kicking & screaming because their execs don’t see the big picture. Denial is not a river in Egypt.

    • Michael B

      But Denali is a mountain in Alaska! 😉