Toyota launches first battery-electric car in cautious start as rivals go full throttle

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Gasoline-electric hybrid models remain far more popular in Toyota’s home market than electric vehicles (EVs), which accounted for just 1% of passenger cars sold in Japan last year, according to industry data.

Toyota will lease bZ4X sport utility vehicles for the equivalent of $39,000 for the first 4 years

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Toyota will lease bZ4X sport utility vehicles for the equivalent of $39,000 for the first 4 years

Toyota Motor Corp launched its first mass-produced battery-electric car in Japan on Thursday, a strategy the automaker says will help ease drivers’ worries about battery life and resale value, but has raised the eyebrows of analysts. Gasoline-electric hybrid models remain far more popular in Toyota’s home market than electric vehicles (EVs), which accounted for just 1% of passenger cars sold in Japan last year, according to industry data. Still, the market is growing rapidly, and foreign automakers, including Tesla Inc, are making visible inroads on the streets of cities like Tokyo.

Bundling insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X sport utility vehicles (SUVs) for the equivalent of $39,000 for the first four years. Cancellation within the first 48 months will incur additional charges.

Although acceptance of electric vehicles has been slow in Japan, that will change and Toyota could risk losing market share by focusing on a rental model rather than a purchase, said CLSA analyst Christopher Richter.

“Anything you do that makes it harder to buy might not be a good thing,” he said.

“It’s a strategy that I don’t like very much. It indicates that Toyota is taking the domestic market a bit for granted.”

Toyota announced in December that it would commit 8 trillion yen ($62 billion) to electrify its cars by 2030.

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Toyota aims to lease 5,000 SUVs in the current fiscal year – around the same number of EVs analysts estimate Tesla sold in Japan last year

Toyota aims to lease 5,000 SUVs in the current fiscal year, about the same number of electric vehicles that analysts estimate Tesla sold in Japan last year.

The automaker plans to start selling the bZ4X in other markets later this year, and pre-orders have already started in some European countries.

Toyota has not decided when it will start selling the cars in Japan, a spokesperson said.

‘DISSIPATE ANXIETY’

Electric vehicles have become popular in Europe through rental programs offered by employers, and Toyota could try a similar approach to popularize electric cars, said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute.

New customers worry about battery life and the potential decline in trade-in value over time, said Shinya Kotera, president of KINTO, the Toyota unit offering the leases.

“It’s our role to dispel anxiety” towards electric vehicles, he said.

Imports of battery electric vehicles nearly tripled to a record 8,610 vehicles in 2021, according to industry data. Analysts estimate that around 60% of them were Teslas.

Still, Japanese automakers remain cautious about going the all-electric route.

Toyota pioneered the hybrid more than two decades ago and retains high ambitions for hybrid and hydrogen vehicles, even as it invests more to bolster its range of battery-electric vehicles.

Rival Nissan Motor Co pioneered consumer electric vehicles with the Leaf in 2010, but will only launch its second battery-electric vehicle model, the Ariya SUV, also on Thursday. The Ariya will be sold for the equivalent of $41,500, not including a government subsidy.

In April, Honda Motor Co set a goal to roll out 30 electric vehicle models globally by 2030.

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