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China policy forces Toyota to go electric

One Toyota executive called it an “agonising u-turn”. The world's largest automaker until now also was the only major OEM that favoured hydrogen as the main alternative motorisation to petrol. 
 
Despite launching the battery-electric Prius, Toyota in 2013 said that hydrogen was the practical alternative to the traditional combustion engine. EVs would only be good to run neighbourhood errands. 
 
"Heart-wrenching"
But last year, the Japanese automaker changed course and started developing its own long-range EV, which will hit the market in 2020. That about-turn has now been called "agonising" and "heart-wrenching" by an unnamed Toyota exec, quoted by Automotive News China. 
 
In fact, the course change is due largely to the regulatory requirements reshaping the market reality in China – the biggest car market in the world. 
 
Last September, China tabled the requirement that 8% of automotive sales per manufacturer should be of EVs or plug-in hybrid vehicles, a share that would rise to 10% in 2019 and 12% in 2020.
 
Hybrid categorisation
Those targets may still shift a bit, but the thrust of the policy towards 2020 will remain in place, most car makers think. Including – much to the chagrin of Toyota – the categorisation of conventional hybrids as petrol cars. 
 
For this would exclude the Prius from new-energy vehicle credits, which automakers could use to meet China's strict fuel economy rules. 
 
"The Prius and other hybrid cars are central to our green car strategy. But in China's view, the Prius is no more than a gasoline car. We have no choice but to get over our EV allergy and come up with an electric car", said the unnamed Toyota executive. 
 
Fuel economy 
Toyota has said publicly that it will start selling plug-in hybrids in China next year, and an EV as well – but without a fixed time frame for the latter. 
 
The change of direction would not mean that Toyota de-emphasises conventional hybrid sales in China: manufacturers must not only meet EV quotas, but also fuel economy requirements, to which end conventional hybrids also help. 
 
Not giving up
But Toyota is not giving up on its hydrogen option. In fact, it will test whether the Mirai, its hydrogen fuel-cell sedan launched in 2014 (pictured), has commercial traction in the country. The manufacturer announced it would start a long-term market test in China in October, through to 2020.
 
The Mirai is being introduced very sparingly: Toyota has sold only 3,000 Mirais in Japan, the U.S. and Europe. This year, the company aims to boost production to 3,000 units. 
 
Image: Mariordo, CC BY-SA 4.0
28/04/2017  |  Frank Jacobs


TAGS : Toyota China 
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