By on January 17, 2019

2019 Toyota Prius AWD-e blue - Image: Toyota

When it comes to electric vehicles, Toyota’s North American CEO seems to be on a different page than the company’s big boss, Akio Toyoda. A different page than Ford and General Motors, too. Maybe it’s because Toyoda has the entire globe in his sights, including many EV-hungry markets, while Jim Lentz can only look around, see low, low gas prices and a niche market dominated by a single player, and feel a rush of meh.

Lentz aired his views on our would-be electric future Wednesday, suggesting it would take draconian measures by the government to pry a healthy slice of Americans away from the gas pump. He’s not too enthused with Tesla, either.

Speaking at the Automotive News World Congress in Detroit, Lentz said the hype surrounding Tesla belies the fact that conditions for EV adoption in the U.S. are terrible, Wards Auto reports.

“(Tesla CEO Elon Musk) has excited a lot of people about EVs,” Lentz said. “I worry a little bit we are over-stimulated in our belief that EVs are going to take over the world quickly. Today, if you look at just alternative vehicles (hybrid, plug-in hybrid, BEV, or fuel-cell) there are 94 nameplates out there. And they sold about 600,000 (units) last year. But only seven sold more than 2,000 a month.”

In Lentz’s mind, nothing short of government regulation could force consumers to step away from sub two-dollar gasoline and nudge the EV take rate up at a reasonable clip. Continued slow growth, led by one manufacturer (Tesla), is what the future holds, he claims.

“There’s not much growth in that industry,” Lentz said, adding that some automakers might be focusing too much on the future and not on the next few years.

Indeed, Wards data shows just over 1.2 percent of new vehicles sold in the U.S. last year were battery electric vehicles. While EV sales did rise 103.7 percent in 2018, the bulk of that sales tally was taken up by Tesla. Hybrids, both regular and plug-in, still outsold EVs by more than two to one.

As the creator of the first mass-market hybrid vehicle, Toyota has expressed doubt about the rush to field fully electric vehicles before. It’s still bullish on hybrids, but has, especially in the past year or two, shown a willingness to advance its own plans for EVs. There’s now a plan to introduce 10 such models in various markets by early next decade.

Because Tesla is such a big player in America’s still niche EV market, Lentz doesn’t see it as a major competitor to his business, though he admits it could be hurting Prius sales.

“(Musk) is creating an entirely new segment of vehicles,” he said, adding that 70 percent of Tesla buyers are beholden to the brand, and wouldn’t consider a competitor’s product. “And by that, I don’t view Tesla products as luxury products. Those of us who only separate the world between luxury and non-luxury, we’re missing the point. Tesla has created this new category of a technology-driven product.”

While Toyota’s Prius and Prius Prime plug-in do not overlap with any existing Tesla in terms of price, personal finances can change and the Tesla brand has already overtaken the Prius nameplate in eco snob appeal. Sales of the Prius family fell 19.4 percent in 2018.

[Image: Toyota]

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59 Comments on “Toyota’s North American CEO Isn’t Exactly Brimming With Enthusiasm for EVs...”


  • avatar
    MartyToo

    Interesting take on the market. Dan Neil in the WSJ predicted a quicker conversion to electric than I would have guessed (just a few weeks ago). But he did it with so much enthusiasm on a personal level for a yet to be built pick-up that I was starting to believe.

    Lentz vs. Neil seems like a mismatch. I’m back to wondering what gas buggy to buy when my V-6 coupe no longer pleases. I was starting to think I might need a fast charger in the garage…

  • avatar
    stangmatt66

    Toyotas are already boring appliances…might as well make them electric

  • avatar
    mcs

    Toyota is working hard on EVs. Just look at the patent office filings. I think they lead in the number of solid-state battery patent filings.

    One thing he needs to learn is that many, if not most, EV buyers are more interested in the driving characteristics and don’t care about “greenness” or saving money. We want the instant response over sluggish CVTs and smooth quietness over agricultural 4’s.

    • 0 avatar
      SCE to AUX

      “In Lentz’s mind, nothing short of government regulation could force consumers to step away from sub two-dollar gasoline and nudge the EV take rate up at a reasonable clip”

      With this mindset, EVs will never take hold at Toyota. Market watchers, competitors, and TTAC editors alike look with wonder at Tesla’s success, and think people still buy EVs for the tax break, gas savings, or snob appeal. And they’re quite wrong.

      • 0 avatar
        Art Vandelay

        So is Toyota now GM circa 1974 with that line of thinking?

      • 0 avatar
        RRocket

        In Ontario, where the EV credit was recently canceled, EV sales fell off a cliff.

        So I’d say it’s pretty evident that many people DO buy EVs for the tax break..

        • 0 avatar
          SCE to AUX

          @RRocket: I misspoke about the tax break. The effect on sales is a function of vehicle price and percentage discount the local subsidy provides.

          For low-end cars like the Leaf, the subsidy matters a lot. The recent reduction of subsidies in Denmark and Georgia (the state) are proof of this.

          It remains to be seen how Tesla fares now that their Federal subsidy is dropping. I suspect their demand will stay high, but it comes at a time when they want to introduce their mythical $35k car. But the brand appeal of Tesla remains strong.

      • 0 avatar
        jatz

        “Market watchers, competitors, and TTAC editors alike look with wonder at Tesla’s success”

        Heh… that made me think of the “Adoration of the Magi”. Elon would approve.

      • 0 avatar
        28-Cars-Later

        I disagree, Lentz’s views in some form are most likely correct for North America. Toyota’s competitors are dedicating huge amounts to a product with tiny market share and limited appeal. These products are very expensive and, save Tesla, have little demand in the aftermarket which is why resale is so poor. As I have said in the past, Toyota can wisely spend R&D on battery technology and showcase it in it’s hybrid offerings and should things dramatically change they not be caught off guard. “Coolness” aside, The pure EV fits a limited use case and is a poor ROI.

    • 0 avatar
      vvk

      EVs are enthusiast grade vehicles, even at the lower end of the price scale. We are at the beginning of the EV revolution. Once more people experience the immediate throttle response, the superb engine braking (regen,) the low center of gravity and the superior convenience of EVs, the tide will lift even non-enthusiast brands like Toyota out of the past and into the future.

      • 0 avatar
        Art Vandelay

        I am driving a 2013 Leaf I am considering buying for my oldest. It is a lot of good things, but an enthusiast vehicle it is not. I actually drove a new one, just like an hour ago while the one I am looking at was getting checked out. It is better, but still the driving experience is a quieter, smoother version of my wife’s Santa Fe, not an enthusiast vehicle.

        Not to knock them, again they are great if they work for you, and certainly the higher levels they offer some enthusiast appeal, but at the low end they are slow and heavy appliances. Even if they are an old school Maytag (a good appliance), they do not inspire any sort of spirited driving, at least in my experience.

        But they are great for what they are.

      • 0 avatar
        sportyaccordy

        By this logic, most people would be driving naturally aspirated sport sedans instead of turbocharged crossovers.

      • 0 avatar
        multicam

        The superior convenience of EVs? You mean the superior convenience of having to wait 8 hours for a recharge to go another 200 miles? That convenience?

      • 0 avatar
        carguy67

        For some reason Prius owners–yes, I know it’s not a BEV–seem to think their cars are really quick (what were they driving before, farm tractors?). They routinely try to beat me off the line so they can cut in front of my 480HP Mustang. They win the first 10 feet, then it’s game over.

      • 0 avatar
        raph

        regen braking – ick!!! Its like running into a wall of jello… and feels unnatural.

        You’ll also have to sell me on the “superior” convenience of an EV? A few minutes at the gas pump isn’t a big deal if that’s what your getting at or maybe its the space efficiency of the drivetrain?

        Frankly I’m more on board with the green aspect on an EV and the overall lower cost of ownership is appealing provided batteries become substantially cheaper over time.

        As an entertainment device EV’s come up short simply because they don’t make the right sorts of noises or level of interaction I find rewarding.

        I think if I ever take the EV plunge it will be one of two types – a big autonomous isolation chamber for long trips (provided that’s a practical endeavor – on a side note, hopefully with a panoramic monitor so I can play a racing sim while I’m being delivered) or a small city car like the Leaf or i3.

        • 0 avatar
          mcs

          “regen braking – ick!!! Its like running into a wall of jello… and feels unnatural.”

          Done right, it should feel like engine braking with a manual. The cars I’ve driven do it right, but I’m not sure that’s the case with all EVs. Which EVs have you driven?

        • 0 avatar
          vvk

          >regen braking – ick!!! Its like running into a wall of jello… and feels unnatural.

          I guess if you have been driving automatics all your life. But this is an enthusiast forum, so most people here would prefer the wall of jello of engine braking they are used to with manual transmissions.

          >You’ll also have to sell me on the “superior” convenience of an EV?
          > A few minutes at the gas pump isn’t a big deal if that’s what your getting at

          Exactly. First of all, not a few minutes. It is extremely inconvenient for someone who drives a lot and has a challenging schedule. I drive about 200 miles per day and have a very tight schedule, so I never have time to get gas. It is extremely inconvenient, especially since my ICE car has a 250 mile range (high performance V-8 RWD sedan with manual transmission) and I have to find gas EVERY DAY. It is super annoying! With my Tesla, I never have to worry about gas — the “tank” is always full in the morning. It takes about 5 seconds to plug in at night and another 5 seconds to unplug in the morning.

          > Frankly I’m more on board with the green
          > aspect on an EV and the overall lower cost of ownership is appealing

          I really don’t care about these two things. Sorry. All I care about is that it drives itself when I am tired or in heavy traffic, it drives like a sports car when I want it to, it is large, safe, comfortable, quiet, has a fifth door for bulky items and lots of room for cargo and can sit seven people. And I never ever have to worry about looking for a smelly, dirty gas station when I am already late. And yes, I hate the feeling of an automatic transmission specifically because of the lack of engine braking/regen, so having strong regen is extremely natural and pleasant for me. And so is immediate throttle response unmatched by any ICE car.

        • 0 avatar
          vvk

          >regen braking – ick!!! Its like running into a wall of jello… and feels unnatural.

          I guess if you have been driving automatics all your life. But this is an enthusiast forum, so most people here would prefer the wall of jello of engine braking they are used to with manual transmissions.

          >You’ll also have to sell me on the “superior” convenience of an EV?
          > A few minutes at the gas pump isn’t a big deal if that’s what your getting at

          Exactly. First of all, not a few minutes. It is extremely inconvenient for someone who drives a lot and has a challenging schedule. I drive about 200 miles per day and have a very tight schedule, so I never have time to get gas. It is extremely inconvenient, especially since my ICE car has a 250 mile range (high performance V-8 RWD sedan with manual transmission) and I have to find gas EVERY DAY. It is super annoying! With my Tesla, I never have to worry about gas — the “tank” is always full in the morning. It takes about 5 seconds to plug in at night and another 5 seconds to unplug in the morning.

          > Frankly I’m more on board with the green
          > aspect on an EV and the overall lower cost of ownership is appealing

          I really don’t care about these two things. Sorry. All I care about is that it drives itself when I am tired or in heavy traffic, it drives like a sports car when I want it to, it is large, safe, comfortable, quiet, has a fifth door for bulky items and lots of room for cargo and can sit seven people. And I never ever have to worry about looking for a smelly, dirty gas station when I am already late. And yes, I hate the feeling of an automatic transmission specifically because of the lack of engine braking/regen, so having strong regen is extremely natural and pleasant for me. And so is immediate throttle response unmatched by any ICE car.

  • avatar
    APaGttH

    …While EV sales did rise 103.7 percent in 2018, the bulk of that sales tally was taken up by Tesla. Hybrids, both regular and plug-in, still outsold EVs by more than two to one…

    True, but hybrid sales are dropping like a rock and EV sales are growing. The Prius just had its worst year since 2004 and in 2004 there was only one flavor of Prius.

    • 0 avatar
      Art Vandelay

      It’s not one to one though…The EV growth does not equal the Hybrid dropoff meaning that as good as EV’s have gotten, they still do not meet the needs of some customers who are likely among the most likely to adopt them.

      And as Hybrids come online in the large pickups that picture could change. Plus, don’t forget the best selling hybrid received an unfortunate redesign.

      Hybrids will stick around for those that the constraints of BEV’s dont work (recharge time). Contrary to what you read here, a lot of folks still drive a lot of miles on a daily basis.

  • avatar
    ajla

    I generally agree with Lentz. Tesla made up 53% of the EV market in the US last year (38% alone went to the Model 3). But, most everything else with a plug was either down or flat, and the few things that were up weren’t moving big volumes.

    Then there’s the Volt, which was a top-6 seller (even with it down 20% YTD) but is ostensibly being cancelled for profitability issues.

    ***I don’t think ignoring EVs is the answer for full-line manufacturers***, but we have entire brands planning to go full EV and companies like GM stating 20 new “EVs” over the next 4 years when they’ve hardly been able to sell the ones they’ve built in the past.

    I just don’t see how the numbers justify the giant investment. They must either be anticipating a huge market shift or be expecting to have a lot more volume internationally.

    I’m not sure “CUV-it” is the answer here either. There are PHEV crossovers available now and their volume is between the NSX and Boxster.

    • 0 avatar
      danio3834

      >***I don’t think ignoring EVs is the answer for full-line manufacturers***

      They don’t think so either because they know they can’t fight the regulatory wave. So they’re hedging with dabbles. Something everyone is up against is CAFE 2025 which basically demands PHEV/HEV in significance and heavily rewards EVs. The mechanics of these regulations basically demand a cost increase of anywhere from $4,000-$8,000 per vehicle per a report from the SAE at the onset. While the current administration hasn’t been hostile in that regard, no one is willing to bet that it will remain that way.

      Knowing that, it’s no wonder vehicles that don’t have that kind of margin (ie. small-midsize cars) are disappearing. Everyone must pay more to manifest destiny.

    • 0 avatar
      SCE to AUX

      “most everything else with a plug was either down or flat”

      That’s true, but here’s why:
      1. Plug-in hybrids are still hybrids, and that’s dying off.
      2. Many pure BEVs ceded market share to the surging Model 3. This says more about the Model 3 than it does the market segment.

    • 0 avatar
      carguy67

      “… we have entire brands planning to go full EV and companies like GM stating 20 new “EVs” over the next 4 years …”

      All PR talk, so far (where are the cars?). I think the manufacturers are just hedging, if BEVs don’t really catch on we won’t see that many new ones.

  • avatar
    redgolf

    I’m all in for going EV, just not gonna pay the extra $10K plus for one over ICE. Our local GM dealer doesn’t even have a Bolt to look at but that’s probably a GM corporate call ya no, gotta hit the high volume markets first and the ones willing to fork over the extra cash for one. I’m retired so all my concern now is that it would get be to and back from Bowling Green Ky. (100 mi. each way) without range anxiety! So come on y’all flood the market with EV’s, bring that price down!

  • avatar
    Pete Zaitcev

    This is just Christiansen all over again. The large entrants wait for “the market to mature”. It’s a very much a suicidal strategy in most industries. Fortunately for Toyota, cars are nothing like computers, or even excavators. So, they may yet be able to stage a comeback, using the engineering and supply chain developed for other markets.

    Interestingly enough, if you look at non-Tesla EVs, they suck big time, and it was going on for many years, all the way back to GM EV-1. But without Tesla, the automakers explained their failure away as a generic disadvantage of electric propulsion. Not so much anymore.

    BTW, the other strategy the big companies use, by Christiansen, is forcing the issue from the top. This is what BMW appears to be pursuing. And “the Pug”, or i3, is the result of it. Personally, I love its unorthodox design, but the range and mileage are just not there.

  • avatar
    SCE to AUX

    The fact that Toyota continues to double down on fuel cells tells me how tone deaf they are about alternative power vehicles.

    They live in a glass house – hybrids are dying and the Model 3 outsold the Corolla on at least one occasion. Hybrids are about saving gas; EVs are not (but it is a benefit). Nobody buys a hybrid for its awesome driveability.

    • 0 avatar
      sportyaccordy

      What occasion was that?

      Toyota’s brand is strong enough that when mainstream BEVs can become commercially viable they will be able to jump onboard and capture market share pretty quickly. The Prius was an anomaly… over the last 2 or so decades Toyota has succeeded in large part because of its technological conservatism.

  • avatar

    I think true EVs will be mainstream when: 1) the minimum range is 250 miles under very hot or cold conditions, 2) charging stations are along almost every highway, 3) charging takes a maximum of about 15 minutes, and 4) the total ownership cost for purchase, service, and fuel over a typical 6 to 8 year ownership is comparable to an ICE vehicle – without government subsidies.

    • 0 avatar
      indi500fan

      Wisdom.
      With sub 2 buck gas, current EV is a non-starter with a lot of operational compromises.
      Gasoline needs to be > 5 bucks per gallon to trigger a movement, and even in Europe and Japan it’s not exactly a stampede to EVs.

      • 0 avatar
        glennmercer

        You make a key point. I am neither pro- or anti-EV. But with gasoline where I live (Ohio) at $2/gallon…. let’s call it $2.50 to give us some wiggle room, driving a Prius HEV getting 40 mpg, and driving 10,000 miles/year: 250 gallons at $2.50 = $625 per year. Even if I assume electricity at half that cost, do I switch to EV (even if I assume exactly equal purchase price) for $300+ savings a year? This may be one reason we see more EVs in California, with its much higher gasoline costs. I think EV zealots forget that ICE (hybridized) is a moving target, improving MPG every year. An EV would shellack an Olds Tornado in fuel costs… a Prius? Not so much…

      • 0 avatar
        redgolf

        indi500fan – if gas has to be > $5, then why am I still going to the local Publix store to get my “free” $10 of gas with purchase of $50 groceries! Gas is $1.99/gal. (Shell) here in middle Tn. getting 5 gallons free is still a big yahoo for me! I would rather I didn’t have to pump any gas at all and plugging in at night time would suit me just fine.I think there is a big market for EV’s, just not at the higher premium to buy one. It’s all about the cost comparison for most, not so much to save the environment!

      • 0 avatar
        Art Vandelay

        We hit 4.50 at the height of the last price spike and it was there for some length of time. The best selling vehicle during that time? Ford F Series. I don’t disagree that there is a number that would cause people to switch, I just think it is much higher than market forces can drive the price with recent production booms in North America. Not to say Uncle Sugar couldn’t intervene, but typically people keep right on filling up there pickups when prices spike…they just gripe about it and spend less money elsewhere.

    • 0 avatar
      Boxerman

      This is it in a nutshell, alternatively if recharge cart be done quickly an ev needs a 400 mile range.

      Heres reality today. Take the jaguar Ipace as an example. Listed range is 250 miles, but; you dont really use the last 20% without smokign the batteries, and fast charge takes you to 80% so youre really only doing 150 miles depedign on conditions, you need a charger at home which is a few K and when do you plug in at home, right before bed.

      If youre taking a trip there really are not too many places to recharge and recharging takes more like 30 min and the recharge is not likely to be at your hotel or across the road from where you eat.

      So youre paying a 25% premium to go electric with a whole host of drawbacks.

      I think lenz is right, Tesla created a 3rd category of vehicke for techno people, they own that market and its fairly limited.

      Get the pirce closer to an equivalent luxury vehicle and range up to 400 miles and it competes.

      Would you rather have an amg 6.3 wagon or a tesla.

    • 0 avatar
      Asdf

      Charging taking a maximum of 15 minutes?! That’s WAY too long, it shouldn’t take more than 5 minutes at the most.

      • 0 avatar
        MartyToo

        My wife’s cousin drove his Tesla to our house for the first time last month. A 15 minute stop on the way and one planned for the return trip. I’m politely and invisibly scratching my head wondering why that passes for fun.

        And since I don’t like to argue religious topics I tried to smile.

        (I did have the guts to tell him I didn’t want or need solar panels on my beautiful new roof when the topic came up a few years ago. But that was the total conversation.)

  • avatar
    sportyaccordy

    As a tech geek, I’m excited about EVs

    As a numbers guy, I can’t make the numbers work. EVs are environmentally friendlier from cradle to grave, but the incremental payback of 60-90x more high voltage batteries isn’t worth the environmental or financial cost. Especially considering how dirty so much of the grid is. There are some regions where an EV is no cleaner than a ~50MPG hybrid- not outside the realm of what’s possible and available.

    • 0 avatar
      raph

      Well you can console yourself with the point of source benefits I suppose. Easier to keep a few coal/gas/oil powerplants clean or limit their damage than a million individual cars and trucks buzzing around a region billowing pollutants.

  • avatar
    MartyToo

    Not from cradle to grave. I don’t know how much the numbers have changed but here you go:

    Here is a link that summarizes the paper (in a pretty accessible way):
    http://www.voxeu.org/article/measuring-environmental-benefits-electric-vehicles

    Here is a link to the paper:
    http://www.dartmouth.edu/~mansur/papers/Holland_Mansur_Muller_Yates_ElecCarSubsidy.pdf

  • avatar
    danio3834

    This is the difference between a businessman in the industry speaking frankly, and the PR machines that otherwise put out the Corporate Word. Especially noteworthy is that no one can apply to this man Genetic Fallacy since he’s one of the heads of a leading researcher/producer of vehicles that have electric battery packs/propulsion.

  • avatar
    Spike_in_Brisbane

    I wonder who will replace Lentz in a month or so?

    Here, petrol costs about US$3.70 per US gallon. and EVs are less than 1% of sales. There are ZERO government subsidies or other incentives. There are very, very few DC chargers except for the Tesla network.

    I drove a Jaguar I-Pace and I really WANT one but several times a year I drive to my holiday home which is 2,000km south. I do it in two days with an overnight at Dubbo. That would be an absolute minimum of six legs between long charges even if they were available. My motel in Dubbo will not allow a cord out the window. Dubbo has no DC chargers except for Tesla. The Dubbo Jaguar dealer will allow free charging but only during business hours. i.e Not while I am sleeping. I have concluded that the only way to get a Jag to Gippsland is on the back of a flat bed truck.

  • avatar
    jatz

    EVs aren’t going to fix the damn roads.

  • avatar
    Kendahl

    I used to say that it wouldn’t bother me if the Ferrari I can’t afford got 40, 50 or 80 miles per gallon as long as it still could do 0-60 in less than 4 seconds and topped out above 180 mph. I feel the same way about pure electric cars. They have the acceleration and top speed but their average speed sucks due to the time they must spend recharging on trips that exceed their range.

  • avatar

    I have insider information that Toyota is working on the car with a small nuclear reactor (like one you saw in “Martian”). You charge it once during manufacturing. So it is superior to any ICE or BEV vehicle. Almost zero maintenance and no need to refuel or charge. You can also use it as the energy source during disaster.


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