By on November 10, 2021

Toyota

Back in 2010, if you wanted to be seen as an eco-conscious consumer who was on the cutting edge of forward-thinking tech, you drove a Toyota Prius. Heck, even George Clooney drove one to the Oscars – and Clooney is cooler than you (or me, anyway). The Prius was such a hot seller that Toyota reportedly looked into the possibility of spinning it off into its own brand.

That, as they say, was then. Today, Toyota has fallen significantly behind market leader Tesla in the race to bring EVs to the mainstream. There are many reasons for that, of course – but big bets on stillborn hydrogen fuel cell technology and more than a little bit of overconfidence in the size of its market lead certainly played a part.

It didn’t have to be that way – and, in fact, Tesla’s trillion-dollar story could have gone very, very differently for Toyota. All they needed was a little bit of money, and a lot of cynicism.

A THING IS WORTH WHAT SOMEONE WILL PAY FOR IT

By any rational valuation, Tesla is not worth one trillion dollars – certainly not when Ford, an industrial giant that has been profitably selling cars for more than a century, is valued at “just” $80 billion. Nevertheless, Tesla’s market cap has, indeed, exceeded “the big T”, and the company is now worth more than Ford.

It’s not just Ford, though. In addition to Ford, investors believe that Tesla is worth more than Toyota, Volkswagen, General Motors, and Honda … combinedand that was nearly $400 billion in the rearview mirror.

To say that Tesla has been a market success is a bit of an understatement, then, and its meteoric rise has been a bitter pill for TSLA shorts (and even some of the bulls and fanboys who sold too early) to swallow. Imagine, then, how Toyota must feel – because Toyota had the chance to buy Tesla, in whole, for $2 billion back in 2010. And we know that, because $50 million bought Toyota about 2.5 percent of the company.

HOW TOYOTA COULD HAVE DONE IT

While not quite the nerdy, edgelord/incel “hero” he is today, Elon Musk was held in pretty high regard by, well – comic-book fans, at least. How else would you explain his inclusion in Iron Man II, where he is presented, not so tongue-in-cheek, as the real-life Tony Stark?

In those days, too, it was widely believed that Toyota’s investment in Tesla would be mutually beneficial, with Toyota’s expertise in mass-production naturally complementing Tesla’s nimble, start-up ability to innovate and pivot.

“The obvious scenarios involve joint manufacturing at Toyota’s former GM joint-venture plant NUMMI,” wrote Edward Niedermeyer, in 2010. That statement was backed up soon after, when an unnamed Downey, CA city councilman seemed to confirm that Tesla would build the Model S at NUMMI, claiming he’d heard it from Ol’ Musky, himself.

That same article refers to Toyota as the undisputed “industry leader in hybrid technology” – and how could they not have been seen as the natural leaders in the EV race? Sure, they had tested (and rejected) Panasonic’s then cutting-edge li-ion batteries. Toyota’s reasoning was never made public, but Menahem Anderman, then-president of a California-based consulting firm called Advanced Automotive Batteries, theorized that, “cost is critical (to Toyota’s decision), and we still don’t know enough about long-term durability.”

This is where our automotive time-travelling Sam Beckett comes into play.

“Let Tesla take the risk on li-ion for Toyota,” they argue, in some high-powered board meeting. “It’s a no-lose situation. If Tesla bets the farm on li-ion and fails, we are proven right and move forward as the leaders in hybrid tech. If Tesla succeeds with li-ion, we can reap the rewards, and rake in the profits.”

Toyota could have – indeed should have – bought a controlling stake in Tesla, left Elon at the helm, and muscled all the other carmakers trying to greenwash themselves with small stakes in Tesla to fend for themselves … which is what they all did, anyway.

If only it were that easy.

NOBODY WOULD BELIEVE YOU

Let’s face it, if I had sat down at a Toyota board meeting and told everyone present that Tesla would be worth more than every other carmaker combined in ten years’ time, no one would have believed you. Heck – when Daimler sold 4 percent of Tesla for $780 million in 2014, and almost broke their arms patting themselves on the back at the sheer genius of their financial guys.

“We are extremely satisfied with the development of our investment in Tesla,” Daimler’s then-Chief Financial Officer, Bodo Uebber, told the Wall Street Journal. “But it (the investment) is not necessary for our partnership and cooperation. For this reason, we have decided to divest of our shares.”

That 4 percent share of Tesla, today, would be worth more than $40 billion. Daimler’s total market cap, as I type this, is just north of $100 billion.

If you like watching people squirm, you could hardly pick a better subject than poor Bodo Uebber, trying desperately to explain to Daimler’s board what, exactly, led him to piss away 40 percent of the company’s market cap for a $780 million return … but those people wouldn’t have believed him, either, if he’d told them what Tesla’s stock would do just seven short years later.

Tesla’s valuation simply boggles the mind. Even if our Quantum Leaper could pass every test they threw at him, just came out and told the board at Toyota, “I’m a time traveler! Long TSLA! Buy as much as you can! Stop trying to make hydrogen happen, hydrogen is never gonna happen!” I don’t think they’d believe it. If they saw him hop into a time machine, H.G. Wells-style, push on the lever and bugger off into the future, I don’t think they’d have believed.

“Put in another $50 million,” is probably as far as Mr. Beckett would get. “And another $50 million into hydrogen.”

THIS IS WHAT HEDGING YOUR BETS GETS YOU

I have this friend, an engineer named Dustin Hanna, who told me the most depressing thing I’ve ever heard while we were at lunch one day. He said, “you and I will never be rich,” in between bites of Jamaican food. “We’re too smart.”

I must have looked confused, because he kept going.

“See, a stupid person will see some idea on TV or hear about some get-rich-quick scheme and buy into it,” explained Dustin. “They’ll mortgage their house, empty their savings, and max out their credit cards because they believe in it so much. 99 percent of the time, they’ll lose it all. Everything. You and me? We’re too smart to fall into that trap. Even if we believe in something, we put in a little bit here – a little bit there. Only what we can afford to lose, and we’re smart, right? So that’s not a big number.”

I just nodded, stupidly intelligently.

“Here’s the thing, every once in a while, that wild, hail Mary bet pays off, and you get a 1,000:1 return on your money,” he said. “The dumb guy who put in $150,000 he didn’t have to begin with? That guy has $150 million now, and he thinks he’s the smartest guy in the world. He has no idea how lucky he is because he was too stupid to figure out what the odds against him were from the beginning. You and me? We put in $100 or $1,000, if we put in anything at all. Because we’re ‘smart’.”

I walked away from that lunch feeling a lot dumber than when I went into it, but experience has proven Dustin right again and again. The richer Elon gets, the more ridiculous his Tweets seem to get. The higher TSLA climbs, the more the Teslanaires pound their chests over their own genius. The smart people? The really, really smart people like poor Bodo?

Not so much.

No, Toyota would have never swung hard on Tesla. They were – and are! – too smart for that kind of thing. All they can do now is try to buy a politician or two to try and swing things back their way, or maybe run a few nasty commercials about EVs. Even then, I think they’d agree that buying ads would be a whole lot easier with an extra trillion dollars.

[Image: Toyota]

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106 Comments on “Quantum Leaps: Toyota Buys Tesla in 2010...”


  • avatar
    SCE to AUX

    “Toyota could have – indeed should have – bought a controlling stake in Tesla”

    The other half of an acquisition is the willingness to be bought and *controlled*. Ain’t gonna happen with Mr Musk.

    The second half of the article describes the situation well – Toyota (and most other mfrs) are “too smart” to go all-in on EVs, which is why they’ll always lag Tesla.

    I’ve said all along that Tesla’s 100% commitment is what sets them apart. The battery plants, the Supercharger network, and the willingness to try new things on the fly are huge differentiators. Heck, Toyota wanted the states to fund hydrogen stations, and it’s obvious how well that’s going.

    Tesla’s only real competition might come from VW, but VW’s efficiencies aren’t there yet.

    • 0 avatar
      EBFlex

      Why would any manufacturer commit to go 100% EV? EVs are far more damaging to the planet than ICE vehicles and that doesn’t play well in todays “everything must be green but only for the USA” world

      • 0 avatar
        jmo

        Hahahah – love the parody. No one takes you seriously – just FYI.

      • 0 avatar
        Gabe Ets-Hokin

        That EVs “are far more damaging to the planet than ICE vehicles” is 100% your opinion. There is very little factual evidence to support this.

        https://www.epa.gov/greenvehicles/electric-vehicle-myths

        https://www.usatoday.com/story/news/factcheck/2020/10/17/fact-check-electric-cars-emit-less-better-environment/3671468001/
        https://www.livescience.com/electric-cars-environment.html

      • 0 avatar

        No part of that is accurate.

        • 0 avatar
          EBFlex

          I mean reality is vastly different but you can believe the EV nonsense if you want.

          https://www.thisismoney.co.uk/money/cars/article-10161697/Volvo-says-electric-car-making-emissions-70-HIGHER-petrol.html

          • 0 avatar
            FreedMike

            Once again, just to make sure everyone knows how full of it you are, here’s a quote from this article ***you posted yourself*** to prove how much worse EVs are for the environment:

            “An electric Volvo C40 needs to be driven around 68,400 miles to have a lower carbon impact than the petrol version – if powered by a global electricity mix – but only 30,000 miles if powered by wind-generated electricity.”

            Therefore, assuming that nothing changes at all in the energy mix, and assuming the average car is driven 15,000 miles per year or so in the United States, and assuming the average car lasts 12 years or so, your own source says that an EV becomes greener than a conventionally powered vehicle. Again, this is ***according to the source you posted yourself.***

            So, you just took your own argument, shoved a 10-megaton nuke up its’ a**, and hit the big red “detonate” button.

            Good news, though, the manager of the Comedy Shack is keeping you on until next week. Rimshot.

        • 0 avatar
          el scotto

          @Jo Borras Sir, the @ can be handy in a chain of responses. My apologies for not having the accent set up on my keyboard.

      • 0 avatar
        el scotto

        @EBFlex There are existing companies that are 100% EV. Planned, designed, raised funds for, and have a 100% EV product line. Spend some time in Germany; why they have a political party called; wait for it, “The Green Party” Or go to Old Blighty in February, you’ll appreciate your jumper from Marks and Sparks.

      • 0 avatar
        Ol Shel

        What brand of cigarette does your doctor recommend?

    • 0 avatar

      I think Musk, circa 2010, would have taken the money with the right clauses in place. Obviously we’ll never know, but he took the first $50 million, why wouldn’t he take an extra zero?

      • 0 avatar
        el scotto

        @Jo Elon had already made his pile off Paypal. Besides, it never was the money; it was all about cultures and attitude. Toyota is a conservative button down engineering based car company. They’re already rich. Over half the young IT working for me would leave to take a job at a start-up with stock options to hopefully hit the one in a million shot.

        Or: Plan, test, make, record failures, record defects, improve; repeat this cycle for years if not decades. Order a case of Monster Energy drinks, have food delivery on speed dial, code for 56 straight, end up with the killer app.

  • avatar
    mor2bz

    I must be really smart.

  • avatar

    Doesn’t anyone realize that Toyota sell more vehicles in one year than Tesla does in a decade! When the sales are tabulated for 2021 Toyota will probably be the nations top selling brand.

    GM is the loser not Toyota.

    In its quest to become a EV company GM has relinquished its 90 year reign as America’s top carmakers. If you have not noticed Toyota has just released its first electric car and it will most likely be better than the fire-prone Bolt.
    Toyota is taking a more disciplined long-term approach to electric vehicles, and in the long run it will beat GM in both ICE and EV vehicles. It seems Toyota always wins and GM comes up the loser.

  • avatar
    ToolGuy

    “Let’s face it, if -I- had sat down at a Toyota board meeting and told everyone present that Tesla would be worth more than every other carmaker combined in ten years’ time, no one would have believed -you-.”

    If -I- told you that TTAC currently has a competent Editing process in place, no one would believe -you-.

    (Cheap shot I know – Happy Wednesday. Jamaican food *and* a conveniently-located Target store? Man I need to move.)

  • avatar
    EBFlex

    Toyota would have been foolish to buy any part of Tesla. With such subpar quality, Toyota would have had to invest millions maybe billions to make Tesla vehicles meet their quality metrics. Then you have the subpar software, subpar design etc. Tesla is fine as a very small niche manufacturer that loses money on every vehicle they sell but Toyota has standards and it would drive losses even farther to get Tesla up to par with legacy manufacturers in terms of quality and engineering.

    Plus Toyota prices itself on being a rather green company mainly driven by the Prius. Toyota doesn’t want control of a company that makes vehicles that are amazingly damaging to the planet. It goes against all they stand for.

    • 0 avatar
      FreedMike

      “Amazingly damaging to the planet.”

      EBFlex, ladies and gentlemen – he’ll be here at the Comedy Store all week. Remember to tip your waitress! Next up: Gene, Gene, the Dancing Machine!

      • 0 avatar

        FreedMike gets a +1 for this one. I’ll be sure to catch EBFlex at the Chuckle Hut next Thursday and let you know how it goes. Seems more sad than funny, to me, but then again so did Steven Wright and Mitch Hedburg, so it might be good.

      • 0 avatar
        Lou_BC

        @FreedMike – LOL

      • 0 avatar
        EBFlex

        “Freed Mikey: nonsensical drivel”

        I know you don’t like fact but you can’t ignore them (just like how you think masks work….that’s comedy):

        https://www.thisismoney.co.uk/money/cars/article-10161697/Volvo-says-electric-car-making-emissions-70-HIGHER-petrol.html

        Also funny that you think Toyota doesn’t have higher quality metrics than Tesla. It’s clear they do. The cheapest Toyota has a higher level of quality than the most expensive Tesla

        • 0 avatar
          Lou_BC

          @FreedMike – Look what you’ve done. You’ve shook the tree and made the squirrel drop his nuts.

        • 0 avatar
          SoCalMikester

          my 15k out the door J vin could very well be the last car i ever have to buy

        • 0 avatar
          FreedMike

          @EBFlex:

          You need to read the article you posted, genius. Here’s a quote:
          “An electric Volvo C40 needs to be driven around 68,400 miles to have a lower carbon impact than the petrol version – if powered by a global electricity mix – but only 30,000 miles if powered by wind-generated electricity.”

          So, given that the average American drives around 15,000 miles a year, the EV becomes greener between four and five years of use. Average lifespan of a car is now about 12 years. And that’s assuming that the current mix of energy production stays in place. You’re full of crap.

          And where did I ever say Toyota doesn’t have higher quality metrics than Toyota? I’ve trashed Tesla quality time and time again. You’re full of crap.

          Open mike night is tonight. I hear they’re giving away a box set of Weird Al Yankovic discs to the winner. Run along now and you’ll be able to sign up.

          • 0 avatar
            Lou_BC

            Like I said, “You’ve shook the tree and made the squirrel drop his nuts.”

            LOL

          • 0 avatar
            el scotto

            @FreedMike & Lou_BC Sirs, her in the USA, Social Security checks are deposited on the 4th of every month. You would think most of our usual suspects could get their meds refilled by the 10th.

          • 0 avatar
            Lou_BC

            @el scotto – LOL.

            When I worked ER and pre-hospital emergency services we would dread “Welfare Wednesday”. Sort of the same idea. Welfare and various other cheques were issued on the last Wednesday of the month. That meant Wednesday night and the following 3-4 days would be hell on wheels. Overdoses, alcohol related problems, domestic disputes, assaults etc.

          • 0 avatar
            FreedMike

            EBflex is strictly in it for the attention. He/she (they?) says dumb stuff to get a rise out of people. Same for Comrade Slavuta. Difference is, I think Slavuta gets a 18 kopek commission from the Russian government for every post he makes.

  • avatar
    watersketch

    10 yrs ago? I heard a MB Exec 2 years ago talking about how Tesla would never make it because Tesla is introducing untested tech features while MB is testing their automated features for 5 years before bringing them to the public. He believed that Tesla was going to get sued/regulated out of business.

    His best quote- they aren’t selling cars they are selling a cellphone.

    • 0 avatar
      CoastieLenn

      I mean, the exec isn’t exactly wrong. The majority of Tesla owners don’t buy a Tesla for the “green” aspect, they buy it for the tech and the image. Much the same as an iPhone.

      • 0 avatar
        jmo

        “they buy it for the tech and the image”

        Is that a large part of what motivates all car sales and premium brand car sales especially.

      • 0 avatar
        deanst

        The top 10% of earners in the U.S. – Tesla’s target market – have the worst environmental footprint in the world. I guess it’s good they’re buying a Tesla versus another ICE Porsche, but they’re still using it to go from their monster home to one of their vacation homes…..

        • 0 avatar
          SCE to AUX

          “worst environmental footprint” means little if these people are also responsible for the most economic output.

          For example, their ‘monster’ home employed a lot of people upstream to build it.

          If you want everyone to have the same environmental footprint, then we’ll all be poor, with no incentive to produce more.

  • avatar
    probert

    RIP Dean Stockwell

  • avatar
    FreedMike

    I think Tesla should have hooked up in some way with Toyota for one simple reason: they’d have learned how to build cars. As it is, they basically had to learn how to do it on their own, and it shows. The lack of build quality is the chink in Tesla’s armor, and I think they need to fix that, stat, before the competition gets better at making EV tech (which is already happening).

    • 0 avatar
      SCE to AUX

      Tesla’s long-running quality issues are a bit puzzling. They didn’t just hire a bunch of gamers to design cars and mfg plants; they hired real, actual automotive engineers from other firms.

      While it is true that poor quality can dog some brands for a very long time, I suspect Tesla’s are rooted in having insufficient time to address them, and the drive from Mr Musk to always look forward instead of backward.

      Seemingly simple things like panel alignment are actually very complex problems. In most cases, you want a poka-yoke assembly that just falls together, but engineering such an assembly might require touching a hundred parts of the car and/or tooling to get it right.

      With demand outstripping supply by almost a year at this point, Musk probably thinks it doesn’t make sense to address quality issues because there just isn’t a pragmatic need for it. They did lose a sale from me (in part) because of obvious quality problems in the showroom Model 3, but they have no way of knowing how many more customers they’d have if things improved.

      But to your point – yes, Toyota could certainly teach Tesla about quality, starting with panel alignment and paint finish. Actually, so could Hyundai or Nissan.

      • 0 avatar
        FreedMike

        Exactly, and established manufacturers have been doing this for many decades – and some for over a century – so they’ve figured the car-making game out.

        I do think Musk will address the quality problems when there’s a business case for it. At the moment, they’re building everything they can make, so quality probably isn’t the foremost issue the company faces. But if I were him, I’d take a nod from Toyota and reinvest a major chunk of those profits into quality improvement, stat. Tesla’s head start over the competition isn’t going to last forever.

        • 0 avatar
          jmo

          ” Tesla’s head start over the competition isn’t going to last forever.”

          That’s why all the resources are going into maintain that head start. As you said there isn’t a case to be made for diverting talent away from maintaining the head start toward minimizing panel gaps.

          • 0 avatar
            FreedMike

            @jmo:

            Quality is a consideration for car buyers, particularly in the luxury space. Don’t believe me? Do a Quija session with the head of the Cadillac division circa 1980 or so.

    • 0 avatar
      Astigmatism

      Yup. This is why I’m not considering a Tesla for our next car. I’m trying to talk my father-in-law out of one but he’s dead-set on a Model 3; for our use, we’re thinking of an EV6.

  • avatar
    FreedMike

    @Jo:
    “Nerdy/edgelord/incel”? OK, I’ll go with the first two, but “incel”? Let me introduce you to one – my ex girlfriend’s 28-year-old kid, who literally lived in mom’s basement while splitting his ample free time between Minecraft and hentai. Used to complain about women ALL the time, probably because they didn’t serve themselves up to him in Sailor Moon outfits.

    Kid’s never been laid – or kissed, far as I know. He had a woman literally throw herself at him at work. Even showed me her picture – she was darned attractive. He turned her down because…get this…she likes to drink from time to time. Solution? Let her have a drink but politely decline one yourself, then retire to the bedroom. Everyone leaves happy. Win-win. Nope…she was beneath him.

    THAT is an incel. That is NOT Elon Musk.

    • 0 avatar
      SPPPP

      But Mike,

      “Incel” is short for “involuntary celibate”. Meaning, a person who is sexually rejected by others. If a person has offers of connection and refuses them, that makes the person voluntarily celibate – not an “incel”.

      Unless you think the kid has some kind of psychological problem that makes him incapable of choosing to connect, meaning he lacks agency in his own situation?

      (Frankly, I think the term “incel” is offensive. Isn’t calling someone an “incel” a thinly veiled personal insult, and advocating discrimination on the basis of attractiveness or other personal qualities? Seems like this is a blind spot for most socially conscious people.)

  • avatar
    slavuta

    “investors believe that Tesla is worth more than Toyota, Volkswagen, General Motors, and Honda … combined”

    China will send their beliefs crushing

  • avatar
    Rick T.

    He said, “you and I will never be rich,” in between bites of Jamaican food. “We’re too smart.”

    So Musk isn’t smart? I don’t follow this as closely as many of you but I’ve never heard him described as not smart.

    • 0 avatar
      SPPPP

      I would say he’s smart, but reckless, and thinks he is even smarter than he actually is. It has worked out well for him. Some other people for whom it didn’t work out so great would be, Jeff Skillings, Bernie Madoff, John DeLorean … etc.

    • 0 avatar
      SCE to AUX

      “Smart” people – in this context – are those who balance risk and reward.

      Mr Musk is certainly intelligent, but he takes business risks others are unwilling to contemplate – not so smart in the boardroom sense of the word.

      I mean, imagine telling Ford’s BOD in 2010 that you want to build a $100k 4600-lb car powered by laptop batteries, and its production will soon consume a significant portion of the world’s lithium ion battery supply. And, it will lose money for many years. No, if you’re on the Board, you laugh the guy out of the room and build a Ford GT instead.

  • avatar
    Greg Hamilton

    We should have all listened to BigTrucksReview. He bought Tesla at $200 (which is equivalent to $100 because of the split that followed) so we could have all had a ten bagger, and bragged about it at the water cooler.
    I think that he and DeadWeight shouldn’t have been banned. I think we are all big boys and could handle differences of opinion. Or maybe not.

    • 0 avatar
      Lou_BC

      @Greg Hamilton – “Big” was a shameless self-promoter. I have zero issue with him being banned. Deadweight was rather blunt and hilariously caustic and should not have been banned.

      • 0 avatar
        formula m

        Ya when Big started going on about his AR-15’s in car chat it was enough of that…
        Dead was the reason I started reading the comments section on Cadillac articles:)

    • 0 avatar
      FreedMike

      BTSR had it coming. I seem to recall one of his last posts being about how women “like the fist”. Two ways to interpret that, and neither of them were good.

      No loss.

      Either way, moderation around here is practically nonexistent these days. And it’d be unnecessary if we had an “ignore” button – trolls like BTSR get their jollies elsewhere.

      • 0 avatar
        Lou_BC

        @FreedMike – I’ve been finding that using the “internal” ignore button works great on Echo Bravo. Hunting for outrage eventually fails. A perfect example is Mr. Posky. He got a bunch of 200 plus hits on the outrage train and now most seem disinterested. Maybe time for a vaccine or mask article to fan the flames.

  • avatar
    pmirp1

    I am not an expert in Japanese culture, but to me it seems they have a culture where incremental progress and change and refinement is valued most. Whether its a sword, or an automobile. They clearly don’t do change good. Look at their infotainment screens and ways to control. While America and rest of the world grasps it, Japan struggles. Look at the bad controls in Lexus and Acura vehicles for example.

    Because of that Tesla and other American manufacturers is where its at. Tesla, Rivian, Lucid. Forget American Legacy manufacturers if you want to look at future.

    Tesla is the Amazon model. Doesn’t matter how many cars they sell today. Its the potential stupid. They are committed, they get it. As do Rivian and Lucid.

    Poor Toyota and Japanese. They are the Toshibas, Sonys, Panasonics of TV industry’s yesterday to today’s Samsung and LG TV.

    • 0 avatar
      Lou_BC

      Toyota is very conservative. You see that in their products. They excell at building reliable appliances. They struggle with vehicles that are meant to be emotionally engaging. They are painfully slow at evolution.

    • 0 avatar
      SPPPP

      Uh, aren’t these the same Japanese automakers from the 1980s, that relentlessly advanced automotive technology, ripped open the bloated belly of the American car market, developed gadget after gadget that they exported to the rest of the world? Are we talking about the same companies?

      • 0 avatar
        pmirp1

        Yes. But if you recall 1980s, American car makers were ripe for picking. The unions had handcuffed American companies with legacy costs. The management was in it for a quick buck. No one was willing to risk. Milk the cow. Japanese yen was ruling and Japan could afford to spend on features. Even then, what Japanese did was not renovate, but refine. Reliability has always been Japan’s go to move. Corolla and Accord and Camry and Civic were simply good reliable vehicles, but not innovative.

        Fast forward to today. Tesla and Lucid and Rivian are on virgin grounds. Don’t have to deal with legacy costs and idiotic unions. Biden is clueless when he wants to reward unions with electric credits but not include Tesla (in highest levels of credit). And the canvas is blank, they have to create and so they thrive. This is exactly where Japanese struggle (really the Asian culture struggles). They can not renovate, but they can replicate and refine. If Japan survives this wave of renovation, they have a chance, but right now they are missing in action. And Tesla has a stupendous lead. As even Germans are getting destroyed and GM and Ford are barely there.

  • avatar
    Lightspeed

    Too smart to get rich, I absolutely agree and live this every day. Around here the housing market took off. A guy in the neighbourhood who had a delivery business with a ratty old van started a house framing company. Within a couple years he was the biggest framing subcontractor in the city, I figured he had to have made about $20M one in one year with zero experience in that business.

  • avatar
    Ol Shel

    People refuse to address the fact that Tesla is run by a mentally ill billionaire who makes a lot of rash decisions. He’s not going to become any less ill or more rational.

    Tesla also refuses to make SUVs. Emerging electric SUVs from competitors will hurt Tesla sales greatly. Tesla has a dismal record of keeping their product current, other than continually increasing prices for previously-included content.

    As the only game in town, Tesla could grow. Against mature EV competitors, it will not.

    • 0 avatar
      28-Cars-Later

      “People refuse to address the fact that Tesla is run by a mentally ill billionaire who makes a lot of rash decisions.”

      Until recently the nation was run by a mentally ill billionaire and is ostensibly at this very moment being run by a mentally ill multi-millionaire who hasn’t had a real job in 48 years. I fail to see your point.

      “Emerging electric SUVs from competitors will hurt Tesla sales greatly.”

      Not really, Tesla owns the space for the foreseeable future. I’m not sure what their marketshare is atm, has to be north of 80%. I predict they keep 70% as time goes on.

  • avatar

    But we are smart and Trump is dumb, and know what? He won the elections.

  • avatar

    I have nothing therefore I am smart.

  • avatar
    ram1901

    Great article with lots of good incites into Toyota and Tesla.
    In reviewing the comments I once again saw a discussion about ‘panel gaps and paint’ which always makes me smile.
    I never heard of or thought about ‘panel gaps’ until 2015 when I started reading about this upstart company named Tesla. Prior to that time, when I went in to buy a car, and believe me, I’ve bought more than my share of cars since I got my license back in the 60’s, I NEVER checked for ‘panel gaps or paint’. I test drove the car and if it started and performed to my satisfaction, I would buy it. In November of 2015, I bought my retirement car. A Tesla, Model S 70D with white paint and what many describe here as ‘panel gaps’. Strange how the car starts everyday and performs above and beyond my lofty expectations and yet, it has ‘panel gaps’. And yet, since the day I bought my neighbors, my friends, total strangers tell me how beautiful and sporty looking my car is…. even with ‘panel gaps’. I don’t get it. :)
    Bottom line: the majority of car buyers could care less about ‘panel gaps’. That’s my story and I’m stickin’ to it!11

    • 0 avatar
      Lou_BC

      I sort of agree. Panel gaps are the bloggers equivalent of presstitutes complaining about hard touch plastics. When I was a kid most vehicle interiors were painted metal.

    • 0 avatar
      SCE to AUX

      When the door chrome sticks up 1/8″ above the rear quarter chrome trim, you can see it across the room. That’s how the Model 3 was in 2018, and that’s how my coworker’s Model Y is today.

      There are well-documented (video) cases of glass roof panels flying off Model Ys, and rear bumper covers coming off Model 3s driven in heavy rain.

      Tesla is good at painting an orange peel texture, which also rusts when the adjacent panels rub against it.

      I bought a lowly Hyundai EV, whose build quality was perfect. Sometimes the exterior appearance speaks to the quality of the hidden parts, and sometimes it doesn’t.

  • avatar
    Art Vandelay

    So it is safe to say Tesla would not be the Tesla they are in 2021 with Toyota leadership. The management styles could not be farther apart. Would Toyota build the Cyber truck? Would they build all of the batcrap crazy performance models? No. You’ll get an EV Camry with 2010 era Tesla mechanicals. And an EV RAV 4 that you can’t seem to locate at any dealer.

    Panel gap will look nice though and most certainly the bumpers will stay attached. And nobody would care.

  • avatar
    jimmyy

    Toyota has this right. EVs are a fake market that only exists because the Dems are handing out thousands in incentives. That is the only reason they exist. Get rid of the incentives, and EVs are gone.

    The Dems are in trouble because Nov 2020 was the last voting scam. And, starting in 2022, the EV incentives will be cut. And, after 2024, they are all gone. All Toyota needs to do is nothing and they will win.

    The TSLA stock valuation relies on govt EV incentives forever and that will never happen.

    • 0 avatar
      FreedMike

      1) Last I checked, the government handed out billions in EV incentives during the last administration. Guess Trump was a closet Democrat. Derp.

      2) The federal tax incentives to buy Teslas ran out years ago. Derp.

      You managed a double derp here. Well played, sir.

      • 0 avatar
        jimmyy

        FreedMike, those incentives were appproved under Obama and many Rs were highly critical. Those investing in EVs are assuming the govt handout will continue. That will only happen if the vote scam happens again … they are dead wrong

        This country will change drastically starting in 2022, so EV investments will take a huge hit. Ford and GM are making a big mistake going EV, and this is very very bad for Detroit.

        • 0 avatar
          FreedMike

          If you want to know what’s wrong with American politics, this “post” is Exhibit #1.

          To wit: to hear this guy tell it, the Republicans hated, hated, hated EV incentives, but blames the Democrats even though the Republicans controlled ***all three branches of government*** for two years. Translation: we can’t pass legislation, but vote for us anyway.

          I’d say it’s funny, but this kind of derpity-derp is what passes for political thought in America circa 2021.

          • 0 avatar
            jimmyy

            Nope. The credits paid out while Trump was in office were approved under the Obama administration. It is very difficult to reverse that in the next administration. That is govt 101.

            Now, the Biden administration is planning to increase those and they will make sure they last well into the next administration because they know they are done once the voting gets fixed. That is how the game works.

          • 0 avatar
            FreedMike

            Actually, the tax incentives were created by the Energy Improvement and Extension Act of 2008. Last I checked, Obama was not in office in 2008. However, a bill was passed in 2009 to end the credit after a manufacturer sold 250,000 EV units, and Obama was president at that time.

            https://www.congress.gov/bill/110th-congress/house-bill/6049

            Therefore, the truth is that the tax credit STARTED under Bush and was LIMITED under Obama. And Republicans did ***zero*** to end them when they had control of all three branches of government for two solid years.

            And, yes, if Congress passes a law, it can repeal it later. That’s why the Republicans tried repealing Obamacare, another law that Republicans supposedly hated but couldn’t figure out how to repeal.

            But remember…it’s all the Democrats’ fault. Righty-o.

            Derp…

          • 0 avatar
            jimmyy

            FreedMike, only low income low class people call other people derps.

            Furthermore, you are misrepresenting the facts. Have a nice day.

        • 0 avatar
          el scotto

          @jimmy For two years the Republicans had the presidency, the senate, and the house. They were like Minnesota Fats standing in front of a pool table. Instead of making winning shots they just stood there and chalked their sticks. The best they could do was try to overturn Obamacare. They failed.

          • 0 avatar
            jimmyy

            Tax incentives or stimulus measures that pass the house and senate as part of a long term budget or stimulus bill are very difficult to overturn, especially when you have a slim majority.

  • avatar
    el scotto

    Around 1900, if one had a car, one had a man to drive it and work on it. Your man went to the general store to buy gasoline. Then Henry Ford busted out with the Model T. People were still buying gas at the general store.

    Will there ever be a bust-out EV equivalent of a Model T? If so, who be the first to set up possible “electric stations” wherever people can park? The big Oil companies fell over each other setting up gas stations.

    I still think many of the current EV makers are the equivalent of a Stutz motorcar. Hint: part of the old Stutz factory is a bus garage in Indianapolis. Some may make it until the next serious economic downturn like Auburn. The museum in Auburn, IN is well worth visiting.

    It took Henry Ford four or five times to get it right. Volumes have been written about what he got wrong. GM was formed by cynical investors wanting to get in on the booming car industry. Then GM became a company to mainly buy DuPont products.

    I’m not going to hand hammer a uni-body in a rented garage and have one of the B&B go in with me and supply the batteries and have be the Apple equivalent of an EV.

    Car making is capital-intensive. Hundreds of millions of dollars intensive. Not some guys day trading in their sweatpants and posting on Reddit.

  • avatar
    jimmyy

    The US auto industry has reached the point where it can only survive making vehicles with big US govt incentives. It can’t compete with foreign manufactures, so they are restructruing to live off US govt incentives. THat is what the EV game is all about. What a shame.

    • 0 avatar
      el scotto

      @jimmyy NO Tesla and the Chevy Bolt are eligible for government subsidies. No Silverado/Corvette/Camaro or F-150/Mustang or Ram/300/Charger get government incentives. All eight of those V-8 equipped (as Our Lord intended) are selling quite well.

      You could view most car makers complete lineup as an entree. EVs are the equivalent of asking for green beans instead of peas.

      • 0 avatar
        jimmyy

        The US auto industry keeps droping segments because they can not compete. They are down to a handful of profitable models.
        Soon, they will be down to EVs only, and the only way they can compete in the EV marketplace is if the foreign manufactures do not get the US govt incentives. What a shame.

        • 0 avatar
          el scotto

          @jimmyy The domestics got out of segment were the best they could hope for was 3rd place after Toyota/Honda. Oh there were debates on this august site that that stopping making Impalas or Fusions was giving 100K sales a year. The best either of those two could do was 3rd place in their segment. Why spend hundreds of millions of dollars for a product that ends up being competitive, not a class leader?

          Year and year out large pickup trucks are consistently the number one selling vehicles in North American. Large American built SUVs don’t fall far behind in sales.

          Tesla sold just under 500,000 vehicles in 2020. Ford sold over 700,000 F-series trucks in 2020. Chevy sold almost 600,000 Silverados in 2020. Ram sold 500,000 trucks in 2020. GM sold over 250,000 Sierras.

          A market of over 2 Million highly, nay hugely profitable vehicles is not going to disappear overnight.

          I do realize that pickups may be a rare sight in the rarefied areas you claim to reside. Manhattan Beach and just Manhattan as you’ve stated before. To be fair, no pickup has a convenient place to put your European man bag.

          Pickups will continue to be built because customers want them. Big hint: The millionaire next door? Probably driving a US made truck. No, pickups will not be legislated out of existence any time soon. No, US automaker won’t be down to EVs only in the near future. I’m not sure why you think huge swaths of the auto market will blow away like dandelion spoors in a strong wind. I’m quite sure the pickup and SUV owner would love to hear from you on why this is going to happen.

  • avatar
    conundrum

    Toyota operates in the real world. The stock froth EV market operates on Wall Street. Do you think Toyota really cares only about its stock market valuation? Or executive “compensation” depending on said stock market valuation? If it did, it would have been using its $36 billion cash hoard to buy its stock back. Like so-called red-blooded US companies keen on seriously over-paying for merely average executive talent have done, such as Boeing and GM. I mean, what’s really happening is greedy corporate execs seriously wanting to overpay themselves via stock options bid up the stock price using company money and to hell with everyone else. This is the current “business” model. A scam. It’s based on no increase in corporate productive capacity or efficiency, merely paper worth.

    Tesla’s about half and half down that road. Building capacity, yet gilding the froth stock lily too. Still, with the usual Muskian nonsense going on recently about him not wanting to share the wealth via taxation with the citizens of the country that bankrolled his meteoric rise, Tesla shares have fallen 20%. Seeing that the “market” value was naught but froth, aerated foam, and paper anyway and nothing much to do with physical assets or company earnings, nobody is yet panicking, except those who were about to cash out and adjourn to the Cayman Islands or New Zealand. Musk, by reducing his net worth but with the legal need to cash in some of his stock by year’s end, seems to my jaundiced eye to have decided — if the USA wants my taxes from personal stock sales, I’ll rattle the market to reduce its value and the amount of taxes I therefore have to pay, thereby flipping the bird at everyone else, viz his stockholders and the country — everyone but his own special wonderful self whose genius passeth mortal understanding. He knows his audience well, much as Edgar Allan Poe describes in his classic short story “The Purloined Letter”. He’s a master of misdirection with those stolid people who think of themselves as business types or wanting to join a religious-style sect.

    Toyota on the other hand uses logic anyone can understand for not blasting out EVS like BB shot as corprate flavor-of-the-month.
    .
    https://www.reuters.com/business/cop/toyota-says-large-parts-world-not-ready-zero-emission-cars-2021-11-11/

    That’s why Toyota isn’t going all out EV, yet. Hard to flog EVs where there is little electricity for charging batteries, just enough for cellphones. But North Americans don’t think of that. The world as it looks outside their personal window is the world everywhere to these unimaginative folk, and so dimbulb niche-first-world-only assertions like a lot of those in the above comments make me laugh. Toyota’s the world’s lowest cost producer of the bigger automotive firms, with assembly methods and worldwide factories not overly reliant on robotech, merely old-fashioned logic and a labour/capital split that minimizes overall cost. It also apparently possesses some ethics beyond executive greed. How un-American!

  • avatar
    mcs

    @conundrum: “That’s why Toyota isn’t going all out EV, yet.”

    Bringing out 15 new BEV Models by 2025 isn’t going all out??? WTF?? Fifteen!! Think about it. In just 4 years.

    https://www.theverge.com/2021/4/19/22391738/toyota-electric-vehicle-strategy-bz4x-concept-subaru

    Here’s a Toyota press release where they are investing $3.4 billion in the US for battery production. That’s not going all out??
    https://global.toyota/en/newsroom/corporate/36193702.html

    $3.4 billion not enough? Here’s where they are spending $13.6 billion for solid-state battery technology. They also own over a thousand solid -state battery patents. Not going all out???

    https://www.motortrend.com/news/toyota-battery-bev-hev-solid-state-future-investment/

    • 0 avatar
      ToolGuy

      @mcs,

      Despite your outrage, @conundrum is absolutely correct – “Toyota isn’t going all out EV, yet.”

      From your link (good link, thank you):
      “• To meet the growing demand, Toyota continues to steadily expand its lineup of electrified vehicles, including hybrid (HEV), plug-in hybrid (PHEV), fuel cell (FCEV) and battery electric vehicles (BEV), from 55 models today to about 70 models by 2025.”
      “• Of the 70 models, 15 will be BEVs, including seven Toyota bZ (Beyond Zero) models.”

      15 BEVs out of 70 ‘electrified’ models is by definition not “all out” – and this of course excludes ICE models.

      The $3.4 billion is over 10 years. What is $0.3 billion as a percentage of Toyota’s cash on hand? Not all out.

      Take the $3.4B plus the $13.6B and add whatever else you want over the ten years and then take that sum as a percentage of Toyota’s total assets. Not all out.

      Bonus: Consider the timing of this announcement (October 2021) and look around the industry. This is not “all out” level.

      Let’s say Toyota has some impressive things in the works EV-wise. Let’s say that if they are pacing themselves, they have valid reasons. But let’s hold up on the reflexive “??? !! ???” level of defensiveness.

      (@conundrum’s reuters link is also excellent)

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