In this article, I cover last week’s Lexus executives’ presentation to me and other journalists, and their responses to a question that challenged them about the weaknesses they saw in their plans.
Last week I was invited to spend 3 days in Plano, Texas to learn about the latest new cars from Lexus and Toyota, to drive many of them, to have excellent access to both marketing and production executives, and probably to serve delicious food with hope. . I would cover their products in as much light as possible. This is a continuation of a Lexus RX / RZ article I wrote last week. See this latest press release for more information on full electric RZ.
During the first presentation, they considered their investment in becoming a carbon-neutral company. These include:
- A $ 1.29 billion investment in a new battery plant in North Carolina that is scheduled to open in 2025 and create at least 1,750 new jobs.
- An additional $ 90 million investment for the two existing plants – one in West Virginia to increase hybrid transaction production and one in Tennessee to increase production of hybrid transaction boxes and enclosures.
- An investment of $ 383 million for four plants to support the production of four-cylinder engines, including hybrid electric vehicles. The four plants are in Alabama, Kentucky, Missouri and Tennessee.
- A secure partnership with the 100% renewable energy EVgo charging network, more than 800 high-speed chargers and thousands of charging stations serving customers in Toyota EVs in more than 68 major cities in 35 states.
In addition to their plans for carbon neutrality, they certainly noted the progress they have made in other areas.
They discussed and I got acquainted with their new Lexus Multimedia System. This new interface is a big improvement over previous generation smaller screens, which have to be controlled with a touch panel that confuses them. I also found that their voice recognition is easy to use and very accurate. Because I drive a Tesla every day, I am often a little confused when I return to the car with traditional steering gear, but I found this new interface to be very easy to learn and easy to use. During the three days I was there, I had to drive about 100 miles with him.
Did you know that 23 children and 59 pets died in the United States last year as a result of being left in a hot car? Toyota hopes to reduce this in future cars. Not on sale today, but they described proof of a concept called cabin awareness. This proof of concept was created by their team members using special millimeter-wave radar technology integrated into the car’s interior to detect the living form left inside the car.
Even if the child is in the car seat or in the footwell, or even in the trunk, if a creature is found after the driver leaves the vehicle, the child can pick it up and have a number of warnings that can alert other people. this is a potential threat. First, the warning light on the instrument panel beeps, then the alarm sounds and the emergency lights flash. After all the early warning signs, the owner will receive a warning on the phone through the Toyota application and text messages. Now, if all this fails to rectify the situation, they can remotely activate the car’s cooling system and communicate with the first intruders through the integrated SOS function.
Last year, they also introduced a privacy portal available to Toyota and Lexus. This is the first time I’ve heard of such an easy way to manage your data. It gives customers full access to understanding how Toyota uses automotive information and provides comfort and safety improvements during the driving experience. However, it also allows customers to have more limited control over what they want to share and what they don’t want to share. So, in short, not everything is inside or everything – here the customer has complete control over what they want to share. They want to be distinctive when it comes to industry privacy and provide control and choice around personal and automotive information.
Difficult Question for Lexus Management
Of the 131 journalists who attended the event, I am sure I asked the most difficult question. After the event, several journalists came to me and thanked me for asking a good question.
Question: I’m excited to see the growth of electric and hybrid vehicles in your new presentations, but I’m worried about whether they’re compatible cars or low-volume cars. Are they available in 50 states? It often turns out something as interesting as the RAV4 Prime, but since no one can get it, can you give us an idea of the scope of this?
Answer 1: “It is a good question. Every OEM has the same concerns. You have a limited number of batteries. What is the purpose of the industry? To produce more EVs and bring more plugins? The goal is carbon neutrality, and what is the best way to achieve carbon neutrality? I read your information, so I know where you came from. We want it to be 50 states. We want everyone to participate in the direction and intention to be carbon neutral. Every competitor in this industry finds a different way to solve it. You’ve heard from us, whether it’s a Toyota or a Lexus, that our goal would be to continue to listen to the market, to deliver power units that meet the needs of every person in every market. Through hybrid, plug-in, fuel cell technology, electric battery. We believe that this is what consumers want – not just a choice, but their different needs. We will not give exact figures today, but let me tell you that our goal and intention is carbon neutrality. What we promised in 2017, before we talked about anyone – when we had a plan to be carbon neutral, we were going down 90%. We are still on that path. We will keep our promises to the world. We will continue to do so. We will continue to see how many people we can get involved in any state or any part of North America. “
Answer 2: Another executor added: “From a brand perspective, electrification is a key component of our marketing and brand strategy. We want to talk about the spread of the model, the higher prices, the more electrification we have, not only for better efficiency, but also for the ride to be fun. As you know, the peak torque at zero rpm, which comes with an electric motor and combines it with an efficient gas engine, is part of Lexus’ riding signature and the fun that comes with the Lexus series. ”
[Editor’s note: I think the executives answered Paul’s questions largely by not answering them. There is no real indication that its electric models will be high-volume, mass-market vehicles. Also, the note about limited battery supplies implies that Lexus has not gone ahead as a leader and secured very large volumes of battery raw materials or battery cells or packs in order to be able to produce mass-market models. Instead, it appears to be a convenient excuse that helps Lexus to not do what it didn’t want to do anyway. That’s my reading, at least, but I’m sure also the reading many people here will have. —Zach Shahan]
After talking to other executives about electrification plans, two things became clear to me. First, they know their customers and know that most of their customers are not yet ready for electric cars; second, they do a lot to help the climate, unlike Tesla.
Now, after 12 years of trying to buy electric cars with my friends (sometimes successfully, but not often), I am very pleased that most US customers are not ready for it if you both have a better product and you don’t introduce it. There is a lot of anti-EV propaganda out there, and Toyota and Lexus don’t always help. Because of this and all the infrastructure problems, and even the political problem that some don’t want to buy an electric car, it will be a signal to friends that they are progressing (which is a very bad etiquette for half the country), which seems to they try to reach. In the truck market, this even means emphasizing the hybrid technology used to give their cars instant torque and great fuel savings, as hybrids are not associated with the macho image, which is so important to this market.
For those who are not ready to join – and me et I wish Toyota and Lexus would do more to promote the plugins (PHEV and BEV) – Toyota and Lexus, like the rest of the industry, lead the industry by almost four times the number of hybrids. Their first-quarter release shows 25.8% hybrids. Dividing 236,430 hybrid sales by 3.3 million US car sales is a 7.1% figure. To read the Toyota side of the story, take a look at the North American Environmental Report, which highlights many of its achievements and goals, including having 55 hybrid models and more than 2 million sales per year (both global figures). With hybrid cars, which are about 30% more efficient (according to my estimates), it saves a lot of fuel, pollution and carbon emissions without the need for behavior change or charging infrastructure.
Disclosure: I am a shareholder of Tesla [TSLA]BYD [BYDDY]Nio [NIO]XPeng [XPEV]and Hertz [HTZ]. But I do not give any investment advice here.
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