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Toyota EV U-turn as VW launches China electric model

Toyota accepts defeat in battle to skip straight to hydrogen power.

Described as an "agonising" decision, Toyota has taken a U-turn and will introduce hybrid and all-electric vehicles to China, despite its stated long-term business strategy of down-playing electric power in favour of hydrogen fuel cells.

Toyota car dealers in China

Hydrogen - a tough sell? Image: SPbCar.RU

In 2013 the Japanese manufacturer stated a clear strategic decision to focus its efforts on developing hydrogen-based technology which it still believes is a more practical and sustainable alternative to the current combustion engine.

However, the Chinese government's relentless drive towards forcing OEMs into selling EVs or plug-in hybrids - proposing a minimum of 12% of annual sales for every manufacturer by 2020 - has forced Toyota into its strategic U-turn.

With China now the world's largest car market, Toyota has little choice but to capitulate, even though OEMs are pushing back on China's commitment. According to one Toyota executive, cited by Automotive News China: "Those mandates are tough to the point it could wreck our fundamental business case."

In fact, the regulations may mean that Toyota's globally popular Prius hybrid is still too conventional for China's policy makers and may not qualify for new-energy vehicle credits.  As a result, Toyota will be introducing plug-in hybrids into the Chinese market in 2018, but was coy about putting a date on its first full EV.

The company still hasn't abandoned its plans to develop a hydrogen-powered car, announcing plans for a long-term, China-based test of its fuel-cell Mirai.  The trial will run until 2020.

Meanwhile VW has announced that it will be adding an all-electric offering to its Chinese models in 2017.  Although details were vague, VW's boss in China, Jochem Heizmann, admitted that it was unlikely that OEM pressure would soften China's determination to set tough EV targets. As a result VW are planning an "agressive" launch schedule for its electric cars across the nation.

Tags: China, China OEM Equipment, electric vehicles, OEM Equipment, Toyota, Volkswagen

Published 6th May, 2017

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