- Recall that Toyota (the #1 vehicle producer in the world) has reconsidered its approach to the internal combustion engine (ICE) to electric vehicle (EV) transition and is now embracing EV. The WSJ wrote this week that its incoming “chief executive said he wanted to accelerate development of parts and manufacturing methods optimized for electric vehicles, calling for an “EV-first mind-set” in building out Toyota’s EV lineup. [And that] Toyota would develop new EVs for its luxury Lexus brand by 2026 using an EV-specialized manufacturing platform—the underlying architecture on which various models can be built.”
- As such, we know that brand Lexus is to be electrified first, followed by brand Toyota. In addition, Lexus’ line-up is to be 100% EV by 2035. It is going to be fascinating to see how this plays out in California as the state is seeing the transition the fastest with 20% of new car sales being EV in 2022 versus 5.8% on a national basis. In 2026, we expect these figures to be near 50% and 24%. As such, Toyota and Lexus will effectively be only serving half of the new car market in 2026 (better in the years going forward) which is significant for the dealerships and Toyota’s partners in the state.
- When we look at traffic to dealerships in California we see both Kia and Hyundai outperforming Toyota during 2022. Kia’s EV6 and Niro EV’s were both reviewed well and are prominent on California highways; as was Hyundai’s IONIQ 5.
