Toyota Will Highlight Changes To Its Three-Year EV Strategy To Suppliers

Toyota Motor Corp is expected to outline changes to its electric vehicle (EV) strategy to key suppliers early next year, as it seeks to close the price and performance gap with industry leaders Tesla and BYD, according to two people familiar with the project.

According to people who spoke on the condition of anonymity because the information is confidential, the leading Japanese automaker is expected to detail the EV plan changes through early 2026, communicating the adjustments to major suppliers.

Toyota has been looking into ways to improve the competitiveness of EVs planned for this decade, including hastening the adoption of performance-enhancing technologies ranging from electric drive systems – including motors – to the electronics that convert power from the grid to energy stored in batteries and more integrated heating and cooling systems, according to the people.

However, some of the EV development programs that were originally planned for the three-year period may be delayed, according to one of the sources.

The changes would be for the successors to Toyota’s first two EVs for major markets, the bZ4X and the Lexus RZ, and would be intended to close the cost and performance gap with Tesla Inc, according to the people.

Toyota is planning a large supplier gathering in February, the first such global supplier gathering since the pandemic.

Toyota stated that it is “always actively discussing and working with key (suppliers and partners) on a variety of topics” in order to achieve carbon neutrality. However, it stated that it had no new information to share about EV development projects.

According to analysts, billionaire Elon Musk’s Tesla made nearly eight times the profit per vehicle as Toyota in the third quarter, thanks in part to its ability to simplify EV production and reduce costs.

Toyota has been reviewing a $30 billion, three-stage plan for developing and releasing electric vehicles that was announced late last year, according to Reuters in October.

It has halted work on some battery-powered car projects announced last year, while a working group led by former chief competitive officer Shigeki Terashi seeks to improve cost performance and technology in the rapidly expanding EV market.

The working group has been tasked with outlining plans to improve Toyota’s EV strategy, including consideration of a potential successor to the company’s new EV platform, e-TNGA.

Toyota believes that gasoline-electric hybrids, which it pioneered with the Prius, will remain an important part of the transition to carbon-neutral transportation.

Most major automakers anticipate that EVs will account for the majority of vehicle sales by 2030, and green investors and environmental groups have pushed Toyota to move faster as industry-wide EV sales have exceeded Toyota’s previous projections.

Toyota’s EV strategy has centered on the release of vehicles such as the bZ4X, the first in a series of battery electric vehicles dubbed “beyond zero.”

The second stage of Toyota’s plan spans the next several years, during which time the company will be developing models based on the e-TNGA platform, according to some suppliers. Changes to this phase are likely to be communicated to suppliers early next year.

Terashi’s team is now debating whether to abandon the three-year-old e-TNGA architecture, which was created by modifying a gasoline car platform, in favor of a dedicated EV platform, according to people familiar with the project.

E-TNGA was designed so that EVs could be built alongside gasoline cars and hybrids on Toyota assembly lines, a compromise that limits Toyota’s ability to deliver factory-floor innovations that Toyota engineers now recognize as critical to Tesla’s strength.

According to sources, Toyota designed e-TNGA with the assumption that it would need to sell about 3.5 million EVs per year, or roughly one-third of its current global volume, by 2030, whereas the industry outlook is for a faster rate of growth.

Toyota has collaborated with Denso and Aisin on its EV reboot.

It has been investigating whether it could speed up the adoption of a new thermal management system developed jointly by Aisin and Denso, as well as a more advanced electric powertrain, or eAxle, from Aisin.

Toyota has also considered incorporating a recently developed silicone-carbide-based inverter from Denso into some large premium EVs, which would improve charging and help lower manufacturing costs.

Terashi’s role in leading Toyota’s EV strategy review after being sidelined in the company has been interpreted by some as an indication that the automaker is getting closer to a full EV pivot.

Terashi has been one of Toyota’s top vehicle planners and a strong advocate of zero-emissions vehicles, including hydrogen, over the course of his 42-year career.

He was a member of the team that paved the way for Toyota to collaborate with China’s BYD, the world’s largest EV manufacturer. As a result, Toyota will soon launch the bZ3, a China-only electric sedan powered by BYD batteries.

(Adapted from


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