Akio Toyoda is such a symbol of this generation of dummies incapable of doing basic physics or even sums to see that their bet on hydrogen was doomed. Putting lawyers/MBAs at the helm where engineering decisions are vital --> same results in the U.S. (Boeing) or Japan (Toyota).
Japanese automakers are clearly being pushed into a very tough fight.
Among them, Nissan worries me the most — they’ve effectively lost China, and it’s hard to see a clear company-wide vision right now.
If they were to lose the Mexican market as well, which is arguably their last stronghold, Nissan would risk shrinking into a largely Japan-local manufacturer.
I really hope they can hang on and find a way to turn things around.
Toyota was the first proposer of EVs but it was shut down by Bush regime and mostly Japanese domestic auto suppliers. Now, it is far too late for Japan to maintain the auto industry
Toyota pushed back the development of EVs because Bush 2 administration wants more fossil fuels through developing hydrogen. At the same time, the US has some shenanigans against Japan as I assume that the US wants their next EV auto brand not Toyota. Now, we know as Tesla.
Meanwhile, Japanese auto parts and other suppliers pressured Toyota from transitioning into EVs due to the fear of going out of business.
Toyoda himself said that EV transition would put millions of Japanese out of work as well as the collapse of Japanese domestic economy catering to the auto supply chains.
Thank you for your wonderful newsletter. A small correction below:
Unlike the Chinese OEMs, Japanese vehicle assembly is highly localized (e.g. millions of Japanese vehicles are produced each year in US, India, thailand, etc) accounting for perhaps more than half of total production. Indeed this is one of their sources of competitive advantage. The number of vehicles exported from Japan is therefore not a reliable indicator of much at all. (Chinese OEM production localization is happening also but still limited compared to the Japanese. )
Therefore when comparing production levels of different countries car companies, this must be taken into account in order to avoid materially wrong conclusions and also to avoid embarrassing yourself unnecessarily.
Dear C Samwald, as the article states, these figures are based on the global production and sales of these firms, not simply their domestic production. Japan does not produce 25 million cars at home. Japan was happy to boast of being the world's largest exporter until they lost that status in 2023; then they started saying it didn't matter. I hope I only embarrass myself necessarily.
Thanks for the quick response. Your overall thesis is basically valid. As I said, it’s a minor correction. I am more picking on the statement below which (as explained above) is not really so valid as a comparison “Exports rose to 7 million, of which 37% were EVs. Japan’s exports languished at 4 million, with very few EVs.”
I see. I'm glad you liked the overall piece. It was getting too long to explain, but the reason for mentioning this is because, with domestic sale dwindling, keeping up exports is important for domestic production levels and jobs. That's hard to do when you're not competing with China in the growing segment of the market.
Fully agree with you that a certain level of domestic production is important for preserving manufacturing know-how in close proximity to R&D but the minimum level for that is not well understood and it detracts from the other great points you raise.
Suzuki’s success in India is a good illustration of the limited relevance of production in Japan. Suzuki dominates the India market with local production in India that is so competitive that India is now an export hub for Suzuki, including exports of EV’s to Japan.
Japan is not even close to being a lead market for EV’s, so I would not be surprised to see Japanese brands exporting more and more EV’s from lead markets such as China and even India to Japan, Europe and the global south
From the standpoint of companies, I agree with you. For those concerned about jobs, support for broader community where automotive producers are located, and maintenance of the production base of suppliers, it's a different story. Toyota has said it needs to produce at least 3 million vehicles per year to sustain its supplier base. The government acquiesced to Trump's tariffs in larger part to get a reduction in auto tariffs in ways that may hurt the rest of the economy more than it helps autos. But, I agree that the global sales number is the more important comparison in considering the relative strength of the two countries' industries.
Yes, this is a very, very costly replay of the Innovators Dilemma, playing out slowly but surely.
Lest we forget, Korean carmakers don’t seem to have the same hesitancy. Kia and Hyundai went with modular designs to allow multiple powertrains. That is inherently a design compromise, of course. But you can lease a nice Kia EV in the States (even in NorCal) for like 300/month.
Btw, I traded my Model 3 for a Mach E lease from Ford.
I think Hyundai-Kia is now the third largest car group in the world. I'm now looking for the portion of BEVs, PHEVs, hybrids in the sales over recent years.
Akio Toyoda is such a symbol of this generation of dummies incapable of doing basic physics or even sums to see that their bet on hydrogen was doomed. Putting lawyers/MBAs at the helm where engineering decisions are vital --> same results in the U.S. (Boeing) or Japan (Toyota).
Japanese automakers are clearly being pushed into a very tough fight.
Among them, Nissan worries me the most — they’ve effectively lost China, and it’s hard to see a clear company-wide vision right now.
If they were to lose the Mexican market as well, which is arguably their last stronghold, Nissan would risk shrinking into a largely Japan-local manufacturer.
I really hope they can hang on and find a way to turn things around.
Toyota was the first proposer of EVs but it was shut down by Bush regime and mostly Japanese domestic auto suppliers. Now, it is far too late for Japan to maintain the auto industry
Tell more about this issue, and which Bush?
Back in the day, Toyota introduced the very first EV for commercialization. Bush 2 administration was on track of promoting hydrogen at the time.
https://www.facebook.com/toyota.malta/videos/back-in-1997-toyota-kickstarted-the-electrification-revolution-with-the-worlds-f/1345404843829691/
https://www.youtube.com/watch?v=ZbMZ02_5CtE
Toyota pushed back the development of EVs because Bush 2 administration wants more fossil fuels through developing hydrogen. At the same time, the US has some shenanigans against Japan as I assume that the US wants their next EV auto brand not Toyota. Now, we know as Tesla.
https://www.topspeed.com/toyota-first-ev-history/
Meanwhile, Japanese auto parts and other suppliers pressured Toyota from transitioning into EVs due to the fear of going out of business.
Toyoda himself said that EV transition would put millions of Japanese out of work as well as the collapse of Japanese domestic economy catering to the auto supply chains.
Thanks. I'll check it out.
Thank you for your wonderful newsletter. A small correction below:
Unlike the Chinese OEMs, Japanese vehicle assembly is highly localized (e.g. millions of Japanese vehicles are produced each year in US, India, thailand, etc) accounting for perhaps more than half of total production. Indeed this is one of their sources of competitive advantage. The number of vehicles exported from Japan is therefore not a reliable indicator of much at all. (Chinese OEM production localization is happening also but still limited compared to the Japanese. )
Therefore when comparing production levels of different countries car companies, this must be taken into account in order to avoid materially wrong conclusions and also to avoid embarrassing yourself unnecessarily.
Dear C Samwald, as the article states, these figures are based on the global production and sales of these firms, not simply their domestic production. Japan does not produce 25 million cars at home. Japan was happy to boast of being the world's largest exporter until they lost that status in 2023; then they started saying it didn't matter. I hope I only embarrass myself necessarily.
Thanks for the quick response. Your overall thesis is basically valid. As I said, it’s a minor correction. I am more picking on the statement below which (as explained above) is not really so valid as a comparison “Exports rose to 7 million, of which 37% were EVs. Japan’s exports languished at 4 million, with very few EVs.”
I see. I'm glad you liked the overall piece. It was getting too long to explain, but the reason for mentioning this is because, with domestic sale dwindling, keeping up exports is important for domestic production levels and jobs. That's hard to do when you're not competing with China in the growing segment of the market.
Fully agree with you that a certain level of domestic production is important for preserving manufacturing know-how in close proximity to R&D but the minimum level for that is not well understood and it detracts from the other great points you raise.
Suzuki’s success in India is a good illustration of the limited relevance of production in Japan. Suzuki dominates the India market with local production in India that is so competitive that India is now an export hub for Suzuki, including exports of EV’s to Japan.
Japan is not even close to being a lead market for EV’s, so I would not be surprised to see Japanese brands exporting more and more EV’s from lead markets such as China and even India to Japan, Europe and the global south
From the standpoint of companies, I agree with you. For those concerned about jobs, support for broader community where automotive producers are located, and maintenance of the production base of suppliers, it's a different story. Toyota has said it needs to produce at least 3 million vehicles per year to sustain its supplier base. The government acquiesced to Trump's tariffs in larger part to get a reduction in auto tariffs in ways that may hurt the rest of the economy more than it helps autos. But, I agree that the global sales number is the more important comparison in considering the relative strength of the two countries' industries.
Thanks.
Yes, this is a very, very costly replay of the Innovators Dilemma, playing out slowly but surely.
Lest we forget, Korean carmakers don’t seem to have the same hesitancy. Kia and Hyundai went with modular designs to allow multiple powertrains. That is inherently a design compromise, of course. But you can lease a nice Kia EV in the States (even in NorCal) for like 300/month.
Btw, I traded my Model 3 for a Mach E lease from Ford.
Innovator's Dilemma to be sure
I think Hyundai-Kia is now the third largest car group in the world. I'm now looking for the portion of BEVs, PHEVs, hybrids in the sales over recent years.
Thank you - please do share that in a subsequent post.
I know people who work at spendy US EV companies who will cite Kia as the affordable EV option
I did rent (via Turo) a Toyota EV the (bZ4X - terrible name tbh) other day, in part to sample the product
and where does this put the German automakers caught between Chinese and Japanese auto makers and yes and the Euro/yen at 35 year highs of 183+
In a LinkedIn dialogue, someone suggrested VW is trying to produce EVs for the middle class. We'll see