Toyota takes cautious approach to super-cheap EVs

Yahoo

14-03-2025

BRUSSELS — Toyota is not convinced that a battery-electric minicar built in Europe and priced at €20,000 or less can be profitable.
Volkswagen, Renault, Dacia and Citroen have already announced European-made BEVs at that price. Most are in the minicar segment, where Toyota ranked second in 2024 with the Aygo X.
Toyota is holding back on launching a low-cost BEV in Europe for now. 'Given the current cost of batteries, I am suspicious that producing in Europe could be profitable at that price point,' Toyota Europe CEO Yoshihiro Nakata said in an interview in Brussels on March 6.
Toyota's rivals also have worries about the profitability of electric minicars but they are launching them anyway.
Volkswagen plans to launch the ID1 battery-electric minicar priced at €20,000 in 2027 even though executives admit that it will be tough to sell the entry-level EV at a profit.
VW Group CEO Oliver Blume said during the company's 2024 earnings call March 11 that it was important for VW to develop the ID1 despite its low margins because it will help to bring new customers to the brand.
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On the same call VW Group CFO Arno Antlitz said that achieving positive margins on the ID1 'will be difficult.'
He said the ID1 the will relieve pricing pressure on VW's larger EVs such as the ID2, which is due to launch in 2025. Antlitz said the ID2 will have a 'good profit margin.'
The two minicars now available in Europe for €20,000 or less are both imported from China. They are the Leapmotor T03 and Dacia Spring.
But European-built alternatives are coming.
A sub-€20,000 version of the Citroen C3 small hatchback, which is built in Slovakia, has been announced but is not yet available.
By early 2026, Renault will start selling a new-generation electric Twingo that will be built in Novo Mesto, Slovenia, along with a similar Dacia model the following year.
VW has said that the ID1 will be built at the company's plant in Setubal, Portugal and into production by 2027.
A Chinese rival, BYD, will start distributing this spring in Europe a restyled and renamed variant of the Seagull electric minicar it offers in China. It will cost 'well below' €20,000, BYD said. BYD, which is building new car plants in Hungary and Turkey, has not said whether the Seagull will be built in Europe.
Battery-electric cars priced at €20,000 have potential but 'convenience, affordability and usability are not quite there for these kinds of vehicles,' Toyota Europe's marketing and product development boss, Andrea Carlucci, said in an interview March 6.
Carlucci said that such a car needs to offer usable range and the ability to charge relatively quickly.
Toyota Europe Chief Corporate Officer Matthew Harrison said minicars would be the 'most troublesome segment' to electrify 'because accessibility and cost are critical to that buyer.'
He said Toyota had no plans to abandon the minicar segment but would take a wait-and-see approach to electrification.
'Let's see where the products from competitors are priced and what they look like from a payment-per-month point of view,' Harrison said.
'We don't want to give up on the A-segment [minicars]; we didn't desert it last time around when many others did, and we are not looking to desert it any time soon,' Harrison said.
In recent years Toyota's partners, Citroen and Peugeot, withdrew from a jointly owned plant in Kolin, Czech Republic, that built the Toyota Aygo, Citroen C1 and Peugeot 108 minicars, and canceled future versions of those models.
Toyota is expected to add a full-hybrid version to the Aygo X this year. Consumers in Europe should be a 'bit patient' for this powertrain, Nakata said.
The Aygo X is Toyota's only high-volume European model without any form of electrification. Last year, 77 percent of Toyota registrations in Western Europe were full hybrids, the company said.
The Aygo X is based on a shortened Yaris small-car platform and has CO2 emissions starting at 114 g/km, while the full-hybrid Yaris starts at 96 g/km, company figures show.
Minicar sales fell 22 percent in Europe last year to 543,784, according to figures from Dataforce. The Aygo X showed the biggest growth, with sales up 50 percent to 98,723. It ranked second behind the Fiat Panda (120,135) and ahead of the Hyundai i10, at 69,393 sales.
Nearly all of the segment's decline came from Fiat's decision to discontinue the ICE-based 500 in midyear, resulting in 41,783 fewer sales, as well as the withdrawal of incentives in France and higher EU tariffs on the China-built Dacia Spring EBV (a loss of 38,115 sales);and 33,458 fewer sales of the Fiat 500e, BEV according to Dataforce.
Peter Sigal contributed to this report