A tale of two Toyotas: Battery first but not as the only solution

The Toyota booth -- the largest at the reborn auto show here in Tokyo -- delivers a clear message: We are (finally) going electric. At center stage are two concepts showcasing what to expect from the forthcoming full-electric Supra coupe and the successor to the bZ4X electric crossover. Just to the left of those models are two metallic silver concepts previewing battery-powered versions of the Land Cruiser SUV and Hilux pickup.

This all aligns with the pro-BEV (battery-electric vehicle) comments Koji Sato made in February after being tapped to succeed Akio Toyoda, the grandson of the company's founder, as Toyota CEO. At that time Sato said:  "To deliver attractive BEVs to more customers, we must streamline the structure of the car, and -- with a BEV-first mindset -- we must drastically change the way we do business, from manufacturing to sales and service."

Fast forward back to this week to a joint interview with Sato at the show. We entered the room with the expectation was that he would use this moment to double down on his "BEV-first mindset," on the contrary he put that clear message in a broader context.

Sato used the interview to clarify his previous comments, referring to BEVs as the "missing piece" in Toyota's "multi-pathway approach" to lowering emissions. He said that while he previously "emphasized the importance of a battery-first way of thinking. That doesn't mean Toyota will only do battery EVs from now on."

The future will also include hydrogen as well as future developments of gasoline engines and of hybrid technology.

Sato's clarified message confirms alignement with his boss, Toyoda, who said in May: "When we look worldwide, there are about 1 billion people who will be among our customer base who do not have enough charging infrastructure in place."

Despite the infrastructure challenge, Toyota is determined to become much better at building and selling BEVs. It sold just 25,000 of them worldwide last year compared with Tesla's 1.3 million. Toyota's target is to sell 3.5 million BEVs by 2030, with 1.7 million of them based on a new electric-only architecture, which internally is referred as Step 3.

At Step 3, Toyota's BEVs will switch to a new architecture and a new manufacturing system at the same time (while also employing megacasting to create large portions of the body).

Making multiple big changes at once is unusual for Toyota, which has historically started its new manufacturing plants by building an existing model and only applied a new technology to a factory with a long track record of excellence.

Sato acknowledges that this is a big challenge but believes Toyota will avoid the "production hell" that Elon Musk and Tesla experienced when getting the Model 3 to market.

He is confident because the new platform consists of three layers -- underbody, software and applications -- that work together, and are being developed simultaneously. He also refuses to rush the process. While the current plan is to launch the new system with a Lexus model in 2026, the time frame is flexible.

"We won't launch something that is imperfect" because of pressure to meet a deadline, Sato said, adding that he expects the lessons Toyota learns will ultimately boost the company's overall production efficiency for all cars regardless of their powertrains.

We will see in three years -- or possibly longer -- whether Toyota's BEVs can match or exceed the forthcoming models from competitors such as Tesla and BYD, which obviously won't be standing still for the next 36 months.

One thing is certain: Every automaker will struggle to master the transition, especially since the move to software defined vehicles is accelerating the speed of change within the industry to a level that was previously unfathomable.