Column

Starkman: Thanks GM for Steering Me to the Wonders of Toyota

December 19, 2023, 11:23 AM

The writer is a Los Angeles freelancer and former Detroit News business reporter. This column first appeared on his blog, StarkmanApproved.com

By Eric Starkman

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This might be yet another instance where I’m the last to know, but reading up on Toyota, a company I’ve long admired, I was surprised to discover how the Japan-based automaker has significantly expanded its U.S. footprint since I bought my delightful 5-speed Celica nearly 40 years ago.

Toyota has about a dozen U.S. manufacturing facilities that churn out nearly 90% of the vehicles it sells in America. I was also surprised to learn that Toyota vehicles are designed in the U.S. and that the studio where prototypes are conceived is located some 50 miles south of my west Los Angeles home in glorious Newport Beach. The studio, called CALTY Design Research, recently celebrated its 50th anniversary and is credited with having prompted other foreign automakers to move their design studios to southern California.

CALTY has been overseen for more than four decades by a native Detroiter named Kevin Hunter, who has retained his Michigan warmth and charm. If you ever wondered how Toyota vehicles are designed and about the people who create them, you’ll quite enjoy the accompanying video. CALTY also has design facilities in San Francisco and Ann Arbor, home to the University of Michigan.

I was also surprised to learn that Toyota’s chief scientist is also based in the U.S. His name is Dr. Gill Pratt, and he oversees the Toyota Research Institute, which Toyota seeded with a $1 billion investment in 2015 to develop technologies to advance energy and materials, human interactive driving, machine learning, and robotics. TRI has offices in Cambridge, MA, and Silicon Valley.

Pratt is a well credentialed brainiac, having earned his undergraduate, masters, and PhD from MIT, where he subsequently became a professor of electrical engineering and computer science. Prior to joining Toyota, Pratt led the Robotics Challenge, Robotics Research, and Neuromorphic Computing research programs for the U.S. Defense Advanced Research Projects Agency (DARPA), where he served as a program manager in the Defense Sciences and Tactical Technology Offices from January 2010 through August 2015.

Toyota until recently was badly maligned in the legacy and the trade media for its supposed resistance to electric vehicles. An EV publication even referred to Toyota as anti-environment. Critics said that Toyota was too vested in the hybrid technology it pioneered decades ago and some even predicted that Toyota’s days were numbered because of its EV myopia.

In fact, Toyota is committed to electric vehicles, but the company doesn’t believe that EVs are the sole solution to achieving net zero carbon emissions. As Pratt explains in the accompanying video, battery cell manufacturing involves carbon emissions, so it’s critical that every battery cell be used efficiently.

As an extreme example, Pratt says an EV with a 320-mile range would use eight times the battery cells required to produce one plug-in hybrid with a battery range of 40 miles. Given that the average round trip commute in the U.S. is 32 miles a day, someone driving an EV with a 320-mile range has more battery cells than they typically need. Americans who work from home and drive EVs can hardly justify the carbon emissions required to produce their batteries. A plug-in hybrid with a 40-mile range battery would more than suffice their daily needs.

EV cultists insist battery powered vehicles are the only solution to reducing carbon emissions, and those who dispute Pratt’s thesis should take it up with him, not me. What the cultists can’t dispute is that Americans aren’t embracing EVs, no doubt in part because the Biden Administration and the legacy media wants to mandate them. Unsold EVs piling up on dealers’ lots have become so severe that nearly 3,900 dealers across the country signed a public letter to President Biden asking to “tap the brakes” on his proposed emissions regulations.

What’s selling like hotcakes are hybrids, which comes as no surprise to Toyota’s management because they warned for years that Americans weren’t yet ready to embrace electric vehicles and that hybrids would better prepare them for the transition. Toyota’s redesigned plug-in Prius, which has garnered uniformly rave reviews, can go 40 miles on a single charge and is considerably more energy efficient than it’s predecessor. The issue with redesigned Prius is that Toyota can’t produce them fast enough, as there are reports of waiting lists of 12 months or more. In fact, there’s waiting lists on all the hybrids Toyota manufactures.  

Little wonder that Toyota is not only the world’s top-selling automaker, it’s also one of the most profitable. Ford CEO Jim Farley, who until recently fashioned himself in the same EV league of Elon Musk, has also become a hybrid evangelist, albeit three years after Toyota saw the light. S&P Global Mobility estimates hybrids will more than triple over the next five years, accounting for 24% of U.S. new vehicle sales in 2028. However, Jake Fisher, senior director of testing for Consumer Reports, recently cautioned in the Detroit Free Press that only Toyota, Hyundai, and Kia have developed plug-in hybrid technologies that are “very reliable.”

S&P Global Mobility predicts sales of pure electrics will claim about 37% of new car sales in 2028, and no doubt Toyota battery powered vehicles will be among them. While Ford and GM have radically slashed their EV investments and projections, Toyota is going in the other direction.

Toyota in late October today announced a new investment of nearly $8 billion at the battery plant it is constructing in North Carolina. That brought its total investment in the facility to approximately $13.9 billion, which will create more than 5,000 jobs. Check out the accompanying local news report about the scope of Toyota’s North Carolina battery site.

Toyota has also partnered with LG Energy Solution for additional batteries from a plant in Michigan, resulting in LG investing an additional $3 billion in its facility. By 2025, Toyota has committed to introducing 70 electrified models, including 15 fully electric vehicles.

Compare Toyota’s electrification efforts to that of Ford’s and GM’s.

Ford two years ago announced with great fanfare it would invest $11 billion to build an EV truck and battery plant in Tennessee and two battery plants in Kentucky. The company has since nixed plans for one of its Kentucky battery plants and there’s a questionable need for the EV truck plant given that Ford has slashed production of its electric F-150 Lightning pickup at its Detroit-area plant by 50% after expanding the facility last summer.

Ford also has scaled back plans to build an electric battery plant in rural Marshall, Michigan, in partnership with a communist China-based company. Instead of employing 2,500 workers, it will provide jobs for only 1,700 workers, some of them from China. Michigan Gov. Gretchen Whitmer earmarked millions of dollars to destroy fertile farmland and century old trees to prepare Ford’s planned battery site.

GM has delayed by at least a year production of EV versions of its most profitable trucks and put on hold plans to build special vehicles for its troubled autonomous taxi Cruise business. It also has shuttered its electric van factory in Ontario, Canada, for at least six months. GM reportedly is considering reintroducing hybrid options, for which it has a formidable technology. GM CEO Mary Barra in 2019 killed the hybrid plug-in Chevy Volt, which could go 40 miles on a single charge. I see considerably more Volts, which GM pioneered before Barra assumed command, than I do electric Chevy Bolts in Los Angeles. Volt owners I’ve spoken with rave about their vehicles.

Toyota has introduced a slew of upgraded, refreshed, and new models that are also garnering uniformly favorable reviews, particularly hybrid versions of the Grand Highlander, the Corolla Cross Hybrid, the Land Cruiser, and the all-new N400 Tacoma pickup. The design talents responsible for the new Tacoma are featured in the accompanying video.  

On the EV front, Toyota faces formidable challenges from China-based manufacturers, whose government had the prescience to foster a world-class EV industry more than 30 years. There’s a misconception that China’s big advantage is low-cost labor but in fact it’s curtailing labor all together, particularly in the management ranks.

By 2027, the New York Times reported Nio plans to replace half its managerial positions with artificial intelligence and a third of its factory workers with robots. One of Nio’s factories makes 300,000 EV motors a year with only 30 workers. It will take considerable financial firepower for Toyota to catch up to China’s EV efficiencies, but it will have the requisite funds. Bloomberg reported that Toyota plans to sell interests valued at $110 billion in various companies and use the proceeds for electrification and diversification.

HotCars feature

There are no doubt skeptics who suspect my admiration of Toyota stems from a hidden agenda or perhaps I’m being compensated for my praise. In fact, it’s driven by my positive experiences dating back to when I first began driving Toyota vehicles in the mid-80s living in Detroit and there was still a stigma driving foreign vehicles in the U.S. My horrific experience with GM’s hazardous X-11 Chevy Citation was the final straw in my dealings with U.S. automakers. I’m proud that I was an early appreciator of Toyota’s vehicles, which included two Celicas and two 4-Runners. Owning them was pure bliss.

I’ve since abandoned Toyota for Subaru, in which Toyota has a 20 percent interest, but I’m still cheering for Toyota and perhaps one day will buy the Tacoma pickup I’ve long dreamed about owning. The latest reiteration of the vehicle is awfully tempting, especially knowing it was designed almost in my backyard.

Reach the writer at eric@starkmanapproved.com. Confidentiality is assured. 


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