To say Toyota has been struggling with their shift to electric vehicles (EVs) would be an understatement. Their first effort at a mass-produced EV in the form of the bZ4X resulted in lengthy recall because the car’s wheels might literally fall off.
Their slow start is largely because they decided to invest in hybrid and hydrogen fuel cell technology. The Japanese automaker has also been critical of Tesla, the leading EV manufacturer, with the company’s President Akio Toyoda saying in 2020 they had not “created a real business in the real world yet.”
It looks like the leaders of the 85 year old automaker might want to pay closer attention to what Tesla is doing, because they are clearly doing something right.
According to the two company’s Q3 financial reports, Tesla recorded $3.29 billion net profit compared to Toyota’s $3.15 billion.
You might be thinking that those two figures are pretty close, but when you zoom out a little further you will see that Tesla sold 7 times fewer cars than Toyota, yet still recorded 8 times more profit per car than Toyota due to their industry-leading margins.
In the third quarter Tesla sold 344,000 vehicles, while Toyota sold 2.62 million vehicles. That equates to an average profit of $9,750 per vehicle sold by Tesla, and just $1,200 per vehicle sold for Toyota. (via Nikkei)
Tesla financial successes is not due to one factor alone. The automaker has been able to simplify production and reduce costs with its Giga Press machines and megacasts.
They are also able to reduce costs by selling directly to the consumer, taking out the expensive middle-man, dealerships.
Despite their hesitation, Toyota seems to be coming around to EVs, but it may be too little too late. Last month we reported that Toyota was looking at a major shift in their EV strategy which originally called for an investment of $60 billion by 2030 to electrify some of their cars.
Toyota Executive says 2030 50% EV goal in the US is a longshot due to low demand