Toyota is the world's largest automaker. Tesla is the largest EV producer. What do they have in common? Strategy. Check out why I believe Toyota will partner with Tesla.
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Tesla is has brought the most controversy into the world of transportation since Henry Ford and the model T. With the demand for electric cars increasing, it is no wonder more manufacturers are bringing out their versions.
One topic that is particularly hot in the industry right now is Tesla and Toyota. Back in 2012, the two companies had a joint venture on a Rav4 EV that flopped miserably. Since that time, the two have been quiet about working with each other, until recently.
The noise of Toyota and Telsa doing more work together is not news to me. It makes perfect sense. Here is my opinion on why these two car companies are going to work together.
Reason One: Tesla Has The Charging Network
If I were a car company transitioning into the EV segment, what would be one of the largest hurdles to overcome? The charging network.
Toyota is brilliant, and to partner with Tesla would be even more brilliant. If Toyota uses the charging network that Tesla already has available more people will want to buy their cars.
It is almost comical to me that all of these other car companies are not adopting Tesla charging tech. If a company knows how costly infrastructure is, it is Toyota; just ask Mirai owners about that.
This reason is not the only one that makes sense for these two to join forces, though.
Reason Two: Terafactories - Building Batteries For The Masses
Tesla motors have pushed to build a plethora of Gigafactories globally, and they are succeeding. That success is what has turned Toyota on to wanting a joint venture.
Building out factories that can turn out Gigawatts of battery energy means that the demand for EVs is strong. Not only that, but Elon Musk envisions a future where these factories produce Terawatts of energy.
Akio Toyoda understands this idea and realizes that if Tesla can scale like that, there will be enough room to produce batteries for Toyota vehicles.
Elon Musk is a man who has a massive vision. Tera factories will be the next move Tesla will make, and any other car company that wants to take that ride will do well. The battery buildings are also a big bonus to Toyota. Not having to build more plants keeps them profitable.
Reason 3: Toyota Has Strategic Business Plans
What I mean by this reason is if Toyota and Tesla team up, the research and development that will come out of this venture are insane.
Toyota has stated they are working on a solid-state battery right now. They promise to have a more energy-dense, faster-charging battery that costs less to consumers. This means several things.
One: More energy means more range. More range means less worry about 'range anxiety and more time enjoying the car.
Two: Faster charging means 10 minutes (which is roughly the average time people spend to fill up their gasoline or diesel counterparts), and you are ready to go. No more 30 to 60 minutes with limited range. It is game on at that point, and this will make gasoline look obsolete.
Three: Cost to the consumer. As the battery tech improves, whether it be solid-state or lithium-ion (both are lithium batteries), the manufacturing cost will drop significantly.
The drop in price means more people will be able to afford and adopt EV technology. No longer will luxury only be available for the super-rich. A Plaid + model S could drop tens of thousands in price.
Toyota knows all of these things, and partnering with a company with most of what they need makes sense. No need to re-invent the wheel, but it can be perfected.
Conclusion
Toyota and Tesla are not enemies; they are friends. Sometimes friends have disagreements, and they do not talk to each other for a while. I fully believe that is what happened with these two companies, and now they are making amends.
Tesla would greatly benefit from the Kaizen processes that Toyota can offer and help them boost their product quality. Toyota will benefit from all the infrastructure and factories Tesla can offer.
The venture (should it happen) will be one that will rewrite the books on the automotive industry.
That is all for today. Enjoy Taco Tuesday, and I will see you in the following article. Want to know at what point your head gasket could fail on your Toyota Prius? Check here.
Check out this wild new battery tech that Tesla has and why it will forever change the auto industry.
Peter Neilson is an automotive consultant specializing in electric cars and hybrid battery technologies. He holds a Bachelor of Science in Automotive Service Technology from Weber State University. Peter can be reached on Linkedin and you can tweet him at The_hybrid_guy on Twitter. Find his page on Facebook at Certified Auto Consulting. Read more of Peter's stories at Toyota news coverage on Torque News. Search Toyota Prius Torque News for more in depth Prius coverage from our reporters.
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The RAV4 EV was NOT a flop!
The RAV4 EV was NOT a flop! Tesla used the collaboration with Toyota to help design their own future Model X EV. And Toyota never really planned on the RAV4 EV to be a big sales hit from the beginning. It was basically a test bed car, which is how many legacy automakers have always stuck their toe in the water of new technologies, so that they could have a cool prototype vehicle, featuring new technology, and get a lot of press, but not face the problem of ever competing against their bread and butter gas powered vehicles which made up 100% of their profit basis. Tesla was probably eager to work with one of the largest, most experienced automakers in the world, and seeing that the EV model was fully based on the regular RAV 4, it probably cost Toyota less to build these few RAV 4 EVs than paying for a Superbowl ad. But it was soon clear that while Toyota was simply playing around with the idea of BEVs, they were not ever seriously thinking of large scale production. Whereas Tesla was seriously focused on building an all-EV automotive line up of vehicles that would actively compete with ICE vehicles worldwide, and actually be superior in many ways. I think that was the point where Tesla and Toyota went their separate ways. And Toyota went on to design and build their RAV4 Prime plug in hybrid, where Tesla moved forward to building their Model Y. Many automakers looked down their nose at Tesla for years, without any concern about competition from Tesla until they actually succeeded with the Model 3 and later the Model Y. And since then the legacy automakers have had to answer the probing questions of their stockholders as to why they are not able to show the stock growth and greater EV innovation of Tesla. And it now looks like this road has come full circle, where the giant, worldwide automaker Toyota is looking to collaborate with Tesla again. I hope that the future alliance helps both companies with real EV engineering advances (and hopefully some cool new EVs) that combines the best abilities of these Two very different automakers.