Toyota Looking Into North American Suppliers For New EV Lineup

Toyota is taking a global strategy for launching its new lineup of electric vehicles, with North American suppliers becoming part of the equation.

A U.S. executive said the company has been talking to automotive suppliers for more than a year – and may build some of the product in North America. Toyota is looking into sources for EV components that include power packs, motors, and inverters.

The Japanese automaker plans to launch a new lineup of faster charging, longer range battery electric vehicles, a mission that had been diverted to hybrids and hydrogen fuel cell vehicles in recent years.

The company is expected to bring EVs to China’s growing “new energy vehicle” market in the next few years. But it goes much farther than Japan and China. Toyota is seeing stricter emissions regulations being implemented worldwide, and expects EV demand to pick up.

“If you look over the next decade, it’s highly likely we will surpass that tipping point. We look out to the future — either pure EV vehicles and/or EV-related components — we know we’re going to have to have the capability to build those here,” said Robert Young, Toyota Motor North America group vice president for purchasing, supplier engineering development and cost planning

Late last year, President Akio Toyoda announced the launch of a new business unit, EV Business Planning Department, placing himself in charge. Other executives running the new unit come from suppliers Aisin Seiki Co., Denso Corp. and Toyota Industries Corp.

Since then, the automaker has laid out plans to bring competitive EVs to market through advanced solid-state batteries. It could be faster than the 20-30 minutes of today’s DC fast charging, and equal to or greater in range than 186-250 miles, according to a July published report.

Toyota’s strategy also implies that the U.S. market will be vital for selling these EVs. That’s been the case is successful sales over the years of the Toyota Prius family, other Toyota and Lexus hybrids, and the Toyota Mirai. While Mirai sales have been small since the launch, the U.S. has been the No. 2 global market after Japan for the fuel cell car.

Young also said his company sees hybrid demand being strong, along with EVs. Toyota has placed much emphasis on its Prius Prime plug-in hybrid in the U.S. market.

Analyzing the North American supply chain has also given Toyota a look at what competitors are doing in EV technologies with their suppliers, said Shinichi Yasui, president of Toyota Motor Engineering & Manufacturing for North America.

Company executives couldn’t say which suppliers it’s considering in North America. They are global companies that can deliver a range of EV systems, Young said.

The Japanese automaker has been eyeing competitors making long-term strategic deals for components and battery packs.

Chinese investment group GSR Capital is buying Nissan’s EV battery business that includes its battery pack plant in Smyrna, Tenn.

SEE ALSO:  Toyota To Reportedly Launch Long-Range EV in 2022 With Much Better Battery Than Today’s Teslas

Other recent developments include Honda forging an alliance with Hitachi Automotive Systems to make electric motors. LG is investing in expansion of its battery plant in Michigan to supply the Chevy Bolt with batteries and components, and to work with Ford and Fiat Chrysler Automobiles.

Toyota is seeing the need to expand outside Japan for its EV development. That would go beyond the carmaker’s traditional approach to building its cars in Japan with local suppliers. This opens up its vehicle architectures for global markets like North America.

“Something needs to change in the system or we will have to work with the supplier to level-up their capability here,” Young said. “We’re looking at it on a part-by-part basis.”

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