Toyota Gains Ground in China with Affordable bZ3X EV
Shanghai – Toyota is making inroads in the fiercely competitive Chinese electric vehicle (EV) market with its new bZ3X, priced around $15,000, adn a broader strategy focused on localized production and a growing EV lineup. The automaker’s China sales rose 6% between January and August, bucking a trend of decline seen by other Japanese carmakers.
Toyota debuted the bZ3X, emphasizing its spacious interior designed as a ”cozy Home,” and plans to expand its China offerings with the bZ5, bZ7, and a revamped Lexus line available in both EV and hybrid versions. This expansion is supported by plans for a wholly owned factory near Shanghai, slated to begin production in 2027 with an initial annual output of 100,000 battery-powered EVs for the Lexus brand – making Toyota only the second foreign passenger carmaker after Tesla to fully own a manufacturing facility in China.
Despite increasing sales, Toyota faces profitability challenges. Average profit per car dropped to ¥162,000 ($1,090) in fiscal 2024,down from ¥274,000 in fiscal 2021,with total China profits falling from ¥525 billion to ¥290 billion over the same period,according to Pelham Smithers.
Early adopters of the bZ3X have reported minor issues, with one customer, Yu, noting dozens of trivial problems and some design elements falling short of Toyota’s gasoline models, though he indicated he would still repurchase the vehicle. The company is also navigating shifting consumer preferences, as growth in hybrid vehicle sales has slowed – up 17% in the first eight months of 2024 compared to 76% growth in the same period last year – as fully electric cars regain popularity due to advancements in battery technology and charging infrastructure.
Toyota’s performance stands in contrast to its Japanese competitors. Nissan Motor Co. experienced a 9% sales decline,while Honda Motor co. saw a 21% drop in china during the same January-August period. Bloomberg Intelligence senior auto analyst Tatsuo Yoshida observes a growing divide, stating, “toyota on one side, everyone else on the other.”
