Japanese legacy automaker Toyota, renowned for its lean manufacturing principles, found itself confronted by the success of Tesla as the electric vehicle revolution took hold.
The widespread of EVs in global markets has propelled Tesla to the forefront of the industry with its innovative strategies for efficient and profitable production, forcing Toyota to adapt to remain competitive.
In fact, Tesla’s electric SUV Model Y has ultimately beat the iconic Toyota Corolla in EV sales in Q1 2023.
Toyota’s EV adoption plan
Toyota’s Deputy Chief of Global Production, Yoshio Nakamura, acknowledged Tesla’s admirable technology in an interview with Automotive News.
At the same time, he emphasized Toyota’s motivation to work harder to bridge the gap set by the Musk-led automaker. He stated that while they learn from Tesla, they will not simply copy the approach but improve upon it through kaizen—the Japanese philosophy of continuous improvement.
“Of course, we admit Tesla has wonderful technology. But that just motivates us to work harder to catch up. If we are to learn from them, it won’t be a copy. We will improve upon them through kaizen.”
Yoshio Nakamura, Toyota’s Deputy Chief of Global Production
The Tesla shock
The rise of younger automakers has arguably reshaped the industry landscape. Tesla’s success in scaling production and achieving healthy profits with the Model 3 and Model Y are notable examples of this trend.
Interestingly, one significant factor contributing to the success of these newer automakers is their freedom from the constraints of legacy technologies and supply chains.
This trend, often referred to as the “Tesla shock,” has profoundly impacted established automakers.
According to an insider, Toyota was particularly “shocked” when the Tesla Model Y crossover outsold the iconic Toyota Corolla to become the world’s best-selling car in the first quarter.
The insider described this event as a significant blow that marked a tipping point for the industry.
While Toyota’s EV strategy is still largely unproven, the company’s recent efforts, such as the bZ4x, have already faced challenges and setbacks.
Consequently, Toyota recently outlined a revamped EV strategy. Munro & Associates CEO Sandy Munro noted that many of Toyota’s new production ideas mirror Tesla’s. Some of these include the following:
- a focus on vertical integration
- gigacastings adoption
- increased automation with robots on the factory floor
Munro praised Toyota’s alignment with Tesla’s production plan, recognizing it as the current industry benchmark.
He also suggested that Toyota should seek external perspectives to ensure a comprehensive approach to managing the company.
“The Toyota plan that I see is very similar to the Tesla production plan, and that is good because, currently, that’s the best in the marketplace. Toyota needs to also look outside for contrary points of view on how to run the company.”
Sandy Munro, Munro & Associates CEO
See Also:
- Toyota announces plans for new battery tech and EV innovation
- Toyota to establish a new US battery lab to test electric and hybrid vehicle batteries
- Tesla Model Y advances as the world’s best-selling car in Q1 2023
- Toyota to launch a manual electric sports car
- Toyota secures $850M subsidy to boost local battery output
Toyota grapples with the “Tesla shock” and endeavors to close the gap in the EV market. Nonetheless, the company’s willingness to learn from industry leaders like Tesla is poised to drive innovation and propel it toward a more competitive position in the electric vehicle space.
