Toyota rolled out its first mass-produced battery electric car in Japan on Thursday for lease only, a strategy the car maker says will help ease driver concerns about battery life and resale value but has raised analysts’ eyebrows.
Petrol-electric hybrid models remain far more popular in Toyota’s home market than electric vehicles, which accounted for just 1% of the passenger cars sold in Japan last year, according to industry data. Still, the market is growing fast and foreign car makers including Tesla are making visible inroads on the streets of cities such as Tokyo.
Bundling insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X SUVs at the equivalent of US$39 000 (R632 000) for the first four years. Cancelling in the first 48 months will mean an additional fee.
While EV acceptance has been slow in Japan, that will change, and Toyota could risk losing market share by focusing on a model of leasing rather than purchasing, said CLSA analyst Christopher Richter.
“Anything you are doing that’s making it harder to buy is maybe not a good thing,” he said. “It’s a strategy I am not that fond of. It does signal that Toyota is taking the home market a little bit for granted.”
Toyota said in December it would commit ¥8-trillion (R1-trillion) to electrify its cars by 2030.
Toyota aims to lease 5 000 of the SUVs in the current financial year — around the same amount of EVs that analysts estimate Tesla sold in Japan last year.
The car maker plans to start selling the bZ4X in other markets later this year, and pre-orders have already started in some European countries. Toyota has not decided when it will start selling the cars in Japan, a spokesperson said.
EVs became popular in Europe through lease programmes offered by employers and Toyota may be trying a similar tack to popularise electric cars, said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute.
First-time customers are concerned about battery life and the potential fall in the trade-in value over time, said Shinya Kotera, president of Kinto, the Toyota unit offering the leases. “It’s our role to dispel anxiety” towards EVs, he said.
Imports of battery EVs jumped almost three times to a record 8 610 vehicles in 2021, according to industry data. Analysts estimate roughly 60% of those were Teslas. Still, Japanese car makers remain cautious about switching into the all-electric lane.
Toyota pioneered the hybrid more than two decades ago and retains big ambitions for both hybrids and hydrogen-powered vehicles, even as it is investing more to boost its battery EV line-up.