Last Sunday was Reformation Sunday, the day when my Lutheran side of the family celebrates the Protestant Reformation and the Catholic side of my family quietly grumbles, which is maybe why I feel so compelled to preach to the choir today. I don’t have 95 theses this morning, though, I just have two: Hybrids are good and Toyota is right to pursue a strategy that increases hybrids while not ignoring EVs.
Today’s Dump will be (almost) all about Toyota because there’s just a crap ton of Toyota news to talk about. From news about wage increases to profitability to EV investments, we’re super into it.
Oh, yeah, I guess we’ll also talk about Tesla’s successful lawsuit and about a CEO eviction because that’s in the news today.
Also, side note: Martin Luther would have loved that we call our morning news roundup The Morning Dump because Martin Luther loved poop jokes. Seriously.
Toyota’s Hybrids Are Now As Profitable As Its Gas-Powered Cars
Toyota put out a bunch of financial reports for the third quarter (their second quarter because they run on a different fiscal calendar), and you can see most of it here. There’s a lot of information, and most of it is good.
From a financial standpoint, it looks like the fiscal year ending in March 2024 will likely be the best ever if nothing wild happens in the next fiscal half-year. In just the last quarter, the company’s net income was up to a whopping $8.6 billion, compared to about $2.9 billion for fiscal Q2 (calendar Q3) last year. Revenue also rose almost 25% to $76.6 billion.
Buried in all of that information, though, is a key piece of information, summarized nicely by Automotive News:
Profit parity for hybrids is a big, big, big deal. Toyota’s hybrids command a small premium over non-hybrids (a base Corolla costs $21,900 while a base Corolla Hybrid starts at $23,300), and that’s apparently enough to cover the additional costs. In the example of the Corolla, the vehicle’s city MPG jumps from 32 mpg to 53 mpg, a not insignificant amount.
While there are some obvious advantages to a society that has more EVs than gas-powered vehicles, the market has simply not been able to provide the affordable EVs that people want in much of the world. For reasons both political and practical, the charging infrastructure and the incentives to buy vehicles that are at a low enough cost haven’t yet materialized. Society will get there, eventually, but the crash EV program that the U.S. is doing right now hasn’t worked yet.
Hybrids are a great interim step, and Toyota has the best hybrid lineup in the business, having gotten a huge start with Prius.
Toyota Hasn’t Totally Given Up On EVs, Doubles Investment In NC Plant
Akio Toyoda is still the Chairman of Toyota, though he’s no longer the CEO. What he says matters and for what feels like the last 900 years, the departed (from The Autopian) Patrick George has been working a giant piece on Toyoda for Road & Track and he finally published the damn thing, which you can read here, and includes this great section on Toyoda’s seeming resistance to electrification:
Questioned about this, he insisted he’s not against EVs but has doubts they can be the only solution to cars’ contributions to climate change. “What we are really fighting against is carbon,” he said at Le Mans. “But if I’m asked, will that be the only option, or only solution to global warming, then I have some questions.”
For one, he said, Toyota operates everywhere in the world; “There are about 1 billion people among our customer base who do not have enough electricity infrastructure in their everyday lives,” he said. “If we say that [EVs] are the only options that we should pursue, what will happen to these people?”
Toyota downgraded its guidance for FY 2023, saying it’ll only sell about 123,000 EVs, way short of its initial goal of 202,000 EVs. So is the EV dream dead? Not quite.
The AP has a story out today from North Carolina about Toyota’s plan to double its investment in its massive battery plant outside of Greensboro.
The Japanese automotive manufacturer projects the new investment will create about 3,000 additional jobs, bringing the total to more than 5,000 jobs, when its first U.S. automotive battery plant begins operations near Greensboro in 2025. The plant will serve as Toyota’s epicenter of lithium-ion battery production in North America and will be a key supplier for the Kentucky-based plant tasked with building its first U.S.-made electric vehicles, the company said.
Toyota’s fourth and largest investment in the North Carolina facility brings its total investment to about $13.9 billion to help meet its goal of selling 1.5 million to 1.8 million electric or hybrid vehicles in the U.S. by 2030. It will also add eight new production lines for electric and plug-in hybrid batteries.
While it’ll make batteries for hybrids, the plan is also to support the sale of EVs in the United States by being able to take advantage of tax credits. Toyata’s hybrid advantage is great, but this doesn’t mean the company can skate forever without competitive EVs (the Bees Forks ain’t it), especially for Lexus, which is losing massive market share to Tesla.
Toyota Reportedly Raises Salaries For Employees In North America
Huh, what a strange coincidence. Just days after the United Auto Workers reached a tentative deal with the Detroit Three automakers that will see huge pay increases and a massive reduction in the time it takes to reach the top pay level, Toyota is reportedly doing the same thing.
Fain said the other reason for the longer contract was that the UAW is planning a push to organize the many nonunion automakers: Tesla, Toyota, Volkswagen, Mercedes, BMW, Honda, Nissan, and others. “When we return to the bargaining table in 2028, it won’t just be with the Big 3, but with the Big 5 or Big 6,” he said.
Labor Notes received a message from a Toyota worker in Alabama the next day, saying management had called an emergency meeting. Toyota—clearly running scared—was raising top pay to $32, he said, and shortening the time to get there from eight years to four. Another worker at a Toyota plant in Kentucky said the company was boosting wages and slashing the progression to top rate in half there, too. The new top rate will increase to $2.94 to $34.80 for production workers and $3.70 to $43.20 for skilled trades.
If this is happening it’s just a super strange coincidence.
Tesla Wins Lawsuit Over Autopliot Crash
In what could be a good sign for Tesla’s many legal issues regarding its Autopliot system, a jury yet again determined that Tesla wasn’t liable for a crash in California:
The outcome in civil court shows Tesla’s arguments are gaining traction: when something goes wrong on the road, the ultimate responsibility rests with drivers.
The 12-member jury announced they found the vehicle did not have a manufacturing defect. The verdict came on the fourth day of deliberations, and the vote was 9-3.
So, just remember that the next time you try to use an assisted driving system. If something goes wrong, it’s your fault.
Ex-Nissan CEO Carlos Ghosn Is Apparently Getting Kicked Out Of His House
Lebanon might not allow its citizens to be extradited, but a court in the country just decided that former Nissan-Renault Chairman/CEO Carlos Ghosn can’t just keep living in the house Nissan purchased for him.
A Lebanese judge has decided to evict former Nissan boss Carlos Ghosn from his luxury home, a judicial official has said, four years after an investment firm accused him of “trespassing.”
Ghosn, who took up residence in the Beirut property after fleeing prosecution in Japan in 2019, appealed the ruling on Friday, the official added. A spokesperson for Ghosn confirmed he had appealed.
Ghosn and his wife must “vacate the property … within a month,” according to a copy of the decision dated Oct. 16.
Ghosn’s legal team says they have new documents that weren’t available at the trial that will show the house is actually his. It’s a bummer for Ghosn, but we’re sure he could downgrade from the $19 million mansion as we know he’s used to cramped quarters.
The Big Question
Do you think the new Prius is sexy? Also, bonus question: Do you get the topshot joke?