Toyota exec says EV enthusiasm is overblown

Toyota North America chief Jim Lentz argues Elon Musk has 'overstimulated' a false belief that EVs will "take over the world quickly."

As the Tesla Model 3 climbs to the top of the luxury sedan market and most automakers prepare to spend billions of dollars to address the competitive threat, Toyota has apparently decided its rivals are being overly optimistic in their embrace of EVs.

Speaking at a recent conference, Toyota North America chief Jim Lentz argued that Elon Musk has 'overstimulated' a belief that EVs will quickly grow to dominate the global automotive market, according to Wards Auto.

"I worry a little bit we are over-stimulated in our belief that EVs are going to take over the world quickly," he said. "There's not much growth in that industry."

The executive pointed to current sales data to make the point, claiming the combined sales of all hybrids, EVs, PHEVs and FCEVs grew to around 600,000 vehicles last year, with only seven nameplates accounting for more than 2,000 units per month.

There is no doubt that high vehicle cost has held back the growth of electric vehicles. Tesla has demonstrated that a steady decline in battery prices has changed the game, however, and many analysts predict the trend will continue until long-range electric powertrains cost less than a typical fossil-fuel alternative.

"The question is how are we going to be able to afford to get the share, because right now cost and range anxiety is still an issue for customers," Lentz added. "And gas at $1.69 a gallon isn't going to make things much easier."

Toyota has taken a few big risks in alternative powertrains, spending more than 25 years and billions of dollars building hydrogen fuel cell vehicles. The FCV commitment culminated in the Mirai, which has achieved sales of around 3,000 units annually. The technology is facing an uphill battle against battery power, as FCVs can only be refueled at a handful of specialized hydrogen stations in California while EVs can recharge at tens of thousands of stations across the country.

Despite maintaining a more tempered prediction of EV growth, Toyota has not completely dismissed the technology. The company will introduce at least 10 all-electric vehicles sometime early in the next decade.