Toyota to Re-Enter Electric Vehicles From 2020 in China, India

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Toyota Motor Corp. will introduce electric vehicles in China and India from 2020 as it accelerates a push into battery-powered autos amid rapidly tightening environmental regulations.

Japan’s biggest automaker will design its own EV for the Chinese market, and is also considering selling EVs developed by its local partners under its marque, the company’s head of China operations, Hiroji Onishi, said at a briefing at the Guangzhou auto show on Friday. Toyota signed an agreement with Suzuki Motor Corp. the same day for it to receive EVs from its smaller peer for the Indian market, according to a press release. Suzuki doesn’t currently sell an EV.

Selling electric vehicles will mark the return of Toyota into the battery-powered market after halting production of the RAV4 EV in 2014. Toyota President Akio Toyoda said in September the company is a “little bit late” in pursuing EVs, even as rival automakers rush into the segment. China plans to introduce a cap-and-trade policy linked to zero- and low-emission vehicles from 2019. India is targeting selling only electric cars by 2030.

“To respond comprehensively to the expanding demand for EVs in China, we are considering having our joint-venture partners provide us with EVs,” Onishi said. “We will also continue to develop every aspect of what China defines as new-energy vehicles, including plug-in hybrids and fuel-cell vehicles.”

To qualify for points under the Chinese proposal, vehicles need to be made locally. A Toyota spokeswoman declined to comment on where the EV and its parts will be produced.

The Toyota City, Japan-based carmaker said it will expand a feasibility study for selling its fuel-cell-powered Mirai sedan in China to include commercial vehicles like buses. The company will also introduce a pair of compact crossovers, the C-HR and IZOA, from the middle of next year, a key segment of the world’s biggest auto market where Toyota currently offers no models.

The agreement with Suzuki has Toyota providing technical support while Suzuki produces the vehicles and supplies some to its bigger peer in India. The pair will also conduct a study of activities aimed at popularizing EVs in the country, which is set to become the world’s third-biggest car market by 2020.

China Rush

China in particular has driven an EV rush. Daimler AG said at the Guangzhou motor show Friday that it will produce its first electric car in the country in 2019. Volkswagen AG said Thursday at the event it will invest more than 10 billion euros ($12 billion) with its Chinese partners to develop a range of new-energy vehicles.

Last week, Ford said it will invest 5 billion yuan ($754 million) with a Chinese partner, while Honda Motor Co. announced in September it would launch a China-specific EV in 2018.

The addition of a compact crossover should give Toyota a boost in China, where it trails Japanese peers Nissan Motor Co. and Honda even as sales at all three got help this year from troubles at Korean rival Hyundai Motor Co. Honda is challenging the leadership Nissan has held since 2009, partly on the success of the XR-V and Vezel small sport utility vehicles.

Like other foreign automakers in China, Toyota provides slightly different versions of the same vehicle to its local joint-venture partners to ensure they are equally supplied with the most popular models. The C-HR will be available with partner Guangzhou Automobile Group Co., while the IZOA will be offered with China FAW Group. Toyota introduced the C-HR in Japan and Europe in late 2016, and in the U.S. from April.

Toyota’s China sales in the first 10 months of this year totaled 1.07 million vehicles, compared with Honda’s 1.16 million and Nissan’s 1.17 million. Nissan on Friday said it’s raising its full-year China sales target to 1.5 million vehicles.