Report on how Tesla's production innovations impact Toyota's electric – Tesla Maison
According to reports, Toyota in Japan recently conducted a teardown at the Tesla Model Y. The Model Y is one of the top-selling electric cars and it shocked even their veteran automaker; one executive even went so far as to describe it as an "art piece".

Tesla's ongoing innovations have played a part in this. Although it may appear unassuming from the outside, the Model Y conceals an array of advanced technology and creative manufacturing processes inside.

Reports recently quoted four sources familiar with the situation who stated that Toyota is considering remodeling its factory to create an electric vehicle platform. According to these sources, Toyota recognizes it must match Tesla's design innovation and manufacturing processes if it wants to reduce production costs and develop an electric vehicle business with high margins.

Toyota's new CEO Koji Sato could confirm the development of an electric vehicle structure during his Friday briefing, according to publication sources. It remains uncertain whether this plan has been approved; however, it could potentially be implemented after a thorough review of last year's company strategy for electric vehicles.

Toyota has come under fire for not adopting battery electric cars quickly enough. Their current production structure, the eTNGA system launched in 2019, allows EVs to be produced alongside hybrids and gasoline cars. While not inefficient, this setup doesn't offer the same cost savings as Tesla's innovations and cost optimizations did in the third quarter of 2019. With their innovations and optimizations, Tesla made almost 8x more profit per vehicle than Toyota did that quarter.

Toyota has long placed its faith in hybrids and alternative systems such as hydrogen fuel tanks. But recently, they've seen an uptick in global demand for electric vehicles due to strong sales like the Model Y cross-country. Unfortunately, Toyota's battery electric crossover, Z4X, had to undergo an early recall due to loose wheels; ultimately it was discontinued from production.

Toyota's absence of electric vehicles may already be having a detrimental effect on sales. Toyota's US business declined almost 9% over the first quarter, while General Motors experienced an 18% jump due to higher demand for EVs among fleet and commercial customers - despite selling less than 20,000 electric vehicles during that same period as Tesla did. According to S&P Global Mobility data, Honda and Toyota have seen many customers transition over to electric vehicles.

Katherine Garcia of the Sierra Club's Clean Transportation for All Campaign warned that if Toyota CEO Koji Sato doesn't prioritize electric vehicles in his future production plans, they risk "leaving cash on the table" when eclectic vehicles become more commonplace. CLSA analyst Christopher Richter agreed with this assessment and believes Toyota should prioritize EVs over hybrids in its future initiatives.

"Some statements Toyota made when Akio Tokyoda was CEO made it seem like hybrids would always be available. But this is your backup plan; your hedge. Richter stressed the importance of electric vehicles (EVs) being the priority.

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