Toyota Launches Rentable Electric Batteries, Strategies To Overcome EV Owners' Worries

Electric cars are now easier to operate on electric power. (photo: pixabay doc)

JAKARTA - Toyota Motor Corp. launched the first mass-produced electric car battery in Japan on Thursday, May 12 for lease only. It's a strategy the automaker says will help ease driver concerns about battery life and resale value. But this strategy has left analysts wondering.

Toyota's hybrid, gasoline-electric model remains far more popular in the home market than electric vehicles (EVs), which accounted for just 1% of passenger cars sold in Japan last year. However, the market is growing fast and foreign automakers including Tesla Inc. continue to make visible inroads on the streets of cities like Tokyo.

By incorporating insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X sport utility vehicle (SUV) for the equivalent of $39,000 for the first four years. Cancellations within the first 48 months will incur additional fees.

While EV acceptance has been slow in Japan, that is expected to change, and Toyota could risk losing market share by focusing on leasing models rather than buying.

"Anything you do that makes it harder to buy is probably not a good thing," said CLSA analyst Christopher Richter. "That's a strategy I don't really like. It means that Toyota is taking the home market a bit for granted."

Toyota said in December it would commit 8 trillion yen (Rp 907 trillion) to electrify its cars by 2030.

Toyota targets to lease 5,000 SUVs in the current financial year. The same number of EVs as analysts expected for the EVs Tesla sold in Japan last year.

The automaker plans to start selling the bZ4X in other markets later this year, and pre-orders are already starting in some European countries. Toyota has not yet decided when it will start selling the car in Japan, a spokesman said.

EVs are becoming popular in Europe through rental programs offered by entrepreneurs. "Toyota may be trying a similar tactic to popularize electric cars," said Seiji Sugiura, senior analyst at the Tokai Tokyo Research Institute.

“First-time customers are concerned about battery life and the potential for the exchange rate to drop over time,” said Shinya Kotera, president of KINTO, Toyota's rental unit.

"It's our role to eliminate anxiety about EVs," he said.

Current EV battery imports nearly tripled to a record 8,610 vehicles by 2021, according to industry data. Analysts estimate about 60% of them are Tesla. However, Japanese automakers remain cautious about switching to electric lines.

Toyota pioneered hybrid cars more than two decades ago and maintains big ambitions for hybrid and hydrogen-powered vehicles, even as it invests more in upgrading its EV battery line.

Its rival, Nissan Motor Co., also pioneered the mass EV market by launching the Leaf sedan in 2010. But they will only launch a second battery EV model, the Ariya SUV, also on Thursday. The Ariya will be sold for the equivalent of US$41,500 (Rp607 million), excluding government subsidies.

Honda Motor Co in April also set a target to launch 30 electric vehicle models globally by 2030.