New Toyota CEO touts a three-step plan to EV profits and productivity

From now on, Toyota enters the second phase, when it will quickly incorporate learnings and improvements from those EVs into forthcoming model introductions. That stage will last until around 2026, when Toyota will have built up enough capacity to sell some 1.5 million EVs globally.

The third phase kicks off in 2026, when Toyota introduces a completely new EV platform along with its Arene software system for cars. That will allow Toyota to leverage a new vehicle software system to unlock new revenue streams, business models and hyper-efficient product development cycles.

The new setup being developed will enable Toyota’s future EVs to double their range, thanks to more efficient battery use and require half the investment and development resources.

The improved productivity will allow Toyota to lower prices and help drive volume, Sato said.

After reaching worldwide EV volume of 1.5 million vehicles in 2025, Toyota envisions achieving sales around 3.5 million globally by 2030 when Step 3 vehicles are in full swing.

Speaking of the envisioned EV acceleration, Sato said: “We have just started.”

Three steps

Step 1 kicked off last year with the current line of bZ-branded electric vehicles that ride on the e-TNGA platform. But the launch of the lead-off vehicle, the slow-selling bZ4X crossover, was marred after Toyota had to recall the nameplate over concerns that the wheels could fall off.

Sato said Toyota was learning from its missteps and incorporating them into upcoming models under Step 2.

“We are going to make quick improvements and modifications so that the product appeal and product strength can be improved,” he said. “And we’ll do that in an accelerated manner.”

Step 3 will incorporate the Arene automotive operating system being developed by the carmaker’s renamed software subsidiary Woven by Toyota, formerly known as Woven Planet.

Sato described Toyota’s future EV, in Step 3, as being a kind of three-layered cake, with a new structural body, a middle layer of the Arene operating system and a frosting of software services.

The mechanical underpinnings traditionally thought of as a vehicle platform will be reengineered to maximize the performance of the EV drivetrain and the use of space and packaging.

The Arene operating system will be a simplified interface allowing all the car’s components to talk to each other. It will also allow for quick and easy software updates that add value.

Finally, the overlaying software applications will deliver a next-generation, software-defined vehicle experience that opens the door to new cash flows and business opportunities.

“Software will bring about something new unprecedented for vehicles,” Sato said.

The Toyota boss declined, however, to detail those potential business opportunities.