Toyota Ramps Up Competition in Electric Vehicle Market

Toyota ramps up competition in electric vehicle market
Toyota ramps up competition in electric vehicle market

It will come as no surprise to learn that Toyota has decided to reduce lease and financing costs relating to the Toyota RAV4 electric vehicle. The company is under pressure to sell significantly more electric vehicles in California where legislation with relation to emission targets is tighter than anywhere else. Those who are looking to acquire a Toyota RAV4 will now have the option of a $299 a month three year lease or a 60 month interest-free loan. The headline price of the Toyota RAV4 is just under $50,000 which is perhaps one of the reasons why it has been a relatively slow seller to date.

One interesting side issue with regards to the Toyota RAV4 is the fact that the vehicle utilises Tesla's motor and battery technology with Toyota having taken a stake of 2.4% in the company which is now valued at $476 million. This is a perfect illustration of collaboration between two of the major automobile manufacturers in the electric vehicle market and how cooperation can lead to significant benefits for all parties.

Is Toyota under pressure?

As we touched on above, there is no doubt that Toyota is under pressure to increase sales of its Toyota Prius and the likes of the Toyota RAV4. These are vehicles which are relatively popular when looking at electric vehicles as stand-alone units but in the overall scheme of things, taking into account the automobile industry as a whole, there is still much work to be done.

Quote from ElectricForum.com : "I work for Roseville Toyota and I want to know what people think about The Fully Electric Rav4? It seems like Toyota is giving them away. I am just about to buy one myself. I am buying it for the Diamond lane sticker. Here’s my Questions?"

When you also bear in mind that Toyota's initial $50 million investment in Tesla has now increased around tenfold, it is more than likely that these two companies will work closely together for the foreseeable future. Indeed a number of other companies have shown interest in Tesla's groundbreaking technology although whether the company would be willing to share this with other competitors, who will have their own agendas, remains to be seen.

Competition is good

On the surface there seems to be incredible competition with regards to electric vehicles, in leasing, direct sales and vehicle finance, but in reality we are still talking about relatively small numbers at this moment in time. However the perception of price competition in the industry is catching the eye of motorists around the world who are now taking a serious look at electric vehicles as their next mode of transport.

It will be interesting to see when prices in the electric vehicle market reach a short-term bottom and indeed whether the momentum gathering amongst motorists continues to grow. The industry is going from strength to strength, mass-market media is now more visible than ever before and while sales are still relatively small, compared to the overall automobile market, they are beginning to pick up.

Conclusion

Toyota has in many ways been forced to increase competition in the electric vehicle market by reducing leasing and financing options on the Toyota RAV4. Like other popular electric vehicle manufacturers, Toyota is under pressure from the Californian authorities who have very strict quotas with regards to emission free vehicles. There will be sceptics suggesting that Toyota is under pressure with regards to sales of its electric vehicle range but the reality is that sales figures are increasing, popularity is growing, and the ongoing relationship with Tesla is paying dividends both financially and from a technology point of view.