Toyota’s Drivetrain Boss Says Tesla Motors’ Business Plan Seems Doubtful

4 years ago by Eric Loveday 33

Toyota's Advanced Tech Vehicles

Toyota’s Advanced Tech Vehicles

Toyota’s top execs don’t often address the media, but when they do, the anti-EV words almost always seem to flow.

Tesla's Advanced Tech Vehicle

Tesla’s Advanced Tech Vehicle

Take, for example, the words of Koei Saga, senior managing officer in charge of Toyota’s drivetrain research and development.

Saga recently spoke with Automotive News at length.  The general topic was future powertrains from Toyota.

As Automotive News explains:

“Saga is not a big proponent of electric vehicles. He said Toyota — or any large-scale automaker for that matter — would not have developed the RAV4 EV if it weren’t forced to comply with California Air Resources Board regulations.”

Those weren’t Saga’s words, but these are.  Saga stated that Tesla’s business plan seems doubtful “when sales are based on targeting rich users for whom this is their third or fourth car.”

An odd statement?  We think so.  Is Saga implying that all Model S owners have two to three other vehicles?

Toyota is clearly against electric vehicles, perhaps more so than any other automaker, but we see no need for Toyota to constantly shoot down others who are successful in the electric vehicle space.

Source: Automotive News

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33 responses to "Toyota’s Drivetrain Boss Says Tesla Motors’ Business Plan Seems Doubtful"

  1. Rob says:

    Well… you miss the point. Saga thinks the way every other big car manufacturer thinks and that’s why he is wrong. Ask the CEO of Bugatti, Lotus or Ferrari what they think about selling cars to owners that have many cars. But, ironically, he is also right. While Tesla’s business model makes sense for production of a good niche product, it is a recipe for bust if Tesla tries to move to mass production. Do not be fooled by all the media hoopla about Tesla stock. Two thirds of that is ‘manufactured’ by stock dealers playing long on the stock and Tesla improving its position for IPO. It will all change in a heartbeat when the stock is shorted.

    1. Marshal G says:

      People have been shorting the stock all along, and have been getting crushed. Perhaps you haven’t heard about Tesla’s planned $35k 200 mile car coming in about 3 years? High stock valuations aren’t due to present sales volume, they are in anticipation of that car. I can tell you a lot of people are looking forward to that one, myself included.

      1. Rob says:

        Maybe you are looking too much forward to that car and that is why you are blinded. That car does not fit Tesla’s business model – in exactly the same way a $85k Ferrari would be a financial disaster. There are many examples of companies venturing into manufacturing products not supported by their business models (think RIM, now Blackberry). And you are wrong about ‘people’ shorting the stock. Big boys have not done it… yet.

        1. Brian says:

          I’m not sure you understand Tesla’s business model in terms of the big picture.

          http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

          1. Robert says:

            Brian +1

            1. James says:

              Brian +1

              1. James says:

                It always puzzles me when and how some people like to equate the automobile industry, or any heavy industry with the electronics/tech industry. I’ve used the VHS/Beta example, and the Apple Way examples many times, but never in DIRECT COMPARISON to cars or any industry like autodom, wherein products take 5+ years to research and develop and require investments sometimes in the billions to get up to production. The sheer manpower and levels of engineering highly overshadow the efforts of say, a Sony, Dell or Apple to come to market with a new version or even a new type of electronic device.

                When Rob starts talking Blackberry and RIM when discussing the future of Tesla’s stock – It indicates to me he is not a car guy and doesn’t understand the huge differences between business models of such diverse industries.

            2. Ocean Railroader says:

              The Nissan Leaf with a 130 to 150 mile range that seems more likely then a 200 mile range generation Tesla in that we have already seen a sign there is one of them in existence.

              In my opinion Tesla is still very vulnerable in till they show that this talked about car is real.

              1. James says:

                In terms of human patience – it seems battery technology is creeping along at snail’s pace. In terms of scientific reality, battery power density and efficiency is moving ahead by leaps and bounds.

                The 200 Mile BlueStar or Model E Tesla is right on course. If one uses the history of the automobile as a compass to future development, this means your 150-200 mile Nissan LEAF is not that far away.

                Patience is a virtue.

                1. Ocean Railroader says:

                  Today was the first day in my life that I saw a Black Tesla Model electric car for real in the wild. It was parked in a parking space next to me in a public parking lot. It is also the first 100% True EV that was not a plug in hybrid that was driving under it’s own power and it was also owned by a citizen and not a government or car dealership.

                  In real life the model S is about almost as large as a Impala and it defiantly looks very roomy inside and something I would want to drive. It makes the Nissan Leaf look like a shoe box on wheels in that it is far bigger then it from the looks of it.

                2. James says:

                  And it doesn’t look like a catfish.

              2. Ocean,

                If you’ve been following along, you’d know that:

                1) Tesla is on track to spend about $100 million for a nationwide “Supercharger” that can charge all their future cars, plus cars from other manufacturers who pay the royalties

                2) Tesla is priming the pump in the battery manufacturer world to get enough volume of batteries for future cars.

                3) Tesla is well underway with its third car, the Model X, and the mass produced Model E is expected in about 4 years (when all the batteries and Superchargers are available).

                4) The short sellers are getting SLAUGHTERED on Tesla stock. At Tesla’s IPO, a prominent money guy from CNBC famously said he wouldn’t buy the stock, so it’s no surprise that there might be tendency for a not completely rosy picture from them (however, overall, I think they do a great job of “promoting” Tesla).

                5) At some point, Elon Musk will bow out, and then who knows? But, he has stated that he won’t sell out until after Model E.

                1. Ocean Railroader says:

                  It’s funny how I saw it in the core of Virginia in less then a year of it being made dispute it most likely being owned by someone like a doctor or someone like that.

                  The thing that made it interesting for me is that I have seen a idea of what a Honda Fit Ev would look like and the Spark and the Nissan Leaf. I even remember sitting in a Nissan Leaf and found it kind of small in size. But the thing that made the Tesla have the wow factor to it is that it’s a EV with a 200 mile battery range. But another shocker is that it’s about as big as the cars I’m used to driving and it at least looks like a normal car. And it does look like something from the future or at least what futuristic car should look like.

                  I can at least say is that the Tesla Model S is at least a major threat to any luxury car above the $70,000 range. And that based off the facts that it looks like a normal luxury car you would want to drive and the fact that it is at least the same size as many of the luxury cars vs being really tiny in like the other EV’s out there. I really think Elon Musk as at least shown leadership in things like space and electric travel where everyone else doesn’t have soul to do it.

  2. MDEV says:

    Yes Toyota Prius is not EV is not a good Hybrid not a good ICE. What is the hype of Toyota, their cars are are reliable as Korean and US brands, very spartan in design. He should recommend to Toyota to sale their TESLA stock.

  3. Robert says:

    Saga’s just “protecting his livelihood” in a sense. He can’t do that by actually doing anything anymore so he has to talk about it.

    He’ll be eating his words when the palette of EVs is bigger and the choice is there and fewer people buy a Toyota. Then it will be too late for them because their technology will be comparatively in the dark ages.

    Alright, we’re not their yet, but you only have to read around the internet for a couple of hours to notice what’s happening. Don’t they have internet in Japan?

    This is also interesting: “Toyota would not have developed the RAV4 EV if it weren’t forced to comply with California Air Resources Board regulations.”, effectively admitting that he and Toyota don’t give a monkeys about the environment. (holds head in hands).

    Also why would a Model S owner have two or three other vehicles? – that he would never want to drive? Totally out of touch.

    I’m convinced 2014 will be a great year for EVs, and hopefully the forward-thinking manufacturers can start really putting the hurt on.

  4. kdawg says:

    “Saga stated that Tesla’s business plan seems doubtful “when sales are based on targeting rich users for whom this is their third or fourth car.””
    ——————–

    Yeah, there’s no market for “rich users”. LOL. I guess Toyota should stop making Lexus’s then. Sorry Rolls Royce & Ferrari. According to Toyota your business model seems “doubtful”.

    1. Ocean Railroader says:

      I once walked though a Lexus dealership and half there cars are the Price of a Tesla.

  5. pjwood says:

    Toyota will soon have two big problems, the appetite whetting given their own legion of Prius PHEV buyers, and Honda’s superior hybrid technology. There’s only so much cash you can squeeze from what we may as well now call “old tech”.

    1. James says:

      Toyota is now using electric motors and supercapacitors in it’s Le Mans racing
      cars and fancy 414hp! 1.6L 4 cyl. Yaris concept car shown at Frankfurt.
      Imagine a Yaris hybrid with it’s NIMH battery pack removed, replaced by
      supercapacitors that take braking energy and power two electric motors at the
      rear wheels with torque differentiation! Wow! Toyota can do lots – they just don’t
      deem it profitableenough yet to move on from HSD.

      Tesla is hitting luxury carmakers in the gut. Companies that profit most from
      high volume-low price cars to the masses sit by and watch Tesla do the heavy
      lifting. I’m sure Toyota, as well as many others have a skateboard-type EV pre-
      engineered sitting in some secret garage just waiting for battery tech to
      increase capacity and decrease cost. If this doesn’t happen by the time Model E
      ( BlueStar ) surfaces – their hands will be forced to counter it with something
      equivalent or look pretty darn stupid.

      “He says – she says” garbage is pretty much just that. They make enormous
      amounts of money using the tried-and-true system of selling service repairs,
      and replacement parts. They all fear the day when all that goes away via
      EVs.

      1. James says:

        I think all of us who follow EVs smirk at TV and magazine ads showing off
        their expensive gas-gulping creations in expensive commercial flourishes.
        We see them tug at emotions of luxury and performance, get the fancy girl –
        show off your money…bla bla bla…Mostly too – they use that old brand
        marketing…”It’s an Audi – BMW – Lexus or Mercedes…”. Yes, they cite their
        patents, awards and achievements from the past…And Yes, we appreciate
        they once ruled the world. Rome once also ruled the world. Where are they
        now?

        So we know how great a Model S is, and MADE AND ENGINEERED IN USA.
        We know it is starting it’s own history with entirely new means of propulsion
        and energy rediscovered. New kinds of luxury and new messages about those
        who own one. Things that drive that market.

        The more attainable ( $30-35,000 ) a 200 mile Tesla gets with more and more
        Superchargers and QCs available – the more schmaltzy and old those TV
        spots look. And the more desperate attempts to sell that which is now old.

        Those companies have the billions of dollars to spend on these TV campaigns.
        They’ll pull in those rising-status buyers for awhile until information saturation
        informs prospective upmarket buyers that even their diesels achieve
        pathetic performance in comparison to a Tesla.

        I already see those ad campaigns as desperation and if Tesla can outsell their
        top-tier models already, without advertising – I believe they also can outsell their
        lower-tier models ( entry-level luxury/status ) with no ads as well.

        It’s a different world. I cheer on Tesla to succeed.

        1. pjwood says:

          You need to write more, to audiences away from the choir 😉 I agree. Tesla’s driving force is singularly “disruption”. People pay up for the cars for this reason, as much as they do the stock. And no analyst can put that piece in a box.

          There is nothing green about consumer-capitalism, and seeing things the way they are. It’s just there’s no money to be made promoting it, and that’s the tide we swim against.

          1. Ocean Railroader says:

            I saw a Tesla for the first time today and it is a fairly big and roomy EV compared to the other ones I have seen around town. It also looks the closet to a regular. The only thing that gave it way was the the T’s for Tesla on the hood of it and on the noise.

    2. Dr. Kenneth Noisewater says:

      I certainly hope folks don’t get turned off to true EVs by the relatively poor performance and dynamics of the Prius PHEV. True electrified drivetrains are a hoot, and can in theory deliver the best possible driving experience.

      For example: An electric GT car with 100kWh high-voltage battery using 400Wh+/kg cells, stick motors connected by short shafts at each wheel (say 100kW fronts and 150-200kW rears), with adequate grippy rubber and active suspension. If you can get that down to 1500-1800kg, you could likely crack off 0-60 in the low 3s (or even lower), quarter miles in single-digits, the best cornering and handling available, and still when driven typically return 2-3 miles per kWh. In a 5 passenger car. No noise, no shifting, just mash the pedal and go.

  6. Darius says:

    Toyota guys believe in FC future?
    Toyota guys do not believe in electric future although they have developed first electrified mass vehicle (Prius). What is their business plan?
    Statements of Toyota guy are one more argument not think about Toyota any longer.

  7. Assaf says:

    I wonder whether this old geezer’s pals in Toyota leadership told him that they are invested in Tesla 😉

  8. krona2k says:

    Sound like he’s just trying to convince himself he’s made the right decisions. I really think they aught to be developing the affordable 150 mile real world range EV, and they probably are.

  9. Bill Howland says:

    One thing that could give the Model S a run for its money is the 2015 Impala CNG, due this summer.. It has everything I want in a large car that I’ve mentioned several times the industry refuses to provide.

    The Model S comes close for me, but it is a LOT of $.

    A $30-40K CNG Impala (getting its traditionally excellent mileage for its size) with 200 mile range on CNG and THEN reverting to 300 mile backup range (500 total) with gasoline with seemless on the fly conversion between fuels is JUST what I want..

    Environmentalists who insist that central stations have to be natural gas fired, will find in this case the CNG IMPALA will use less NG than the Tesla S, and by a factor of several times improvement in our cold winters here in Buffalo, New York, since heating is an expense in the S but is free in the Impala.

    A $500 easily installable, RELIABLE (Hydraulic Piston Compression) home refueller made by either Whirlpool, GE, or Eaton would do it for me since I have a gas pipe 4 feet away in my garage, against an outside wall in case codes require outofdoors installation. That’s merely the final piece of the puzzle.

    Normally a New car you’d be a bit suspect about, so hopefully GM has developed enough CNG expertise by this time and has figured out how to make tanks last longer than 3 years, and has plugged all the leaks.

    A Bob Lutz, for instance, I can’t believe would release a vehicle with vampire drain (65 miles per night in zero-10 degree weather) such has been the Model S experience. My Roadster has well under 1/5 th the loss of the S, but then it was a different company headed by different people when my Roadster was designed.

    I’ve installed a 50 amp, 4 wire (in other words, modern) Range Outlet between 2 of my garage doors in anticipation of purchasing an S or X.

    The Impala CNG will be difficult for me to pass up, so Elon better get cracking on left over problems if he hopes to make a second sale with me. I guess I still resent what he did to Eberhardt.

  10. Teslit says:

    Toyota CEO Aiko Toyoda tried to persuade ELon to sell Tesla back in the day when they sold the NUMMI plant to them…..and he failed!!!! They would have shelved the patents of Tesla just like GM did with EV1.
    Now that the cat is out of the bag…they have to throw mud at Tesla…they knew that if Tesla was to become as successful as they are now..Toyota will not be mentioned in the Same Breath or same sentence as Telsa…..Toyota..(Sore Losers)

  11. Toyota boss say no business plan building high-end EVs, while Toyota plays with high-end racing electric vehicles: http://www.popsci.com/cars/article/2013-09/colorado-racecourse-electric-cars-are-new-performance-vehicles

    “Right foot on the go pedal, left foot on the brake, no shifting, and no lag in power and torque. You can focus more on what you’re doing,” says driver Rob Millen.

    Actions speak louder than words. I prefer listen to what drivers have to say, vs. to what ‘boss’s have to say. #justsaying 😉

  12. Ruffhouse says:

    Clearly, Saga misses the point. The Model S is not the climax of the Tesla plan, it’s one step in the process. Musk figured out what no one else trying to build electric cars to that point had: You cant start by trying to make the electric Model T. Musk found a market where EV’s could directly compete with ICE’s: high price, low volume, with the roadster. then as their tech and manufacturing matured, they were able to go slightly higher volume and lower price with the Model S.

    They are progressively working toward a high volume, low price, mass market vehicle, and so long as they can be profitable along the way, there’s no good reason to think they won’t get there.

    1. Koz says:

      Actually, Musk originally financially backed someone that figured it out.