Both BMW And Toyota Show Concern Over EV Development Costs

DEC 3 2017 BY MARK KANE 52

Legacy automakers aren’t thrilled about the cost of introducing plug-in vehicles – we would be surprised if they were.

BMW and Toyota are the examples of established car manufacturers that are now making the forced difficult transition to electrification, but understand the threat to their finances at the same time.

BMW 530e

Both companies  have announced large increases of R&D spending to develop electrified, autonomous and connected models, but at the same time are still looking for cost savings to preserve their net incomes.

Toyota intends to spend a record 1 trillion yen ($8.8 billion) on the R&D in 2017.   While at the same time, in the first half of the year, Toyota noted around $900 million of savings in other areas.

Osamu Nagata, the company’s finance director in Tokyo said:

“We not only need to develop these leading technologies but also need to commercialise them. To do that, we need to increase R&D expenses. This will be a cost burden so we need to speed up cost reduction.”

BMW recently invested €400 million to expand its Munich R&D center. The Dingolfing centre (main EV powertrain facility) is also expected to undergo a serious expansion.

BMW said currency movements held back its performance, with revenue flat at €23.4bn (£20.6bn) and profits slipping 1.8pc to €1.8bn in the third quarter, because of higher expenses and R&D investments.

Sales of the company’s BMW, Mini and Rolls-Royce marques rose 1.2pc to 590,415 in the three months, compared with the same period a year ago.”

At least for the short term, Toyota recently increased revenues – and because of the weaker yen, increased profits even more.

“Toyota posted group revenues 8.6pc higher at 14.2 trillion yen (£94bn) and net profit 13.2pc stronger at 1.07 trillion yen in the first half.”
Better hoard that cash while you can Toyota, because you are going to need it to play catch-up.

source: Telegraph

Categories: BMW, Toyota

Tags:

Leave a Reply

52 Comments on "Both BMW And Toyota Show Concern Over EV Development Costs"

newest oldest most voted

What is it supposed to mean “play catch-up”? It is silly after noting trillion yen/year R&D spending that is outgoing for decades. Everybody else needs to play catch-up, in all kinds of new generation battery research, electric drivetrains that Toyota put on roads in millions since 1997, and so on.

They may need to play catch-up in hype generation. But maybe not really, trillion yen profit each year makes it unlikely that they would not need to resort to Ponzi like scheme in stock market for regular funding rounds to postpone default.

“…Ponzi like scheme in stock market…”

Is it possible this troll has repeated this lie so often he actually believes it’s true?

Nah, I think he knows better.

If it walks like a ponzi scheme, talks like one and smells then it is one

If it walks, talks, & smells to high heavens like a troll …, then it is troll…l m a o…

LMAOTA

A real ponzi scheme would be the Republican tax scam that will borrow 1-2 trillion dollars to give massive tax dodges to the very top of the 1%ers and additionally take from almost all of the middle class/working poor and give to the very richest on a one to one basis as well.

Of course, Will troll probably voted for them and as they say:
If it walks like a troll and it talks like a troll, its a troll–Will troll.

Giving money back to those who earned it is not a scam, it’s the right thing to do. The government doesn’t have any of its own money, the government doesn’t generate wealth, it only takes from those who produce and earn wealth. That includes all classes of people, not just the rich. The government takes from all of us.

Lol…this same argument should be used for the ev fed credit but no, that can’t happen! When it’s for a green cause it’s subsidies, when the corporations get it it’s tax reform.
I have no problem with corporations paying 20% as long i pay 20% not the 30% I currently lose. Any chance you hat will happen? Doubtful.

The government creates the infrastructure that allows wealth to be made. That is not free, quit being a free loader.

It’s a complete scam because its financed by deficit spending. Spending won’t be cut to make up for the tax cuts, so it’s really just stealing from the next generation.

There was simply no justification for the tax cuts at all, let alone with the way they were structured. They won’t substantially stimulate the economy, and even in the fantasy world where they did it still makes no sense. We’re already at full employment and in the eight year of economic expansion. It’s the time to be paying down debts, not to be adding to them.

This being a site for EV enthusiasts, maybe you should stick to cars. There is always the Huffington Post and Daily Cos for left-wing nonsense.

“This being a site for EV enthusiasts”
Actually, not true. There are lots of ev fans here but also trolls that want nothing to do with ev or green energy initiatives.

That’s like saying the picnic is for ants because there are ants infesting it.

InsideEVs isn’t for the trolls and EV haters. They’re just parasites infesting the site.

I can agree that Toyota is probably in an OK position on EV drivetrains just because they have so much hybrid experience from 4 generations of Prii. Just think of the years of design work that went into getting the 4th generation model to achieve their 5 or 10% efficiency improvement.

BMW not so much and MB, VW and Fiat / Chrysler are in a tough spot. They have really limited experience with the technology. Ya they can tear down a Tesla and your engineers can build some cool prototypes, but you can do 90% of the design in the first 50% of the design effort, while the last 10% takes the remaining 50%. The Pacifica Plugin and Model 3 rollouts are great examples. One way or another I think you will see these companies have to rely heavily on companies like LG to catchup

Toyota is so huge they don’t need any previous expertise.

You need to understand just how big these legacy automakers are. Companies like Toyota and GM sell 10-13 million cars and trucks per year. They have massive industrial and military contracts.

In a fully EV world – Toyota really doesn’t have advantage over their rivals like Hyundai or Nissan.

Toyota uses a platform for Prius that was designed for a gas engine. Hybrid Synergy Drive is a gas engine-centric design.

Toyota needs a skateboard chassis/platform just like everyone else. They need to sort our their li ion battery suppliers like everyone else. They can talk solid state batteries all they want – but that is in the R & D stage and won’t be ready for mass production anytime soon.

This may leave Toyota BEHIND their peers in bringing out competitive vehicles to Tesla Model 3 and Y.

With no BEVs and one lousy ICE-coverted PHEV they definitely need to play catch-up.

If you would have watched the automotive progress the last decade this would not be a surprise to you. It is not like it’s a secret that Toyota are falling behind.

That’s trillion yen for the first half. About $18 billion per year. Toyota is playing the long game and should not be dismissed.

The bigger they are,the harder they Fall…..

Too bad Toyota wasted all that $cash on fool cells and NiMH batteries. Now they have to catch up on 5 years lost on battery electric drive trains while losing market share to other BEV OEMs

Really, there should be a limit. Delete the senile comments to keep this Site Relevant with good content.
Typically, you learn more in the comment section than in the article, until the Trolls show up.

So let me get this right. Toyota has increased its R&D to develop technology to support its vehicle electrification efforts, but it has the most vehicle electrification knowledge? Oh, and doesn’t have a single EV model for sale.

RRRRIIIIIGGGGHHHHTTTTTT….

I assume you’re alluding to the Prius and its 30 year old battery technology. Umm, that ain’t gonna cut it. Toyota actually knows this (hence the R&D). You don’t, but you’re no one so whatever.

It’s high time they pour more of their extensive ICE profits into the move to electrification. Obviously, the 20 mile PHEV versions on the menu today aren’t going to change the world. This time of indecision for ICEmakers is the environment Tesla needs – 5 or 7 years to build the Tesla brand before the sleeping giants figure out they need to pour big and bigger funds into developing their All-Electric platforms and figure out how to charge them. If companies like Volkswagen, Toyota and BMW truly put forth major efforts to make skateboard-type EV platforms they can market sedans, crossover SUVs and small trucks upon – Tesla would be done, stick a fork in them. As it is, Tesla is being criticized for large capital expenditures, but the Supercharger Network is maturing in such a great way – even secondary “Destination Chargers” popping up all over. This happens while the big ICE boys sit around still hoping Tesla will fail. I think today’s story indicates what happens when cracks appear in that plan. ICEmakers have enough money to hedge their bets by building facilities that can ramp up production of “i” Series-type vehicles or a Toyota platform that is… Read more »

“We’ve yet to see the likes of BMW, VW, Mercedes, Audi or Toyota make EVs which compete directly with THEIR OWN GAS MODELS.”

Or anybody else. GM carefully picked market segments in which they didn’t already have a strong competitor for the Volt and the Bolt EV. Everybody complains about the style of the Bolt EV, but I submit that choosing an odd style was a deliberate marketing strategy on GM’s part; they didn’t want the Bolt EV to directly compete with any of their established models.

So far as I can see, the Buick PEV will be the first plug-in EV designed to directly compete with a broad segment of the gasmobile market.

Exactly.

The Buick Bolt, built on Bolt EV’s platform yet stretched a couple inches – won’t compete with ICE models due to price.

At $45,000-50,000, the Buick still will be a niche product. Buick customers arriving at the dealership, and spot that Buick EV, but gasp at the price – then be steered towards the Encore.

I pred1ct 17-20,000 Buick EV CUV sales per year. No dent in sales – but the Buick brand gets a green halo product, and the Sonic-Bolt EV production line gets a bit more production which it truly needs.

“Nothing has changed in that Tesla is free to run full speed while OEM ICEmakers have to sell gas dinosaurs and tell the car buying public they are “state of the art”. They have to keep up the charade that gas cars are as good or better than EVs while ramping up to build lots more EVs!”

Spoken like a true believer.

Reality is the average joe-six pack car buyer will not consider a vehicle that has to sit for “hours” for a refill. This is the “what if I need to ” principle that sells large SUV’s and trucks when a cheaper, more fuel efficient sedan or hatchback would adequately meet their needs. The EVolution (sic), especially trucks, will be to PHEV’s not BEV’s.

BEV’s can only take over when the quick fill issue is solved. After all, gassers didn’t need a gasoline pump at their homes to dominate over the early sales leading EV’s back in the early 1900’s. No, it was the abundance of quick fill locations. Toyota and the other manufactures know this.

Yeah, but the funny thing is the automakers managed to outsmart the general public on the SUV thing. Now they just sell people an SUV-shaped car that gets nearly as much gas mileage and has nearly as little utility. But it’s great because it turns out that’s all people really want: the illusion of utility.

In other news, water is wet and the sun will rise in the East tomorrow.

There might be a grain of truth in there somewhere. It might be self evident at some point. I’ll just have be patient on this one, and hold out, and wait and see!

Wonder how much of its own cash Toyota wasted on its hydrogen efforts. Maybe not that much as it never whined about that, or maybe it was a lot but considered well spent for the red herring/ dragging out the ICE age value.

Didn’t do much to stave off the plug-in age in the end so I’m sure these are expensive times for Toyota as it’s forced to make the transition earlier than it would have liked.

I think Toyota wasted more of the Japanese and California taxpayer’s money on this hydrogen folly than their own.

Anyone wasting resources on developing hydrogen is just running in circles.

Toyota has started changing it’s corporate message from hydrogen to better ( solid state ) batteries.

Still, the giant car companies can afford such frivolities as hydrogen or building an “i” series of cars to appear green.

There just isn’t enough motivation for ICE OEMs to truly dive into EVs until a tipping point occurs in the market. This occurance has to happen from outside – not within their current structures. A rogue competitor has to do damage to their current system of selling old tech as high tech.

Hydrogen might not be as effective a smokescreen for Toyota as fully self-driving cars are for other ICEmakers. Today, we see AI as this promise for a new future…Not electric power. The big message today from the legacy boys is “we will bring you the self-driving car”. It’s the same message as a hydrogen future. Pie-in-the-sky promises while selling you the same old gas engine, exhaust pipe and liquid fuel tank.

I’m not sure if this is the place to make this comment, but how many of you turn green and want to throw up when you watch TV advertisements telling us all how “state of the art” each ICEmaker OEM crossover SUV is?

I watch sports, including auto racing. In recent years, I’ve cut my auto racing fandom way down. F1 used to be the showcase of tech, as were the top endurance race series. I just can’t get into them as much now. I know the big technology improvements are in auto-drive safety and all-electric cars.

Formula E is in it’s infancy, but the ICE OEMs are joining in. Big legacy F1 sponsors are cutting out and running to Formula E. There is a sense that EVs are the future.

We often see this in industry. Evolution forces

The problem with much of ICE car company spending, is that they have wasted so much of their money on trying to retrofit EV drivetrains into existing ICE cars. It has cost them billions and the converted ICE cars tend to underperform compared with new-sheet designs from other companies.

It’ll cost them more in the long run if they do nothing, I think they’re realizing that now.

Also they are also optimizing their R&D, flexible global architecture’s are now all the rage.

All the money they wasted on that Toyota foolery, what a boondoggle. A rotting albatross around their necks that they can’t remove.
Water, Water, everywhere, but it costs too much for cars to drink.

Foolery, fool cells, fool anything to refer to hydrogen fuel cells is a tired meme. And a was of readers’ time. At this point, it sounds like Republican election slogan but it’s perpetrated by the BEV croud whom I want to like but am unable to, despite being pro-electric-car myself.

I’m not sure if this is the place to make this comment, but how many of you turn green and want to throw up when you watch TV advertisements telling us all how “state of the art” each ICEmaker OEM crossover SUV is? I watch sports, including auto racing. In recent years, I’ve cut my auto racing fandom way down. F1 used to be the showcase of tech, as were the top endurance race series. I just can’t get into them as much now. I know the big technology improvements are in auto-drive safety and all-electric cars. Formula E is in it’s infancy, but the ICE OEMs are joining in. Big legacy F1 sponsors are cutting out and running to Formula E. There is a sense that EVs are the future. We often see this in industry. Evolution forces change. I watched T-Moble post TV ads for years saying their HSPA+ was 4G but it truly was not. Look back a few years to T-Mobile running TV spots claiming, “Our 4G is better than their 4G” Yet T-Mobile was flying around, spending tons of money converting their systems to 4G LTE, the very system they said was inferior to theirs!… Read more »

Couldn’t agree more James, all you guys are nailling it except the Russian troll zzzz desperately and lamely trying to spread his disinformation.

All the laggard OEMs are desperately trying to ease as slowly as possible into electrification because it blows away their existing technology, IP and profit base of their business model.

It is primarily Tesla (with a big assist from mostly forward-thinking governments like CARB, China, etc) that is blowing up and seriously disrupting the laggard OEMs foot dragging.

Fast moving Tesla with its high-end BEVs and charging ecosystem and now a mid-range sedan and a Semi is sending ripples all through slow-moving, status-quo boardrooms all over the industry.

Where the crap is really going to hit the fan is when the Tesla pickup truck comes out since this segment alone is the biggest profit center for the American laggard OEMs.

You will see asses and elbows as the laggards belatedly scramble to meet that threat.

Of course GM’s recent reversal to support DCFC networks is a stunning de-facto admission that they got it wrong from the beginning and they are at least showing signs of meeting the Tesla challenge.

I’ve spent too much time pondering the pickup truck dilemma. VIA is a company that nailed it with it’s EREV solution. A trThck that doesn’t re-invent the wheel, keeping versatility and utility while adding short-range economy and a few perks like home backup power and portable power tool energizing. The massive juggernaut that is the American full-size pickup truck industry seems unassailable. The message to the American male of horsepower, towing ability and ruggedness is too well entrenched in the public mindset for an EV truck with limited range to make inroads. For one, that EV truck needs a massive battery pack, thus high MSRP. For two, the whole big grille, semi truck imagery of the gas pickup truck is a thing. Tesla hasn’t even sold a semi truck that is on the road now, working – let alone them being ubiquitous on our public roads and highways. Instead of playing the Nissan or Toyota game and trying to bring yet another pickup truck to challenge Ford, GM and FCA, Tesla may have struck on a clever way to attack the gas pickup truck dynasties. Elon Musk tweeted that a Tesla pickup truck may take a lot from the semi.… Read more »

Patience, Grasshopper!

Other than Tesla’s cars, plug-in EVs are still struggling to compete with gasmobiles in every segment of passenger vehicles. Pickups are going to be the hardest segment to penetrate, because of the issues you cite. But the EV revolution doesn’t have to penetrate all segments of the passenger vehicle market at once in order to progress. EVs are still struggling to have much impact on the market for compact sedans and small hatchbacks, which should be the easiest segments for PEVs to compete in, with their limited onboard energy.

As EV tech (and batteries) improve, the EV revolution will progress to effectively penetrate more and more segments of the passenger vehicle market, including — eventually — pickups.

@get real
“Where the crap is really going to hit the fan is when the Tesla pickup truck comes out since this segment alone is the biggest profit center for the American laggard OEMs.

You will see asses and elbows as the laggards belatedly scramble to meet that threat.”

Yep. I can’t wait for the day. The big 3 have dragged their feet so long now they can’t catch up.

The semi is within grasp of a rich boys toy. It will go 0-60 in 5 seconds without a trailer.

Put an oversize truck bed on it and load up one GM’s gas pigs in the back jst for a laugh. Tesla’s sketch may actually come to pass.

The Tundra won’t survive a price war.

“Of course GM’s recent reversal to support DCFC networks is a stunning de-facto admission that they got it wrong from the beginning and they are at least showing signs of meeting the Tesla challenge.”
——–
I don’t think GM is going to build a DCFC network themselves, unless you can link something that says they are. I think they are going to continue to support infrastructure as they have since Day 1, which is home/work charging & education; and “partner with others to help advance the network” as they have previously stated.

It still amazed me that no-one else is trying to meet and exceed Tesla head on:

Performance
Range
Style
Over the air updates
Charging network
Customer service

Some of the up and coming models address some of these things but for me they need to tackle all of them.

I consider myself a typical EV driver, and can now only see myself as a future Tesla customer because I’d rather take my chances with Tesla’s perhaps lower quality with the knowledge that they are at least trying to deliver the complete package.

I’d say the Bolt EV not only met Tesla’s proposed Model 3, but exceeded it in many areas, including being available over a year sooner.

The Tesla truck could also be the Tesla van. Make the platform right and a personal use + commercial van can both be a reality off the same battery pack/platform. Any pickup truck owner, myself included, knows a huge drawback to your truck is cargo security. You have to buy a fiberglass canopy at great expense, which is not very secure at all and gives you the limitations of not being able to stand up in back to deal with your cargo. Vans, like the Mercedes Sprinter van with high roof gives you versatility and safety. You can put anything in back, stand up to deal with it, and everything keeps safe and dry. These are things conventional pickup trucks just can’t do. Picture that cabover format, like the Tesla semi, with a van back. It can easily also be an open bed too. But possibly with a Tesla-made bed cover option – one that is lockable and secure and maybe tall enough so you can stand in back. AWD without half shafts, transfer cases and clutches galore. A lower floor height makes for headroom without a tall form. Why go aftermarket for a bed cap when the maker of… Read more »

The Toyota Sienna/Tacoma mashup concept that they showed a few years ago, with a submersible electric drivetrain would make one awesome adventure mobile

The problem is profitability of EVs, not investment.

The large globals routinely spend several $B to design new platforms (Ford spend $6B on the Mondeo/Mystique platform, where Chrysler “cheaper out” on the Avenger platform at only $900M – most fall between these two)

Once the cost of the major EV components, the they can stop redesigning ICE platforms and redirect that investment to EVs.

In the mean time, you’ll see lots of lower volume projects to learn from and develop new manufacturing processes.

All these bogus R&D claim are sickening! No way to track them. And years later not even a product on the market. This is nothing but a ploy to keep brand loyal customer going out to buy available products right now. How come Toyota, Ford, Chevy cannot even put a 6.6kw on board charger on plugin hybrids? It’s nothing but a step down transformer and heavier gauge copper wire that cost no more tHan $50!

Yes, marketing ploy! Marketing is nothing but clever sanctioned legal terms to trick customers.

Admitting to high development costs is a step into the realms of reality. It is now time to kill your darlings as in hybrid and fuel cell. They only serve as distractions in the long run.

I don’t think legacy automaker’s hydrogen programs were a distraction so much as a shield. They have engineers, and they could tell as easily as us outsiders that hydrogen is never likely to go mass market for personal vehicles. But by pushing it they could avoid the far more disruptive possibility of an EV future. And, if by a miracle hydrogen ever did take off, they’d still be able to keep their sales model (dealers selling a high-maintenance product that would generate lots of service revenue).

Pure BEVs require a much more radical approach than FCEVs. The refueling paradigm is completely different, and there’s no way you can mass market them through the existing dealer network without reworking of the revenue model. If legacy automakers want to go full EV, they’ll probably need to dump the dealerships and collaborate on a usable supercharging network (a la Tesla). Both of these are way out of their comfort zone, and the former would generate a massive legal problem.