- Toyota’s bZ4X EV was subject to a recall and sales halt last year.
- It is now back on sale, but sales expectations are modest for 2023.
- Toyota prefers to emphasize its hybrid sales over its plans to expand its EV lineup.
After a recall and sales halt derailed the launch of Toyota’s first mass-market EV last year, the company is starting over when it starts selling the 2023 bZ4X to customers in the US once again. But even though there’s now a fix for the broken wheel hub bolt and dealers have the bZ4X in stock, expectations are modest for this new electric vehicle—as are Toyota’s broader plans for EVs as a whole.
During an interview at the Washington DC auto show last week, Toyota executives discussed how the bZ4X fits into the company’s broader electrification strategy. We spoke with Jason Keller, director of dealer policy and government affairs, and Rick Gezelle, senior principal engineer of regulatory affairs, about how the recall “hurt the momentum” of the bZ4X launch and how expectations are now being set as the car relaunches.
Why Toyota Prefers Hybrid
Toyota aims to sell just 10,000 units of the bZ4X this year, meaning it may be rarer than the GR86 sports car, which sold close to 12,000 units in 2022. That would also put the bZ4X significantly behind the 2022 sales performance of some of them. EV rivals: Ford sold less than 40,000 Mustang Mach-Es and Volkswagen sold more than 20,000 of the ID.4 model, and sales of the SUV could increase even more in 2023 due to expanded production.
Toyota prefers to emphasize its strong hybrid sales. The company is selling more than 500,000 electric vehicles in 2022, most of which are hybrids and plug-in hybrids (the fuel cell Mirai is also included in this number, but only makes up more than 2000 units of that number). Toyota has been clear about how it plans to prioritize hybrid production over EVs as a way of managing the limited amount of raw materials, especially for batteries, used to build electric vehicles. With the same amount of material required for one bZ4X, Toyota says it could build 90 hybrid Prius or 60 plug-in-hybrid RAV4 Primes. The company believes that maximizing hybrid sales is a better play for reducing carbon emissions, at least based on current market conditions.
Although sales expectations are small, Toyota admits that new efforts to get the word out about the bZ4X are still needed after recalls and sales halts canceled the initial launch. There will be a renewed marketing campaign launch in May to make sure customers don’t forget that bZ4X exists. We found several hundred new bZ4X models for sale through nationwide dealer inventory searches, and a slightly lower number of Toyota’s twin, the Subaru Solterra. While Subaru says the Solterra is available in all 50 states, Toyota describes the bZ4X on its website as, “available in select states only and in very limited quantities.”
No More Tax Credits
BZ4X also entered a different regulatory landscape than it should have launched on schedule. For one thing, it no longer qualifies for the $7500 federal tax credit. Under the old rules, Toyota ran out of time for the bZ4X to qualify because, in July 2022, it reached a sales volume cap due to its plug-in hybrid sales. According to the new parameters of the recently passed Inflation Reduction Act (IRA), the bZ4X and Solterra are not eligible for the credit because they were built in Japan, not the US
Keller mentioned a different subset of IRAs for commercial vehicles that could potentially apply to bZ4X customers who choose to lease. But the details surrounding these vulnerabilities remain vague—not to mention confusing for consumers. Toyota has yet to announce any plans for US EV production that could make the bZ4X model—or future bZs like the rumored bZ3X small SUV and bZ5X three-row SUV—eligible for broader tax credits.
Remember and Fix
The bZ4X initially went on sale in the spring of 2022, but in June the company announced a recall involving a defect in the wheel hub bolts that could cause the wheel to detach from the car. Only 258 cars were involved in the US, but those early customers were told to stop driving their cars. Toyota offers these owners extended warranties, loaner vehicles, repayments, loan/lease credits, free charges, and even started a buyback program for those who want to return their bZ4X (the company did not disclose how many of those customers chose to participate). The closely related Subaru Solterra, the bZ4X twin, was also affected by the recall, but Subaru had yet to sell any units in the US before it was announced.
It took Toyota until October to make the repairs, which involved replacing bolts and wheel hubs. The company began implementing repairs late in 2022 and the car went on sale again in November, with Toyota moving 988 bZ4X units in the fourth quarter and Subaru selling 919 Solterras (Subaru has not yet shared sales targets for the Solterra in the US).
Only time will tell if this rocky launch spoils the larger narrative of the bZ4X, but whether this new model tells the story of Toyota’s priority position. As the industry continues to shift towards electrification, Toyota appears to be hedging its bets until it becomes clear which solution will win out in the end.
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