Toyota executives answered questions about their plans for the development of the company to better compete in the electric vehicle market, with a special concern aimed at Tesla Motors.
President Akio Toyoda responded to Tesla’s valuation, set at about $400 billion, was unrealistically high; larger than all of Japan’s 7 car makers put together.
In addition, Toyoda said that his company can learn something from Tesla’s success with investors. He said Tesla’s business model could teach Toyota a great deal, especially about revenue for electric vehicles, regulatory credits, software, and renewable energy products.
But not everything was praise for the upstart American company.
Toyoda used the example of a restaurant to compare Tesla to Toyota. Whereas Tesla is like a restaurant that is still trying to sell its recipes, Toyota is a restaurant that is already attracting and serving many loyal customers.
“I am hesitant to say this — Tesla’s business, if you want to use the analogy, is like that of a kitchen and a chef,” Toyoda said.
“They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying ‘Our recipe is going to become the standard of the world in the future!’ At Toyota, we have a real kitchen and a real chef too and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already.”
Toyoda told his investors that his company manufactures and sells many more and a broader variety of cars than Tesla, the number is about 100 million cars on the world’s roads. The outlook for 2021 is for Toyota to sell about 7.5 million vehicles. Compare that to Tesla’s forecast to sell about half a million electric vehicles in 2020.
Toyota announced a joint venture last year with one of Tesla’s fiercest competitors, former battery producer and now electric car producer BYD China. Despite profit decline last quarter, Toyota has registered a 3% higher sales recovery and the general auto industry, which is still recovering from depressed sales due to the pandemic in China during the first six months of 2020.