I Attend Lexus Event To Understand Its Strategy On Climate - CleanTechnica

2022-06-07 07:25:41 By : Ms. Susan Song

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I Attend Lexus Event To Understand Its Strategy On Climate

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In this article, I cover the presentation Lexus executives gave to me and other journalists last week and their answers to a question challenging them on the weaknesses I saw in their plan.

Lexus VP of Marketing Vinay Shahani.

Last week, I was invited to spend 3 days in Plano, Texas, learning about the latest new vehicles coming out of Lexus and Toyota, driving many of them, given excellent access to both marketing and manufacturing executives, and given good food presumably in hopes that I would cover their products in the most favorable light possible. This is a followup to the article on the Lexus RX/RZ that I wrote last week. For more info on the all-electric RZ, see this recent press release.

During the first presentation, they went over their investments toward becoming a carbon-neutral company. These include:

In addition to their plan for carbon neutrality, they of course mentioned the progress they had made in other areas.

Lexus Multimedia System with 14-inch touchscreen.

They discussed and I experienced their new Lexus Multimedia System. This new interface is a big improvement over their previous generation of smaller screens that had to be controlled with a touchpad that I found to be confusing. I also found their voice recognition to be easy to use and quite accurate. Since I drive a Tesla every day, I am frequently a little confused when I get back to a car with traditional controls, but I found this new interface pretty easy to learn and easy to use. I got to drive about a 100 miles with it over the 3 days I was there.

Did you know that 23 children and 59 pets died last year in the US as a result of being left in a hot car? Toyota hopes to reduce that in future vehicles. It’s not for sale today, but they described their proof of concept called cabin awareness. This proof of concept was created by their team members using proprietary millimeter wave radar technology that is integrated into the vehicle cabin to detect the life form that’s left inside the vehicle.

Whether a child is in a car seat or in the footwell or even in the cargo area, they can pick it up if a living being is detected after a driver exits the vehicle and they can have a series of warnings that could warn other people of this potential danger. First, a warning light signals in the instrument cluster, and then the horn honks and the emergency lights flash. Following all of the early warning signs, the owner will then get warnings on the phone through the Toyota app as well as text messages. Now, if all that fails to correct the situation, they can remotely start the vehicle’s cooling system and contact first responders through an integrated SOS function.

Last year, they also introduced the privacy portal now accessible in the Toyota and Lexus app. This is the first I’ve heard of such an easy way to control your data. It gives their customers full access to understand how Toyota is using vehicle data and provide convenience and safety enhancements during the driving experience. But it also allows the customers to have more finite control on what they want to share and what they don’t want to share. So, in short, it’s not all in or all out — there’re giving the customer full control around what they want to share. They want to be a differentiator when it comes to privacy in the industry and provide control and choice around the personal and vehicle data.

Of the 131 journalists at the event, I’m confident I asked the toughest question. I had several journalists come up to me after the event and thank me for asking a good question.

Question: I’m thrilled to see the increase in electric and hybrid vehicles in your new introductions, but I worry that they are compliance cars or low volume. Are they available in 50 states? Can you give us an idea of the volume across those because a lot of times something exciting comes out like the RAV4 Prime but nobody can get it?

Answer 1: “It’s a good question. Every OEM has the same concerns. You have limited numbers of batteries. What’s the goal in the industry? Is it to bring out more EVs and to bring on more plugins? Is the goal carbon neutrality and what’s the best way to get to carbon neutrality? I read your stuff, so I know where you’re coming from. We want that to be 50 states. We want everybody to participate in the direction and intentionality to become carbon neutral. Every single competitor in this industry is coming up with a different way to try to solve that. You’ve heard from us whether it’s a Toyota or Lexus, our goal would be to continue to listen to the marketplace, to deliver powertrains that answer the needs of every kind of person in every kind of market. All the way through hybrid, plugin, fuel cell technology, battery electric. We believe that’s what the consumers are asking for — not only the choice, but the different needs that they have. We’re not going to provide today the exact numbers, but I will tell you that is our goal and our intentionality is for carbon neutrality. What we promised in 2017, before anyone was talking about — when we had our plan about going carbon neutral where we were going into 90% reduction. We are still on that path. We will deliver on the promises that we made to the globe. We will continue to do that. We are going to continue to see how many people we can bring along into that in any state or any part of the North America.”

Answer 2: Another executive added: “From a brand perspective, electrification is a foundational component of our marketing and brand strategy. We want to talk to the proliferation of the model, the fact that there’s more grades, the fact that we have more electrification, the fact that it’s not just about better efficiency, but also fun to drive. You know that that peak torque at zero RPM that comes with electric motor and combining that with an efficient gas engine is part of that Lexus driving signature and the fun that comes with the Lexus lineup.”

[Editor’s note: I think the executives answered Paul’s questions largely by not answering them. There is no real indication that its electric models will be high-volume, mass-market vehicles. Also, the note about limited battery supplies implies that Lexus has not gone ahead as a leader and secured very large volumes of battery raw materials or battery cells or packs in order to be able to produce mass-market models. Instead, it appears to be a convenient excuse that helps Lexus to not do what it didn’t want to do anyway. That’s my reading, at least, but I’m sure also the reading many people here will have. —Zach Shahan]

After speaking with some of the other executives about their electrification plans, two things became clear to me. First, they know their customers and they know most of their customers aren’t yet ready for electric cars; and second, that they are doing a lot to help climate, just in a different way than Tesla.

Now, after spending 12 years trying to talk my friends into buying electric cars (sometimes successfully, but many times not), I very much agree that most US customers aren’t ready, unless you both have a superior product and you promote it.  There is a lot of anti-EV propaganda floating around out there and Toyota and Lexus have not always been helping. Because of this and all the challenges in infrastructure and even the political challenge that some don’t want to buy an electric car since it will be a signal to their friends they are progressive (which a very bad label to half the country), it seems that Toyota and Lexus are trying to meet climate goals and promises without alienating half of their customers. In the truck market, that even means de-emphasizing the hybrid technology used to give their vehicles instant torque and great fuel economy, since hybrids aren’t associated with the macho image that is so important to that market.

For those not ready to plug in  — and I do wish Toyota and Lexus did more to promote plugins (PHEV and BEV) — Toyota and Lexus are really leading the industry with almost 4 times the number of hybrids as the rest of the industry. Their first quarter release shows 25.8% hybrids vs. the 7.1% figure I get from dividing 236,430 hybrid sales by 3.3 million US vehicle sales. To read Toyota’s side of the story, see the North America Environment Report, which highlights many of their achievements and goals, including having 55 hybrid models and selling over 2 million a year (both global figures). With hybrid vehicles about 30% more efficient (my estimate), this saves a lot of fuel, pollution, and carbon emissions without requiring any change of behavior or charging infrastructure.

Disclosure: I am a shareholder in Tesla [TSLA], BYD [BYDDY], Nio [NIO], XPeng [XPEV], and Hertz [HTZ]. But I offer no investment advice of any sort here.

I have been a software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I've also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code: https://ts.la/paul92237

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