Three recent bits of news made me wonder whether Toyota and its fellow Japanese automakers are risking a repeat of the decline of the Detroit Three because of their resistance to electric vehicles (EVs).
           The first item was the news that 40% of Americans who bought Teslas had switched from Japanese brands, primarily the Toyota group and Honda. Even though so many Teslas are priced like luxury cars, the biggest losers include models aimed at the middle-class market.
           Secondly, at a time when 25% of new car sales in China consist of EVs and plug-in hybrids, Japanese brands are losing sales in that country due to their lack of EV offerings. In the first three months of this year, Japanese brands tumbled a serious 32% year-on-year sales decline, far more than American, European or domestic brands..
           The final item, the most shocking of all, is that, in 2022, China surpassed Germany to become the world's second-largest auto exporter, and it is on track to surpass Japan in the next few years. This, too, is largely because of EVs, which accounted for half of all Chinese auto exports in the last few months of 2022. So, Japanese brands are losing sales to their Chinese counterparts in global markets as well as in China.
           Detroit's refusal to shift to small cars in the aftermath of the oil price shocks of the 1970s opened the door to Japanese brands in the US. Japanese automakers are repeating the mistake with EVs.

           For details, see https://richardkatz.substack.com/p/china-on-track-to-pass-japan-in-auto

Richard Katz