Shares of Toyota, Subaru fall after EV recall

Shares of Toyota, Subaru fall after EV recall

TOKYO: Shares of Toyota Motor Corp and Subaru Corp dropped on Friday after the two Japanese car makers announced the recall of their first mass-produced electric vehicles EV for the global market because of a risk the wheels could come loose.

The recall of 2,700 units of the bZ 4 X SUVs, rolled out less than two months ago in Japan, is a setback for the world's biggest automaker by sales, as it seeks to take on larger EV rival Tesla Inc.

On Thursday, a Toyota spokesman said that not every model was subject to the recall, but declined to say how many it has built overall.

Toyota, which has a nearly 20 percent stake in the Solterra, is recalling 2,600 units of the Solterra, its first all-electric vehicle developed with its top shareholder.

Japan's safety regulator said that sharp turns and sudden braking could cause a hub bolt to loosen, raising the risk of a wheel coming off the vehicle. It said it was not aware of any accidents caused by the defect.

Toyota's shares were down 1.6 per cent, and Subaru's shares slumped 5 per cent.

Toyota has come under fire for not acting quickly enough to phase out gasoline-powered cars and its lobbying on climate policy, once a favorite with environmentalists for its popular hybrid Prius model.

The company has pushed back against the criticism, arguing that there is a need to offer a variety of powertrains to suit different markets and customers.

In Toyota's home market, gasoline-electric hybrids are more popular than EVs, which accounted for just 1 per cent of passenger cars sold in Japan last year, according to industry data.