Toyota rolls out first electric vehicle in Japan for lease

Toyota rolls out first electric vehicle in Japan for lease

TOKYO Reuters -- Toyota Motor Corp rolls out its first mass-produced battery electric car in Japan on Thursday for lease only, a strategy that the automaker says will help ease driver concerns about battery life and resale value, but has raised analysts' eyebrows.

In Toyota's home market, gasoline-electric hybrids are more common than electric vehicles EVs, which accounted for only 1% of the passenger cars sold in Japan last year, according to industry data. The market is growing fast and foreign automakers, including Tesla Inc, are making visible inroads on the streets of cities such as Tokyo.

Toyota will lease the bZ 4 X sport utility vehicles SUV at the cost of $39,000 for the first four years, despite the fact that it has insurance, repair costs and a battery warranty included in the deal. Cancelling in the first 48 months will result in an additional fee.

While EV acceptance in Japan is slow, that will change, and Toyota could risk losing market share by focusing on a model of leasing rather than purchasing, said Christopher Richter, CLSA analyst.

He said that anything you are doing that's making it harder to buy is probably not a good thing.

It is a strategy I am not that fond of. It shows that Toyota is taking the home market a little bit for granted. Toyota will commit 8 trillion yen $62 billion to electrify its cars by the year 2030.

Toyota hopes to lease 5,000 of the SUVs in the current financial year -- about the same amount of EVs that analysts estimate Tesla sold in Japan last year.

The automaker plans to sell the bZ 4 X in other markets later this year, and pre-orders have already started in some European countries.

Toyota hasn't decided when it will start selling the cars in Japan, a spokesman said.

EVs became popular in Europe thanks to the lease programmes offered by employers, and Toyota may be trying a similar tack to popularise electric cars, said Seiji Sugiura, senior analyst at the Tokai Tokyo Research Institute.

Shinya Kotera, the president of KINTO, said that the first-time customers are concerned about battery life and the potential fall in the trade-in value over time.

He said that it was our role to dispel anxiety toward EVs.

In 2021, imports of battery EVs jumped almost three times to a record 8,610 vehicles, according to industry data. Around 60% of those were Teslas, according to analysts.

Japanese automakers are cautious about switching into the all-electric lane.

Toyota pioneered the hybrid more than two decades ago, and it has big ambitions for both hybrids and hydrogen-powered vehicles, even though it is investing more to boost its battery EV line-up.

In 2010, Rival Nissan Motor Co introduced mass-market EVs with the Leaf, but will launch only its second battery EV model, the Ariya SUV, on Thursday. The Ariya will be sold for the equivalent of $41,500, not including a government subsidy.

Honda Motor Co laid out a plan to roll out 30 electric vehicle models by the year 2030.