Toyota shares fall after EV recall

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Toyota shares fall after EV recall

Toyota Motor shares fell after it recalled some of its first mass-made all-electric cars, launched two months ago, because of a risk of wheels coming loose, a setback to its ambitions to electrify its model range.

Toyota, the world's largest automaker by sales, said on Thursday it would recall 2,700 bZ 4 X SUVs worldwide.

Toyota, which has a nearly 20% stake in the Subaru Corp., said it was recalling 2,600 units of the Solterra, a related model.

The Solterra, Subaru's first all-electric vehicle, was jointly developed with Toyota and shares major components with the bZ 4 X.

The recall adds to problems at Toyota, which has been forced to cut production frequently this year due to the global chip shortage and other supply issues, and is facing investor pressure because of its slowness in embracing battery electric vehicles BEVs. It is embarrassing, said Christopher Richter, an analyst at CLSA. People have waited so long for Toyota to get a mass market battery electric vehicle, and just a few weeks after they get it in the market there is a recall. He said that the fix was unlikely to be expensive because the problem was a simple mechanical one and that was not an indictment of the new electric vehicle system.

Japan's safety regulators said 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.

A Japanese Ministry of Transport official said that the problem was discovered after people in the United States had driven the cars.

Toyota had reported that a car had been handled well, according to a report by the company. The driver was not known who the driver is, but the driver drove the car very hard, the official said. Toyota had found the problem, which affected only a handful of cars.

Spokespeople at Toyota and Subaru said the companies had not yet decided how soon they could fix the problem and proceed with the roll out, because the cause had not yet been determined.

Toyota said on Thursday that not every car of this model was subject to the recall, but declined to say how many it had built overall.

Subaru shares fell more than 5% on Friday, closing down 2.8%. Toyota's stock was 0.7% lower.

Toyota has come under fire for not acting fast 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 needs to be a variety of powertrains to suit different markets and customers.

Japan changed a policy document to show its support for hybrids was on par with BEVs after a lawmaker said the head of Toyota said automakers could not back a government that rejected the technology popularized by the Prius.

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