Partnership with Toyota for Electric Crossovers: Reducing Risks and Mitigating Challenges
Subaru, known for its strong collaboration with Toyota in vehicle development, recently announced plans to deepen their partnership. Subaru CEO, Atsushi Osaki, confirmed that the two automakers will come together to produce three new electric crossovers within the next two years. This strategic move comes as the companies acknowledge the significant investment and time required for new electric vehicle development.
Osaki explained the rationale behind this collaboration, stating, “At the moment, it is quite difficult to predict how things will go from here with EVs. There is a huge risk for us to go it alone in this field. We have held talks with Toyota and have agreed that it is better to reduce risks through joint development.” With Toyota’s extensive resources and ownership of a 20 percent stake in Subaru, relying on its more established counterpart makes sense for Subaru.
In addition to shared development efforts, Subaru plans to increase Forester production at its Indiana facility and introduce hybrid variants. Collaborating with Toyota will enable Subaru’s electric vehicles to benefit from federal tax credits by utilizing Toyota’s U.S. manufacturing footprint. This partnership provides Subaru with time to carefully consider investment decisions regarding its production capabilities, leveraging Toyota’s expertise and support.
While Subaru is committed to expanding its electric vehicle offerings, Osaki emphasized that the company will continue to sell internal combustion products alongside EVs. Osaki stated, “While we have steered toward EVs, we find it important to sell internal combustion products at the same time. So, we already have plans to expand our hybrid product lineup.” As part of this expansion, Subaru will introduce a next-generation hybrid system for the Crosstrek, in addition to the new Forester.
Subaru’s CEO also highlighted the company’s strong performance in the fiscal year, with annual net income nearly doubling to over $2.5 billion. The success is attributed to the significant increase in Forester sales, which reached 48,456 units in the first quarter of the year.
In summary, Subaru’s partnership with Toyota for the production of electric crossovers is a strategic move aimed at reducing risks and mitigating challenges in the competitive electric vehicle market. By leveraging Toyota’s resources and expertise, Subaru can navigate the complexities of EV development more effectively. The collaboration also allows Subaru to expand its hybrid product lineup while continuing to sell internal combustion vehicles. With a strong financial performance and growing sales figures, Subaru is well-positioned to thrive in the evolving automotive landscape.