Toyota Motor Corporation TM and Subaru Corporation FUJHY, a manufacturer and distributor of automobile products, are set to launch a jointly developed electric vehicle (EV) in Japan, the United States and Europe in 2026, per Nikkei. The production of the EV is scheduled to begin in January 2026 at Subaru’s Yajima plant in Japan’s Gunma prefecture. The plant’s production capacity is expected to rise in the range of 15,000-20,000 vehicles per month.
Due to high EV prices, the companies aim to cut production costs and speed up development by standardizing key components. In May 2022, Toyota and Subaru joined hands to develop an electric sport utility vehicle (SUV) and launched it as the Toyota bZ4X and the Subaru Solterra.
This new EV, also an SUV, will use parts from the Toyota bZ4X and other models to keep costs low. It will be primarily sold in North America, Europe and Japan. In May 2024, Subaru announced that along with Toyota, it would jointly supply four EV models by the end of 2026. Acknowledging the challenge of developing EVs independently, Subaru is strengthening its lineup through this partnership.
TM, which is struggling with high R&D expenses on advanced technologies and alternative fuels for the development of electric and autonomous vehicles, aims to generate 40% of its global sales from EVs by 2025 and 70% by 2030. The company plans to invest more than $35 billion in EVs through 2030 and introduce 30 new EV models by the end of the decade.
It aims to expand global sales of battery EVs to 1.5 million units in 2026 and 3.5 million units a year by 2030. Toyota plans to introduce a new series of solid-state batteries to extend the range of its EVs while reducing production costs. The ratio of electrified vehicles sold to total sales in fiscal 2024 was 37.4%. The company expects the ratio to increase to 46.4% in fiscal 2025.
TM’s Zacks Rank & Key Picks
Toyota currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Blue Bird Corporation BLBD and BYD Company Limited BYDDY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved by 65 cents and 80 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 17.12%, respectively. EPS estimates for 2024 and 2025 have each improved by a penny in the past 30 days.
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