Nobody thinks Akio Toyoda won’t be an active participant in Toyota’s future, Senator Joe Manchin’s attempt to curb existing electric vehicle tax credits has hit a predictable snag, and Ford can’t ignore Formula 1 any longer. All that and more in The Morning Shift for January 27, 2023.
1st Gear: In the Background, But Still Present
Akio Toyoda’s decision to step down after 13 years leading Toyota came as a shock yesterday, as did the replacement he named — 53-year-old Lexus boss Koji Sato. While Toyota has never been strictly a family-run business, half of its 12 presidents have been in the family, and Akio marked the first since his uncle Tatsuro left the post in 1995.
But “Morizo” isn’t going away. As he stated yesterday, he will remain on as the company’s chairman. Analysts have some thoughts as to what that precisely means for Toyota’s immediate future. From Reuters:
Market reaction to Toyoda’s announcement was muted - the automaker’s stock ended little changed in Tokyo on Friday - as investors bet the company was unlikely to see a big overhaul in the foreseeable future.
“The new appointment is less about a change in direction and more about careful consideration of the best possible way to organise the handover, avoiding disruption and chaos,” said Julie Boote, an analyst at Pelham Smithers Associates in London.
“It’s likely that he’ll remain active as chairman for a long time and continue to put his mark on Toyota.”
Those within Toyota’s walls don’t see much changing in the near term, either:
One Toyota executive, who asked not to be identified, said the automaker was headed for a period of “cloistered rule”, referring to a period in Japan’s history when a retired emperor continued to play a key decision-making role.
At a news conference on Thursday, broadcast on Toyota’s in-house media platform, Toyoda looked fully in control, turning from time to time to offer instruction and reminders to Sato.
Still, outsiders have been able to put their stamp on the company. Toyoda’s soon-to-be predecessor as chairman, Takeshi Uchiyamada, is often credited with spearheading development of the Prius.
“Toyota is a public company that likes to pretend it’s a family company,” said John Shook, a former Toyota manager who now consults on the lean management techniques pioneered by the automaker.
“Choosing someone who is much younger and with Sato’s background indicates Akio recognised the time for change had come.”
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Comes equipped with an LED which goes on when the trigger is pulled. You’ll a clear view of whatever you are drilling or screwing with minimal shadows.
Or at least the time for public-facing change. Maybe Toyota’s transformation into whatever it does next — taking EVs seriously, perhaps — will happen so gradually, nobody will notice.
2nd Gear: Not Everyone Sees It Manchin’s Way
Earlier this week, Senator Joe Manchin proposed legislation to make the Inflation Reduction Act’s stringent battery sourcing rules for EV tax credits retroactive to January 1. Since the start of 2023, the battery side of the criteria has not been applied, as the U.S. Treasury must first issue guidance to automakers before it can take effect.
Manchin sought unanimous support from his colleagues. It appears he won’t get it, thanks in part to Senator Debbie Stabenow, per Reuters:
“China has cornered the electric vehicle supply chain market,” Manchin said. [The] Treasury is “now continuing to let the $7,500 credit go without any concerns at all about the critical mineral requirements.”
Manchin, joined by Republican Senator Mike Braun, sought unanimous consent to pass the proposal but Stabenow objected.
The EV credit is “complicated, it doesn’t work for several years for American companies,” Stabenow said. Automakers need more time to meet battery sourcing requirements, she said.
“It is not unreasonable what Treasury is doing ... they have been given an incredibly complicated task to try to figure out how this consumer credit will work,” Stabenow said.
In a Reuters interview, Stabenow said Manchin’s bill “would literally take away credits from people who are buying cars today ... Fundamentally, (Manchin) is not a fan of EVs.”
It would also take away credits from people who have bought cars in the last three weeks — cars purchased by people based on the understanding they’d be saving thousands at the end of tax season. The Treasury is going to need a little time to figure out the details; that shouldn’t be too much to ask, given how convoluted the bill’s become.
3rd Gear: Ford Can’t Ignore F1, Especially If GM Can’t Ignore F1
Word on the street is that Ford wants to cash in on Formula 1's popularity and may enter a deal with Red Bull to brand the team’s power units after the next-generation engine regulations take effect in 2026. Of course, when Motorsport.com recently asked Ford about its attitude toward F1, the response was noncommittal:
Ford Performance boss Mark Rushbrook has suggested a change in mindset, though, with F1 now worthy of consideration thanks to its recent growth.
Speaking exclusively to Motorsport.com, Rushbrook said: “Formula 1 is certainly strong and growing, both in the United States and globally.
“What they have done well is create great racing and great competition. It’s still the pinnacle, but they’ve been able to reach new audiences with things like Drive to Survive.
“As a company we go racing for innovation, tech transfer, the learning opportunity, but also for marketing reasons as well. It’s shifted for sure, and it definitely requires consideration.”
Asked specifically about the rumours regarding a potential 2026 entry, Rushbrook said: “We don’t comment on speculation, but it’s the same with all these series that are out there.
“It’s our responsibility to study them and understand them, and then make decisions on whether it makes sense or doesn’t make sense.”
Thing is, General Motors might be making a bid via Cadillac to partner with the long-teased Andretti outfit. Should that happen you just know Ford is going to be watching closely, even if Rushbrook’s playing it coy right now:
Having one of its main market competitors racing in F1 would certainly deliver some impetus for Ford to take it on.
However, Rushbrook felt that what GM did would not strictly dictate Ford’s plans.
Asked if GM’s involvement would change anything for Ford, he said: “Not necessarily. But it will be interesting to watch how that progresses, whether they will be successful in joining as an 11th team.”
I love imagining Ford rushing into F1 mostly because GM’s there. Big Three pettiness and jealousy are a wonderful, eternal thing. Technically Stellantis already has been on the grid, if you count Alfa Romeo. That won’t last much longer given Audi entering Sauber’s fray, and sadly for Stellantis, nobody ever really took Alfa seriously anyway.
4th Gear: Panasonic’s Eyeing Another U.S. Plant
If you’re interested in the goings-on in the EV battery manufacturing space, go check out the interview Bloomberg just published with Panasonic Energy North America president Allan Swan. The short of it is that Panasonic has diversified its partners since being all-Tesla in its early days, and it’s going to need more production capacity, like everyone else. A new plant is likely coming, though Swan won’t say when and where yet:
Is it possible you’d announce another plant in the US by 2024?
We’re very much concentrated in Kansas, of course, we want to get that right. We’ve taken the technology, but now we actually have done the scaling up. That’s what makes our position really quite prominent in the industry: 66 batteries a second, it’s a lot of batteries. That’s 2 billion batteries a year. And we know we probably can do that. So Kansas takes us to that next stage.
There was that whole beauty pageant between Kansas and Oklahoma to win that plant, each state was throwing incentives at you. Is there still potential for a plant in Oklahoma?
We estimate we’ll grow roughly fourfold by 2030. So yes, there’s definitely potential for other plants in the US.
You have to respect Panasonic — the company that gave up making TVs to concentrate on nose hair trimmers and microwaves, all the while quietly growing as Tesla did, to the point where it doesn’t need Tesla anymore. Don’t bet against them.
5th Gear: American Honda Sees a Brighter 2023
2022 was not a banner year for Honda’s U.S. business, but it has reason to believe it’ll reach greener pastures by the end of 2023, according to Automotive News:
American Honda Motor expects to increase its sales volume 25 percent this year over its disappointing 2022 performance, which resulted in under 1 million vehicle sales in the U.S. market and a last place finish among the top U.S. manufacturers.
Honda brand projects it will close 2023 around 1.2 million sales, and Acura is targeting 160,000 units, said Mamadou Diallo, vice president of auto sales for American Honda, during a media briefing earlier this week.
Diallo, who will step into the expanded role of American Honda senior vice president of auto sales when Executive Vice President of national operations Dave Gardner retires at the end of March, called the year just ended “frustrating” and said consecutive challenges prevented production of consistent supply.
The key is that Honda’s entered 2023 with more inventory and also a plan to build more cars. It’ll also introduce its first Ultium-based electric SUVs this year — the Prologue and Acura ZDX — just for North America.
Honda started last year with about 20,000 vehicles in on-hand inventory and hovered in the single digits of days’ supply for the bulk of the year, Diallo said.
Looking ahead, Diallo said the brands are optimistic.
“We’re starting the year with roughly double the on-hand inventory compared to last year and plan to build about 1.3 million units,” Diallo said.
Turning the page on what the brand dubbed the “year of the Honda SUV,” Diallo said 2023 marks “the year of our digital and electrified transformation.”
“This year you will really see the proof points of our smart strategy as we lead into fully electrified sales,” he said.
In truth, we’re all just killing time until Afeela.
Reverse: ‘About 350 Feet’
On this day 58 years ago, stripes never looked so good.
Speaking of which, if you’ve never heard the story behind the GT350's name, it’s a good one. Courtesy OnAllCylinders:
According to Shelby, nobody could agree on any of the many names thrown about, and in one of numerous meetings held on the subject, Shelby, no doubt frustrated with corporate politics, turned to Phil Remington and asked him what the distance between the race and production shops at Shelby American was. Remington’s response was “about three hundred and fifty feet,” to which Shelby said, “That’s what we’ll call it–GT350.”
Shelby’s reasoning for such a hasty decision? “The name wouldn’t make the car, and if it is a bad car, the name won’t save it.”
A generic alphanumeric name that signified nothing also had practical applications: Shelby could upgrade and improve the car whenever it wanted without having to change the name and let the competition know what it was up to.
Neutral: Good Race This Weekend
I’m very excited for the 24 Hours of Daytona kicking off tomorrow, where we’ll get to see Cadillacs, Porsches, BMWs, and Acuras fighting for overall victory in brand-new cars. It’s the dawn of a new day in sports car racing, and I’m ready for it. Will you be watching?