Subaru and Toyota Collaborate on 3 New Electric SUVs, Citing ‘Huge Risk’ of Solo EVs

Subaru and Toyota are expanding their partnership to produce three new electric SUVs, with Subaru's CEO citing the ‘huge risk’ of developing EVs independently.

Subaru Partners with Toyota to Reduce Risks in EV Development, Targets 50% EV Sales by 2030

Subaru's CEO, Atsushi Osaki, emphasized the importance of this partnership, stating that working with Toyota will mitigate the "huge risk" of developing EVs independently. "There is a huge risk for us to go it alone in this field," Osaki remarked during a conference on May 13.

According to Electrek, Subaru reported a 75% increase in operating earnings this fiscal year. Despite this growth, Osaki acknowledged the uncertainty surrounding the future of EVs, noting that predicting the market's trajectory remains challenging. Last year, Subaru sold only 14,000 units of its sole all-electric vehicle, the Solterra, with 8,872 units sold in the United States.

In 2023, fully electric vehicles represented just 1.6% of Subaru's global sales, totaling 852,000 vehicles. To address declining EV sales in the critical US market, Subaru introduced a new strategy. Under Osaki's leadership, who took over in April, Subaru aims for EVs to comprise 50% of its sales by 2030, equating to approximately 600,000 units. This target marks a substantial increase from the previous goal of 40% combined hybrid and EV sales.

Subaru plans to release four fully electric SUVs, including the Solterra, by the end of 2026. By the end of 2028, Subaru intends to introduce an additional four EVs, bringing the total to eight. The company aims to sell 400,000 EVs in the United States by 2028, a dramatic increase of over 4,400% compared to last year's Solterra sales.

Subaru and Toyota to Co-Design EVs, Leverage Joint Development to Mitigate Risks and Boost Production

The Subaru Solterra is currently produced at Toyota's facility in Japan. However, Osaki revealed that the three additional EVs will be co-designed and manufactured with Toyota. Although Toyota owns 20% of Subaru, this partnership is expected to reduce Subaru's risk as it transitions to electric vehicles. "We spoke with Toyota and agreed that it is better to reduce risks through joint development," Osaki explained (via Automotive News).

Osaki also expressed skepticism about producing electric vehicles independently for the US market, stating, "I have not said that we would do BEV production at our own plant in the US." He emphasized the need to carefully study the market's significant changes before proceeding. With Toyota manufacturing its EVs locally, Subaru will benefit from the government EV tax credit, potentially boosting demand.

Subaru also plans to expand its hybrid offerings. "While we have steered toward EVs, we find it important to sell internal combustion products at the same time," Osaki said. One of the three new EVs will be manufactured at Subaru's Yajima factory in Japan for both automakers, while Toyota will produce one in the United States for both companies.

Toyota is set to build Subaru's first three-row electric SUV in Kentucky in 2025, shortly after introducing its own larger SUV. Additionally, Subaru plans to commence in-house EV production in Japan in 2025, with an annual capacity of approximately 200,000 vehicles. By 2027, Subaru aims to construct dedicated EV production lines, adding 200,000 cars to its capacity.

Photo: Ryunosuke Kikuno/Unsplash