Toyota Exec Warns Proposed Trump Policies Could Hurt Industry, Consumers
The push by the outgoing Biden administration to convince Americans to buy more battery electric vehicles is likely to slow down to barely a budge when Donald Trump returns to the White House in January.
One of Trump's campaign themes was to roll back federal vehicle emission standards as well as tax incentives aimed at boosting production and sales of EVs.
A top Toyota executive said his company's EV plans aren't likely to pivot much in the short-term with a new political regime. Indeed, any company's EV policy shouldn't be expected to change with each change in administration.
"Every brand has invested in the EV capacity, every brand has invested in battery capacity. That stuff's coming, and we're going to have to sell it so it can help if they bring the regulations down. But I don't see all of a sudden every brand saying, hey, we're not selling EVs anymore," said David Christ, group vice president and general manager of the Toyota Division, during a meeting of the Automotive Press Association in Troy, Michigan, Tuesday.
One example Christ gave of how an automaker's plans can't turn on a dime when there's a new resident of the White House is a $14 billion battery plant Toyota is building in North Carolina to equip future battery-electric and hybrid vehicles.
So there's a certain amount of, once the direction is set, it's going," said Christ. "There obviously are decisions being made where investments are slowed or maybe some investments aren't made, but the momentum and the investments are on its way, so there will be more BEVs over the next three years."
Indeed, Christ pointed out that for Toyota the vehicle cycle is usually five to six years and its powertrains have lives of 10 to 12 years.
Another likely issue for the auto industry with the change in administration is tariffs on goods imported from China and Mexico, especially vehicles and parts.
Trump has said he wants to slap a 10% tariff on all imported items but 60% on goods imported from China.
Toyota's Christ says his company believes in "free and fair trade" and given the complexity of the automotive supply global supply chain, tariffs on imported cars and parts will be harmful to consumers, many of whom are already being priced out of the new vehicle market.
"The thing, with tariffs, it's not as much on the car as it is on the part. The global supply chain is so big and so diverse that it would be really difficult to build every part in one location. So because of that, tariffs may not affect the car because it's built in the U.S., but it might affect a lot of parts that go on the car, which thereby raises the price for the consumer."
In the case of the U.S.-made Toyota Camry, all but 90% of its parts are American-made. But adding a 10% tariff on that remaining 10% content "can meaningfully change the cost of the car."
The company's goal would be to perhaps have some discussions with the new administration and help it understand some of Trump's intended policy changes may not be helpful to the auto industry or consumers.
