Toyota’s Area 35 Plan Adds 3.5 Million EVs of Capacity by 2030

11/19/24, 2:03 PM Toyota’s Area 35 plan adds 3.
5 million EVs of capacity by 2030
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Toyota’s Area 35: The cost-saving plan to make 3.5 million EVs — or
whatever customers want
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11/19/24, 2:03 PM Toyota’s Area 35 plan adds 3.5 million EVs of capacity by 2030
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Toyota CEO Koji Sato wants to create additional capacity for up to 3.5 million EVs in 2030, possibly including a production version not about how much Elon Musk
of this sporty EV concept he is seen here unveiling last October at the Japan Mobility Show in Tokyo. (TOYOTA MOTOR CORP.) is influencing the next Trump
administration, it’s how much
By: Hans Greimel Last Updated November 15, 2024 02:00 PM Tesla benefits from it
TOKYO — In five short years, electric vehicle laggard Toyota wants to boost its global factory firepower to build
some 3.5 million EVs annually, without breaking the bank on costly new plants or being buried in heavy over-
Hyundai faces probe after
investment should demand suddenly sour.
three workers die in car test
Now, the Japanese manufacturing maestro has a creative new plan on how to do it.
Enter Toyota Motor Corp.’s Area 35 — a flexible blueprint for squeezing the carmaker’s existing global production Jaguar previews its future,
footprint for about 35 percent more floor space. ultraluxury brand identity with
Miami concept
The strategy calls for slashing the number of different parts used by 35 percent worldwide to simplify production
through fewer product variations. The streamlined parts bin will also speed product development, giving Toyota
extra bandwidth for an additional three full model changes.
Doing all this, Toyota reckons, will boost profits by 3.5 percent. Sign up and get daily highlights
from Automotive News delivered
CFO Yoichi Miyazaki unveiled Area 35 during the company’s Nov. 6 earnings announcement, in which the world’s straight to your email inbox.
biggest automaker booked a 20 percent slide in quarterly operating profit. Area 35 will enable Toyota to slim down
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its product offerings to focus on high-selling core models, while staying nimble enough to manufacture whatever
kind of powertrains are in demand.
“We are working to optimize the number of types of specifications and parts,” Miyazaki said. “We are expanding the
space for finished vehicle production and increasing development efficiency.”
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Area 35 by the numbers
Toyota’s Area 35: The cost-

saving plan to make 3.5 million
EVs — or whatever customers
want
Toyota CFO Yoichi Miyazaki outlines the Area 35 strategy in Tokyo while reporting the Japanese carmaker's first decline in
quarterly profit in two years. (SCREENSHOT FROM TOYOTA ONLINE NEWS CONFERENCE)
Toyota wants flexibility to avoid pitfall of over-investment
Toyota’s gambit addresses a quandary facing the entire auto industry as it ponders investing in EVs — how to
minimize cost and maximize flexibility in the face of fluctuating projections for EV demand. Toyota’s approach is its
answer to the pitfalls faced by such rivals as Ford Motor Co., General Motors, Volvo and Volkswagen, which
overcommitted to EV investment only to scale back plans.
Erstwhile EV cheerleader Ford, for example, said this year it would reel in spending on full electric powertrains by
25 percent. It cut two-thirds of the jobs at the Detroit-area plant building the F-150 Lightning. It killed a three-row
all-electric crossover. And the automaker said its next consumer-oriented EVs won’t reach showrooms for three
more years.
CEO Jim Farley, a former Toyota executive, called Ford’s EV odyssey “humbling.”
At GM, executives have lowered their EV outlook amid slowing sales growth and delayed investments, including the
start of electric pickup production at a second Detroit-area plant.
Volvo abandoned its pledge to sell only EVs in 2030. And Volkswagen has been forced to mull unprecedented plant
closures in Germany to save billions of euros to fund its shift to EVs.
TOYOTA_MANUFACTURING-MAIN_i.jpg Using vehicles that drive themselves down assembly lines is a strategy Toyota plans to
deploy for its next-generation EVs to save the cost of investing in fixed hangers or pits while at the same time improving
production flexibility. (TOYOTA MOTOR CORP.)
Output of 3.5 million EVs planned in 2030
Toyota is betting Area 35 will help it avoid similar detours in its EV journey.
“This allows us to adapt more effectively to changes in actual demand and make last-minute investment decisions,”
Miyazaki said, adding it lets Toyota pivot production plans more nimbly. “We are preparing to smartly build a
system that can flexibly accommodate our customers’ choices.”
Toyota wants to be able to sell 3.5 million EVs a year in 2030. Of those, some 1.7 million will ride on a new modular
EV architecture that debuts in the Lexus premium brand around 2026.
The company expects to halve production lead time and reduce equipment costs by 25 percent through
digitalization. And on its new dedicated EV lines, Toyota predicts productivity will double.
Toyota’s plan hinges on a massive overhaul of its manufacturing processes for the electric vehicle era that adopts
many new techniques of modern EV manufacturing, such as hyperautomation and gigacasting. Toyota is even
planning a new assembly process in which its EVs drive themselves down the line using radio signal-controlled
technology.
But to save money, Toyota wants to carve out space from existing facilities for the new output. And that will come
essentially by compacting current capacity into a smaller area.
“Area 35 is an initiative to create space by reducing the number of parts used for existing assets, rather than
looking to expand production space by building new plants,” a spokesman said.
TOYOTA-03_i.jpg Toyota wants to make more space in existing production sites for modern processes that employ robots and
self-propelled assembly lines to transform its EV manufacturing. (TOYOTA MOTOR CORP.)
Overhaul of 10 plants already underway
Toyota doesn’t rule out building factories, but the goal is to max out existing sites first. Also, the newly created
capacity won’t necessarily go to EVs, but the automaker is keeping it flexible for that.
Area 35 is an abbreviation of Asset Reborn & Empower All Toyota.
Toyota said its production engineers began overhauling 10 plants in Japan and overseas in August 2023 and will
gradually expand the updates to more of its 54 assembly plants worldwide. In Japan alone, the company said, the
push has already yielded 80,000 vehicles of additional annual capacity.
Toyota’s worldwide production zoomed to a record 11.2 million vehicles in the fiscal year ended March 31, including
output from Daihatsu and Hino. The company cranked up the volume to recoup lost production from the pandemic
and global semiconductor shortage.
But the breakneck pace also put a strain on overstretched suppliers and has been blamed for a series of quality
and certification scandals that have tripped up Toyota Group companies.
One outcome of Area 35, Toyota said, should also be better supply chain management.
Existing factories, such as the Motomachi plant in Toyota City pictured here, could see their current layout compacted by a third to
make room for capacity growth without new plants. (TOYOTA MOTOR CORP.)
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11/19/24, 2:03 PM Toyota’s Area 35 plan adds 3.

5 million EVs of capacity by 2030

Home Europe Canada China Hello, Geerard Collijs

German police clear protest

Daily 5 report for Nov. 18: It’s

Publishing Partner: Sponsored Content from Kerrigan Advisors

Kerrigan Advisors Represents Dallas, Texas-Based

See More in Toyota

Lexus from golfer Scottie

Lexus lowers entry price of

Area 35 by the numbers

Toyota’s Area 35: The cost-

Toyota wants flexibility to avoid pitfall of over-investment

Output of 3.5 million EVs planned in 2030

Overhaul of 10 plants already underway

Area 35 is an abbreviation of Asset Reborn & Empower All Toyota.

Publishing Partner: Lexis Nexis

LexisNexis® Report-Navigating Vehicle Owner Engagement

Toyota’s Area 35 plan by the numbers

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Copyright © 2024. Crain Communications, Inc. All Rights Reserved.

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