2023 Toyota Bz4x Limited Awd 108 1651597896

Toyota Stays Modest about EVs as It Relaunches bZ4X after Recall

  • Toyota’s bZ4X EV was subject to a recall and stop sale last year.
  • It is now on sale again, but sales expectations are modest for 2023.
  • Toyota prefers to emphasize its hybrid sales over its plans to expand its EV range.

After a recall and stop-sale derailed the launch of Toyota’s first mass-market EV last year, the company is starting over as it resumes selling the 2023 bZ4X to customers in the US. But even now that there’s a fix for the faulty wheel hub bolts and dealers have bZ4Xs in stock, expectations for this new electric vehicle are modest—as are Toyota’s broader plans for EVs in general.

During an interview last week at the Washington DC auto show, Toyota executives discussed how the bZ4X fits into the company’s broader electrification strategy. We spoke with Jason Keller, director of dealer policy and government affairs, and Rick Gezelle, senior principal engineer of regulatory affairs, about how the recall “hurt the momentum” of the bZ4X’s launch and how expectations are now being set as the car is relaunched.

Why Toyota prefers Hybrids

Toyota aims to sell just 10,000 units of the bZ4X this year, meaning it could be rarer than even the GR86 sports car, which sold nearly 12,000 units in 2022. It will also put the bZ4X significantly behind the 2022 sales performance of several of its peers. EV Competitors: Ford sold just under 40,000 Mustang Mach-Es and Volkswagen sold more than 20,000 ID.4 models, and sales of those SUVs could increase even more in 2023 due to expanded production.

Instead, Toyota emphasizes its strong hybrid sales. The company sold more than 500,000 electrified vehicles in 2022, the vast majority of which were hybrids and plug-in hybrids (the fuel cell Mirai was also included in this number, but accounted for just over 2,000 units of that total). Toyota has been clear about how it plans to prioritize hybrid production over EVs as a way to manage the limited amount of raw materials, particularly for batteries, used in building an electrified vehicle. With the same amount of material needed for a single bZ4X, Toyota says it can build 90 Prius hybrids or 60 plug-in hybrid RAV4 Primes. The company believes that maximizing hybrid sales is a better bet for reducing carbon emissions, at least given current market conditions.

Even if sales expectations are slim, Toyota admits that a renewed push to get the word out about the bZ4X is still needed after the recall and halted sales grounded the initial launch. A renewed marketing campaign will begin in May to make sure customers haven’t forgotten that the bZ4X exists. We found several hundred new bZ4X models for sale through a nationwide dealer inventory search, and a slightly lower number of the Toyota’s twin, the Subaru Solterra. While Subaru says the Solterra is available in all 50 states, Toyota describes the bZ4X on its website as “only available in select states and in extremely limited quantities.”

No more tax credit

The bZ4X also enters a different regulatory landscape than it would have launched on schedule. For one thing, it no longer qualifies for the $7500 federal tax credit. Under the old rules, Toyota ran out of time for the bZ4X to qualify because it reached the sales volume cap in July 2022 due to sales of its plug-in hybrids. Under the new parameters of the recently passed Inflation Reduction Act (IRA), the bZ4X and Solterra do not qualify for the credit because they were built in Japan, not the US.

Keller did mention another subset of the IRA for commercial vehicles that might be applicable for bZ4X customers who choose to lease. But the details surrounding this loophole remain murky — not to mention confusing for consumers. Toyota has not yet announced any plans for US EV production that could make the bZ4X—or future bZ models like the rumored bZ3X small SUV and bZ5X three-row SUV—eligible for the broader tax credit.

Recall and fix

The bZ4X initially went on sale in the spring of 2022, but in June the company announced a recall involving a flaw with the wheel hub bolts that could cause the wheels to come loose from the car. Only 258 cars were involved in the US, but those early customers were told to stop driving their cars. Toyota offered these owners an extended warranty, loaner vehicles, refunds, loan/lease credits, complimentary charges, and even started a buyback program for those who wanted to return their bZ4Xs (the company did not disclose how many of those customers chose to part not to take) ). The closely related Subaru Solterra, the bZ4X’s twin, was also affected by the recall, but Subaru had not sold any units in the US before it was announced.

It took until October for Toyota to come up with a fix, which involved replacing the hub bolts and wheels. The company began implementing the fix in late 2022 and the cars went on sale again in November, with Toyota moving 988 units of the bZ4X in the fourth quarter and Subaru selling 919 Solterras (Subaru did not provide sales targets for the Solterra in the US did not share) .

Only time will tell if this rocky launch hinders the bZ4X’s larger story, but either way, this new model tells the story of where Toyota’s priorities lie. As the industry continues to shift toward electrification, Toyota appears to be hedging its bets until it becomes clear which solution will ultimately win out.

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