The “big brother” is beaten by the “little brother”, why can’t Toyota beat Tesla?

Musk firmly stands on the side of lithium-ion batteries, believing that fuel cells are not a viable direction for the future development of new energy vehicles. His reason is simple: hydrogen fuel cells are very complex in structure, hydrogen tanks are prone to accidents, and their endurance is unstable. Hydrogen is more suitable for rocket fuel rather than car fuel.

Toyota was not to be outdone, with one of its chief R&D experts declaring that “Tesla is not suitable for the mass market.”[1]
 

From commercial flattery to commercial trampling, the disagreement between Tesla and Toyota does seem to be due to one's own faults, but in fact, the development of fuel cells does face several difficulties: the cost of hydrogen is too high, the industrial chain is imperfect, and supporting facilities are lacking.
 

In 2019, Tesla ranked first in global sales of new energy passenger cars with 367,800 units, while Toyota's promising hydrogen fuel cell passenger car Mirai had cumulative sales of only more than 10,000 units.
 

Toyota also uses hydrogen fuel to develop a manned lunar rover. Wan Gang, vice chairman of the National Committee of the Chinese People's Political Consultative Conference and chairman of the China Association for Science and Technology, once said that the industry has reached a future vision of short-distance pure electric and long-distance hydrogen fuel vehicles.

In summary: Although the prospects for hydrogen are good, the reality is bleak.

04. Why can’t we beat Tesla?

In 2019, Toyota is still the No. 1 fuel vehicle in the world, but it has to face an extremely embarrassing industry situation:
 

In the global automotive industry's century-long change, it fell behind in the first wave of industrialization from fuel vehicles to new energy vehicles.
 

This big wave is pure electrification. The initiator is Tesla, which almost no one was optimistic about in the early days. As a startup, Tesla started from scratch. Compared with giants such as Toyota, Volkswagen, and General Motors, it has no money, no people, and no resources. But it also has a natural advantage: no baggage.

Tesla was founded in 2003, released its first car product Roadster in 2008, delivered Model X in 2015, and Model 3 in 2017. It has survived financial crises and production capacity hell. Now it has become the leader in pure electric vehicles. It ranks first in the global market share of new energy passenger vehicles. In the first half of 2020, its market share reached 18.8%.

Toyota only slowly launched the C-HR and C-HR EV versions this year.

The pure electric car industry was tested but only briefly. The hybrid car industry was ignored by the world. The hydrogen energy industry was betting but the future was far away. Among them, Tesla was also desperate.

Tesla is known as the Apple of new energy vehicles. Just like the emergence of Apple smartphones defeated Nokia, Tesla did not compete head-on with fuel vehicle technology, but changed the dimension of competition.

The key to Tesla surpassing Toyota lies in: using hard-core technology to change lanes and overtake.

Toyota has a 90% share of the global hybrid market, and its position is unshakable. Tesla does not want to fight back with a weak opponent, and took advantage of Toyota's slow development of pure electric vehicles to quickly enter the race and seize market share. Tesla has carved out a bloody path for the pure electric industrialization that was not favored by everyone at the beginning.

Moreover, this competition is an all-round competition of software and hardware.
 

Tesla claims to achieve the basic functions of L5 autonomous driving this year. Toyota can only launch truly road-legal autonomous driving this year, which is obviously one step behind Tesla. Nikkei said that Tesla's FSD chip released in 2019 can be popularized as early as 2025, so Tesla is already six years ahead of its competitors in the application of electronic platform design.
 

In Toyota's eyes, Tesla's configuration is too crude to describe, the doors are not properly installed and leak, and Toyota has enough shortcomings to complain about it 10,000 times. However, it chose to change the dimension and direction of competition. It did not compete with Toyota for hybrid, but took a different approach.
 

If you can’t beat the hybrid king, then become the pure electric king.
 

The competition between Toyota and Tesla is a bit tragic. Toyota is not weak, it's just that the times have changed.