Time for a Change

As this is January, a time for resolutions, there is one resolution that everyone in this industry ought to be making—like it or not.

The resolution is about change.

All of us (myself included, so don’t think this is some sort of pontification from on high) have a tendency to resist change. This probably has as much to do with habit—you continue to do something and get fairly proficient at it, so you do it again—as it does with the fact that different is not only different—as in strange—but it is hard to embrace. Just consider how difficult it is for some people to follow their dentists’ recommendation to floss on a regular basis. If this is something you haven’t been doing it is something that is hard, even though it is merely a matter of moving a thread between one’s incisors.

When you’re talking change of a more massive scope, then you have a real problem. Consequently, I think the resolution that we need to make is not only to embrace change, but to, in some cases, drive it forward.

This came to mind in late November when it was announced that Akio Toyoda—the president of the company that bears his family’s name (with a consonant change, however)—is going to be heading up Toyota’s new Electric Car Division.

Certainly, the Toyota Prius has become synonymous with hybrid. Toyota changed its under-the-hood approach from one that was wholly based on combustion to one that added electrification. It seemed absolutely whacky at the time. But Toyota persevered and expanded the hybrid portfolio among an array of Toyota and Lexus products.

When the Toyota Mirai—the hydrogen-fueled, fuel cell sedan—had its global reveal in November 2014, Takeshi Uchiyamada, Chairman of the Board, Toyota Motor Corporation, said, “When compared to drive batteries, the rate of cost reduction in fuel cells has been rapid over the last 10 years. We believe this trend will continue and that FCV [fuel cell vehicle] costs will decline faster than BEVs [battery electric vehicles] for about the next decade. We see the Toyota Fuel Cell System in the new Mirai as simply a better battery. Functionally, the system works like a battery that is constantly being charged by the introduction of hydrogen and oxygen. It has a cathode and an anode, just like a battery.

The stack makes electricity on-demand to power the electric motor. In the process, it transforms about 10 pounds of hydrogen into about 10 gallons of zero-emission water vapor. If we were to build a current-technology Lithium battery pack capable of powering the Mirai 300 miles it would be much larger in size and weight than the Mirai’s fuel cell stack and hydrogen tanks and require hours instead of minutes to recharge.”

Toyota is not giving up on the Mirai. Not giving up on hydrogen fuel.

But there seems to be a recognition that things are changing rapidly in the auto industry, and so while it would be easy to simply keep on creating things like the Prius, they’re going to not only do that, but pivot toward full electrification. (And speaking of the Prius, Koji Toyoshima, the Prius chief engineer, who some of you will recall we had on the cover of our November 2016 issue, has been named the chief engineer of the electric initiative.)

One could make the argument that this is merely an extension of what Toyota has been doing since it started work on the Prius in the latter half of the 1990s: figuring out how to use electricity to turn wheels. And further, a Mirai is an electric vehicle that has a fuel nozzle opening instead of a plug receptacle.

But one—as in me—will make the argument that few companies have the willingness to embrace change in the way that Toyota is doing. Here is one of the biggest automakers in the world (as this is being written before the books are closed on 2016 I don’t know if Toyota or VW will finish as the world’s largest car company), the most valuable automotive brand in the world (according to Interbrand), a company that could probably coast on a considerable amount of inertia were it so inclined, and they’re making a shift.

This is not to say, imply or even think that Elon Musk is going to start having sleepless nights because Toyota is now pursuing EVs (as some of you will recall, the RAV4 EV uses batteries built by . . . Tesla). I don’t imagine that there is going to be an electric Camry anytime soon.

But what I do know is that companies and the people that are willing to make the adjustments, the additions, the recalibrations, the straight-up changes even though they don’t necessarily have to are going to be the winners.

Make that resolution.