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Toyota President Goes After Tesla With Cooking Analogy

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Akio Toyoda at 2020 CES
Photo: Toyota

Toyota president Akio Toyoda make a few unusually direct comments at competitor Tesla earlier this month, likening the company to a restaurant without a “real kitchen and a real chef.”

The comments were made during a Toyota Motors earnings call, during which executives answered questions about how they planned to compete in the expanding electric vehicle market. Tesla’s market valuation was brought up — at over $400 billion, it’s about twice that of Toyota’s. But according to its CEO, that doesn’t tell the whole story.

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“What we have and what Tesla doesn’t have is the units in operation — more than 100 million vehicles out in the world,” Toyoda said before launching into the cooking analogy.

“Tesla’s business, if I can say…you can use analogy of kitchen and a chef, I think,” he continued. “The kitchen and the chef, they have not created a real business yet or a real world yet, but they’re trying to trade the recipes. And the chef is saying that, ‘Well, our recipe is going to become the standard of the world in the future.’ I think that is the kind of business they have.”

Meanwhile, Toyoda says, the Japanese automaker has a proper restaurant with a “full menu” ranging from gas-powered cars and hybrids to battery-electrics and fuel cell vehicles. However, Toyota hadn’t fully committed to battery-electric vehicles until last year and is now racing to catch up on that front, teaming up with Tesla rival BYD Automobile in China.

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In 2019, Tesla sold 367,500 vehicles, a small fraction of the 10.74 million vehicles that Toyota sold over the same period. But Tesla is ahead of Toyota in the electric vehicle market, and Toyota only plans to sell half a million battery-electrics by 2025. If customer habits change quickly, Tesla would be well positioned to continue dominating the electric vehicle market.

Still, Toyota managed to double its full-year profit outlook to 1.3 trillion yen, or about $12.6 billion, and topped 10 million global sales in 2019. Meanwhile, Tesla has yet to turn in an annual profit. Its valuation is largely based on the expectation that the electric vehicle market will eventually become the vehicle market. By at the rate automakers are electrifying their product lines, by the time that happens, Tesla may no longer be a leader in the electric market.

“They aren’t really making something that’s real, people are just buying the recipe. We have the kitchen and chef, and we make real food,” Toyoda said of Tesla, expanding on the cooking analogy. “And of course, in looking at the current share price, we are losing against their valuation,” he said. “But when it comes to products, we have a full menu that will be chosen by customers.”