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Published: Monday, 12/27/2010

Electric SUV work changes Toyota strategy

NAGOYA, Japan — The much-vaunted systems used by Toyota Motor Corp. to churn out millions of vehicles are being put to one side as the automaker tries to crack a new market in the United States.

Speed has been at the fore in Toyota's joint development of an electric version of its RAV4 sport-utility vehicle with start-up manufacturer Tesla Motors Inc.

The "second-generation" RAV4 electric vehicle is to hit the U.S. market in 2012. Joint development with the seven-year-old start-up Tesla on the vehicle has given Toyota a dose of "culture shock."

The two companies used Tesla's technology for basic parts such as the battery system and motor. The performance of the battery, which usually accounts for about half of an electric vehicle's price, generally decides the electric vehicle's performance.

Toyota's decision to adopt a relative newcomer's technology for the core components of a vehicle marked a seismic shift for an automaker that since its founding had prided itself on using its own technology in new cars.

In another move that raised a few eyebrows, Toyota entrusted the joint development to the engineering staff of Toyota Technical Center USA in Michigan. In years gone by, Toyota's "common sense" would have insisted that Japanese engineers at its headquarters in Japan should be responsible for this key work.

Because Tesla's engineers wielded authority over a wide range of operations, each one could make immediate decisions on important matters. Toyota engineers did not have this luxury because their authority and job descriptions were clearly divided and comparatively limited.

While Toyota usually makes intricately detailed plans before starting development, Tesla tends to proceed with development first and correct any problems as they arise. Respecting schedules may be appropriate when developing many cars, but one should not be afraid to make mistakes when trying to achieve something more quickly, Tesla Chief Technical Officer J.B. Straubel said. That is the basis of Tesla's development philosophy.

More than half a year has passed since the joint operation was announced, and some changes are rubbing off on Toyota: It has started to expand the responsibilities of its U.S. engineers, just as Tesla does, on a trial basis. "We are learning from each other. … Hopefully we can collaborate to improve our [development] process in the future [by adopting the flexibility of Tesla]," Greg Bernas, Toyota's chief engineer for the joint vehicle development program, said.

Toyota and Tesla unveiled a prototype RAV4 electric vehicle at the 2010 Los Angeles Auto Show in November. Further tweaks will be made until the vehicle is released in 2012.



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