Published on November 8th, 2020 |
by Johnna Crider
November 8th, 2020 by Johnna Crider
During its latest earnings call, Toyota’s president, Akio Toyoda, had some thoughts about Tesla. He was hesitant, but in the end, he shared his opinion. “I am hesitant to say this — Tesla’s business, if you want to use the analogy, is like that of a kitchen and a chef,” he said. “They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying ‘Our recipe is going to become the standard of the world in the future!’ At Toyota, we have a real kitchen and a real chef too and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already.”
Toyoda also pointed out that Toyota makes and sells a much higher volume and variety of cars than Tesla and referred to the 100 million Toyota vehicles that are on the road today. Taking another shot at Tesla, Toyoda called his company’s offerings a “full menu lineup,” which refers to Toyota’s mix of fossil fuel, hybrid, battery electric, and fuel cell vehicles.
Comparing Cars To The Restaurant Industry Is Laughable
My first job was working as a banquet server and a busser in a casino restaurant. From there, I’ve worked a few other restaurant-related jobs, including a pizzeria in Atlanta. One thing about the restaurant industry is that everyone has their tastes and food is an industry that will survive almost any type of disaster. During the pandemic, many mom & pop restaurants closed, but chains and franchises are thriving.
This is why comparing a dying industry with a thriving one is silly. By dying, I mean companies that specialize in selling fossil fuel products — companies such as Toyota. Sure, there are customers who are picky about what they eat or consume, but the idea that customers want only what they’ve been eating, as his statement implies, is silly.
If Tesla’s business plan was similar to that of Toyota’s, his metaphor could make sense — but it’s not. Tesla doesn’t even have the same values or goals as Toyota.
What Do Tesla & Toyota Want?
According to Toyota’s customer service help site, Toyota’s mission statement is “To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America.” And its vision statement is “To be the most successful and respected car company in America.” Its global vision, according to its website, is to “lead the future mobility society, enriching lives around the world with the safest and most responsible ways of moving people.”
Now, there is nothing wrong with wanting to be the best, wanting to attract customers, and wanting to be the most successful. However, this is not Tesla’s mission, and Toyoda is comparing Tesla to his own company while not even considering Tesla’s values or its own business plans. He’s basically judging Tesla as “not a real business” and using his own company’s success over many decades to justify his reasoning. If Tesla was bankrupt, not selling any products, or just messing around, sure, he’d have a point. But this is not the case for Tesla.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. Tesla was founded to solve a problem. That problem is contributing toward the warming of our climate via emissions from our vehicles on the roads. Tesla was founded by a group of engineers who believed that you don’t have to compromise to drive electric. They also believed that electric vehicles can be better, quicker, and more fun to drive than ICE vehicles.
Elon Musk laid out a Master Plan (two of them, actually) aimed at making mass-market electric cars in the end and accelerating the transition to sustainable transport and energy. Looking back 17 years since the company was first started, one can see why Toyoda is taking shots at Tesla, but it’s premature and basically irrelevant.
Yes, Tesla is still new compared to legacy automakers. And yes, Tesla may not have that many vehicles on the road today as compared with Toyota. This is true. Quantity, however, does not always beat quality. Toyota may sell millions of cars each year, but Toyota’s cars are not solving the problem that Tesla is trying to solve. Toyota does, in fact, make a few EVs, but again, these EVs are a response to the demand for EVs, not a response to the problem at hand.
Comparing A Cat With An Orange Makes No Sense
Let’s say Tesla is an orange and Toyota is a cat. Cats are cool, cute, and funny. Oranges are food — you can eat them, make them into a juice and drink that, or even throw one at someone. You could throw a cat, too, but that would be cruel. The point is that these two things are completely different, and Toyoda is looking at Tesla through the lens of just one of its products.
Tesla isn’t just an automaker. Tesla, as Elon Musk has stated a few times, is more along the lines of a group of technology startups, “many of which have little to no correlation with traditional automotive companies.” Toyota is a traditional auto company. Tesla is not. Comparing the two is like comparing a cat with an orange and being mad at the orange for not purring when you rub it and thus deeming it invaluable or not a real thing because it doesn’t do what you would expect a cat to do.
Let’s compare a few products between the two companies just to further explain what I mean. Toyota makes automobiles. Toyota also makes materials handling equipment and textile machinery. Materials handling equipment includes lift trucks and other materials handling equipment that is related to transportation, sorting goods, and even storage. Textile machinery refers to things like Sakichi Toyoda’s automatic loom, which he invented, as well as spinning machinery and weaving machinery.
These are great products and they have their own value, but they are not the same as Tesla’s products. The only product Toyota and Tesla have in common are electric vehicles. Tesla’s other products include batteries of various sizes and purposes, solar panels, solar roof tiles, insurance, Tesla’s FSD chip, and Autopilot.
Although Tesla isn’t mining lithium to sell to the market as a normal miner would, Tesla is also starting to mine lithium for its batteries. The point is that these are two very different companies with very different goals, and for each one, a different business plan applies.
Saying that Tesla doesn’t have a “real business” because Tesla’s not doing the exact same thing Toyota is doing is illogical and shows that Toyoda hasn’t done proper research on Tesla. Tesla isn’t trading recipes, as Toyoda claimed. Tesla’s redesigning the entire meal plan with the goal of empowering sustainability.
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