2024 Volume 16 Issue 1 Pages 35-50
As Toyota Motor Corporation (Toyota) pushes forward with its multi-pathway strategy, it is also fully committed to battery electric vehicles (BEVs) and has set a goal of creating a system to produce 1.5 million BEVs by 2026 and 3.5 million by 2030. In China, the competition to lower the price of BEVs is intensifying, and BYD and other Chinese automakers are accelerating their expansion into Southeast Asia. Also, in terms of software-defined vehicle (SDV) level, which is a major component of performance, Toyota lags far behind Tesla and Chinese automakers. It is worrisome that Toyota spends less on research and development (R&D) than Tesla and BYD. While Toyota was late to the EV shift by failing to demonstrate superior dynamic managerial capabilities (DMC), its strong ordinary capabilities (OC) allowed it to continue to perform well and “buy time” while at the same time “eraning funds” for future BEV development. Toyota’s problems are likely to be concentrated in the dynamic resource capabilities (DRC), including the need to allocate further resources to R&D expenses and a development schedule that does not leave enough room. This realization was made possible by the utility of the OC/DMC framework, which can be broken down into four categories and list a company’s capabilities. The challenges for the product are how to compensate for the delay in the SDV level and whether it can achieve the cost that can compete with BYD. If the development of all-solid-state batteries proceeds successfully, there is a possibility that these issues can be improved to a considerable degree. These insights were gained through the application of DMC theories, such as the modified Christensen model and the four types of new entry strategies.
