Toyota, Subaru shares plummet amid “embarrassing” recalls of first EVs

TOKYO, June 24 (Reuters) – Toyota Motor (7203.T) shares fell after it recalled some of its first mass-made all-electric cars, launched two months ago, over a risk of wheels coming loose, a setback to its ambitions to electrify its model range.

Toyota, the world’s largest automaker by sales, said Thursday it would recall 2,700 bZ4X SUVs worldwide.

Subaru Corp. (7270.T), in which Toyota has a nearly 20% stake, also said it is recalling about 2,600 units of the Solterra, a related model.

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The Solterra, Subaru’s first all-electric vehicle, was co-developed with Toyota and shares key components with the bZ4X.

The recall adds to concerns at Toyota, which this year has been forced to cut production regularly due to the global chip shortage and other supply issues and is under pressure from investors for its slowness in adopting battery electric vehicles (BEVs).

“It’s embarrassing,” said Christopher Richter, an analyst at CLSA. “People have waited so long for Toyota to get an electric car on the mass market… and just a few weeks after they put it on the market, there is a recall.”

But it “wasn’t an indictment of the new electric vehicle system,” he added, as it was a simple mechanical problem and was unlikely to be expensive to repair.

The Japanese safety authority said sharp turns and sudden braking could cause a hub bolt to loosen, increasing the risk of a wheel coming loose from the vehicle. He says he is not aware of any accidents caused by the defect.

The problem was discovered after people in the United States drove the cars, said a Japanese transportation ministry official, who declined to be named due to the sensitivity of the case.

Toyota had reported that one car in particular had been treated roughly. “We don’t know who the driver was, but the driver was driving the car very hard,” the official said, adding that Toyota had found the problem, which affected only a few cars.

Spokespersons for Toyota and Subaru said the companies had not yet decided how quickly to resolve the issue and proceed with the rollout, as the cause had not yet been determined.

Toyota said Thursday that not every car of this model was being recalled, but declined to say how many in total had been built.

Subaru shares, which fell nearly 5% on Friday, closed 2.8% lower. Shares of Toyota closed 0.7% lower.

Once a favorite with environmentalists for its popular hybrid Prius model, Toyota has come under fire for not acting fast enough to phase out gasoline cars and for its climate policy lobby.

The company has repeatedly resisted the criticism, arguing that it needed to offer a variety of powertrains for different markets and customers. read more

Japan changed a key policy document to show its support for hybrids was on par with BEVs after a lawmaker told Toyota’s chief that automakers could not support a government that rejected the technology popularized by the Prius, Reuters reported on Friday. . read more

Gasoline-electric hybrid models remain much more popular in Toyota’s domestic market than EVs, which accounted for just 1% of passenger car sales in Japan last year, according to industry data.

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Reporting by Tokyo bureau; Editing by Sam Holmes and Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

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