Toyota and Subaru shares fall on ‘shameful’ recalls of early electric vehicles

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

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

subaru corporation (7270.T)in which Toyota has a nearly 20% stake, also said it was recalling some 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 major components with the bZ4X.

The recall adds to woes at Toyota, which has been forced to cut production frequently this year due to global chip shortages and other supply issues, and faces pressure from investors over its slowness to adopt vehicles. battery electric vehicles (BEV).

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

But “it was not an indictment against the new electric vehicle system,” he added, because the problem was simple mechanical and unlikely to be an expensive fix.

Japan’s safety regulator said sharp turns and heavy braking could cause a hub bolt to loosen, increasing the risk of a wheel coming off the vehicle. He said he was not aware of any accidents caused by the defect.

The problem was discovered after people in the United States drove the cars, said an official with Japan’s transportation ministry, who declined to be identified because of the sensitivity of the matter.

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

Spokespeople for Toyota and Subaru said the companies had not yet decided how soon they could fix the problem and proceed with the rollout, because the cause had not yet been determined.

Toyota said Thursday that not all cars of this model were subject to the recall, but declined to say how many it had built in total.

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

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

The company has repeatedly pushed back against the criticism, arguing the need to offer a variety of powertrains to suit 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 quoted Toyota’s boss as saying automakers couldn’t back 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 home market than electric vehicles, which accounted for just 1% of passenger cars sold in Japan last year, according to industry data.

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Tokyo office reports; Edited by Sam Holmes and Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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