Subaru will double the number of EVs in its line-up, the automaker’s new CEO says, with a target of getting eight all-electric models in production by 2028 to generate half its U.S. sales.
The Japanese automaker has long been an EV skeptic but has changed directions as more buyers in the U.S. and other markets begin plugging into battery power. It’s also motivated by new regulations pushing for a shift away from traditional gas-powered vehicles.
Looking for help, Subaru turned to Toyota which has been a longtime EV skeptic as well. The two already market a jointly developed battery-electric SUV, sold as both the Subaru Solterra and Toyota bZ4X. And, as TheDetroitBureau.com reported last week, they now are developing a larger, three-row EV set to reach market shortly after mid-decade.
Shifting directions
“The U.S. market is shifting to electrification at a rapid clip, and the situation has changed considerably in just the past few months,” said Atsushi Osaki, who recently became Subaru’s new CEO.
The change in direction at Subaru directly parallels what has happed at Toyota, where the more EV-focused Koji Sato took over as CEO earlier this year from Akio Toyoda, an EV skeptic. In June, Osaki replaced Tomomi Nakamura as Subaru chief executive. Nakamura was also reluctant to invest heavily in pure electric models.
Under the automaker’s old plan, battery-electric vehicles were expected to account for 400,000 sales worldwide by 2028. Under Osaki, Subaru is targeting that number in the U.S. alone. Worldwide, Osaki expects EVs will make up half of the 1.2 million vehicles it expects to sell by 2030.
A slow start
Subaru has been slow to embrace electrification, only launching its first conventional hybrid, a version of the Crosstrek, in 2014. It followed with a plug in version five years later.
Last year, it took the next step, with its first all-electric model, the Solterra. It played lead in developing the drivetrain technology, Toyota overseeing manufacturing.
The two will partner up, again, with a three-row SUV that Toyota will market as the bZ5X. The name of the Subaru model has not yet been released. And neither automaker has discussed what roles each are playing in the project.
Both models are expected to be in production by 2025, according to Automotive News, which quoted “people with knowledge of the plan.”
U.S. production likely
The bZ4X and Solterra are produced in Japan, at the bigger automaker’s Motomachi plant. But the three-row is expected to shift to U.S. production at the new EV plant Toyota is setting up. And that could be the direction new Subaru CEO may take with other EVs to follow, based on comments he made last week in Japan.
“In light of the speed of the EV shift in the U.S., we think it is the time to decide on BEV production in the U.S.,” he said.
Beyond the bZ5X, Subaru has several possible options. It could use its assembly plant in Indiana, or find an alternative production site in the States.
EV tax credits
Producing EVs in the U.S. could make it possible to take advantage of the $7,500 tax credits approved under the Inflation Reduction Act signed into law last year by President Joe Biden. But it also requires local sourcing of an EV’s batteries and the raw materials used in its cells.
As with the bZ4X and Solterra, it’s expected that the batteries for the new three-row EVs would be supplied by Toyota — which is setting up its first U.S. battery plant in Liberty, North Carolina.
Last month, Subaru announced it is talking with Panasonic Corp., one of the world’s largest suppliers of lithium-ion batteries — and a partner with Tesla. If they reach an agreement, Panasonic could supply batteries to future Subaru models.
An ongoing partnership
Whether Subaru will continue to work with Toyota on any of the six other EV models it plans to launch by 2028 was not disclosed. But the two have worked together on a number of projects. For the 2022 model year they launched new versions of two jointly developed sports cars, the Subaru BRZ and the Toyota GR86. Toyota holds a 20% stake in the smaller manufacturer, with Subaru having a 0.3% stake in the industry giant.