Subaru’s been late to the electrification party, but its incoming CEO says it’s going to make up for lost time by introducing four all-new battery-electric crossover models by 2026 — all built in Japan.
Atsushi Osaki, who assumes the company’s top post in June, told investors and media during the company’s quarterly earnings call the company plans to build 400,000 EVs annually in 2028. It plans to get there by expanding its existing Oizumi plant in Japan with a dedicated EV line to produce 200,000 battery-electric models.
The remainder will come from its Yajima plant, which should hit the 200,000 mark by 2026, according to Automotive News. The four new crossovers will be offered in the U.S., Subaru’s largest market. The Japanese automaker’s goal is for 40% of its sales to be made up of EVs and hybrids by 2030.
The plan runs counter to the trend of other automakers like Hyundai, Kia, Mercedes-Benz, BMW, VinFast, Toyota, Honda and more, which are setting up production lines or building entirely new plants to produce EVs to meet the terms for $7,500 tax credits laid out in 2022’s Inflation Reduction Act.
Paddling upstream?
By building the vehicles and sourcing battery materials outside the U.S., the new Subaru models will not be eligible for the federal tax credits, officials acknowledged during the call.
“I wonder if American consumers choose their cars solely based on tax breaks,” said current CEO Tomomi Nakamura during the call. “Our U.S. customers are quality customers. We have a higher ratio of customers buying Subarus with cash, and we also have low loan and lease rates. We also keep our incentives at low levels.
“We will try not to rely only on the subsidy program.”
Nakamuri says “only” because the way the law is currently written, those who lease the vehicles — rather than buy — are currently able to qualify for the $7,500 tax credit. Right now, Subaru offers one EV in the U.S., the Solterra — a joint effort with Toyota — and one hybrid, the new Crosstrek PHEV.
Subaru is also planning to roll out a new hybrid system in 2025. It will likely be used as part of its goal to electrify its entire line-up within the next decade.
A good year for Subaru and others
The company not only revealed its plans for the new electric vehicles to come, it also reported that despite semiconductor-related production issues its operating profit for the year rose 195.7% while revenue jump 37.5%.
Subaru wasn’t only Japanese automaker enjoying strong earnings reports this week. Nissan saw its operating profit for the year jump 52% despite its global sales falling 15%. Officials also cited issues with semiconductors as a limiting factor in production and sales.
Honda, however, saw operating profit decline 3.7% due to reduced sales and higher expenses, including warranty payouts. The company’s automotive operations were harder hit, seeing a 5% drop in operating profit. However, the company is forecasting a 5.5% increase for the 2024 fiscal year.
Toyota also saw its operating income drop for 2023, moving down 9% despite an 18.4% jump in revenue. Much like its competitor, Honda, it expects to see that number turn around in 2024, rising 10%.