In Lentz’s mind, nothing short of government regulation could force consumers to step away from sub two-dollar gasoline and nudge the EV take rate up at a reasonable clip. Continued slow growth, led by one manufacturer (Tesla), is what the future holds, he claims.
“There’s not much growth in that industry,” Lentz said, adding that some automakers might be focusing too much on the future and not on the next few years.
Indeed, Wards data shows just over 1.2 percent of new vehicles sold in the U.S. last year were battery electric vehicles. While EV sales did rise 103.7 percent in 2018, the bulk of that sales tally was taken up by Tesla. Hybrids, both regular and plug-in, still outsold EVs by more than two to one.
As the creator of the first mass-market hybrid vehicle, Toyota has expressed doubt about the rush to field fully electric vehicles before. It’s still bullish on hybrids, but has, especially in the past year or two, shown a willingness to advance its own plans for EVs. There’s now a plan to introduce 10 such models in various markets by early next decade.
Because Tesla is such a big player in America’s still niche EV market, Lentz doesn’t see it as a major competitor to his business, though he admits it could be hurting Prius sales.
“(Musk) is creating an entirely new segment of vehicles,” he said, adding that 70 percent of Tesla buyers are beholden to the brand, and wouldn’t consider a competitor’s product. “And by that, I don’t view Tesla products as luxury products. Those of us who only separate the world between luxury and non-luxury, we’re missing the point. Tesla has created this new category of a technology-driven product.”