Toyota Motor Corp, the world’s largest motor car maker, reluctantly released an electric vehicle in May. Weeks later, it recalled 2,700 of them because there was a risk that their wheels—the most fundamental component—would fall off. If this level of quality and safety is found to be ready to commit to the traditional auto giant, then investors and regulators should increase their scrutiny.
It’s one thing to fix it on battery tech and an electric motor, but getting the wheels bolted on properly is a problem? This shouldn’t even be a question. Billions of dollars have been invested, big promises have been made, and every major carmaker in the world has committed to going electric and clean. Not only this, cars are being sold at record high prices.
Toyota’s statement was shocking. “After low-mileage use, all hub bolts on the wheel may loosen to the point where the wheel may detach from the vehicle. If a wheel detaches from the vehicle while driving, this can result in loss of vehicle control. which may increase the risk of an accident,” the company said, recalling its first electric car release. Long a leading technology in hybrid or gasoline-electric, the Japanese firm is dragging its feet on electric vehicles (EVs), even as competitors such as Volkswagen AG have been ahead. Toyota president Akio Toyoda has been highly around green cars in the past. Commented on the hype and pointed out the downsides.
Meanwhile, Subaru, in which Toyota holds a 20% stake, also recalled the Solterra, a related electric vehicle model jointly developed that shares parts with the latter’s bZ4x.
Recalls are par for the course in the auto industry—millions of vehicles are affected each year. Last year, more than 21 million were accounted for in recalls mandated by the US National Highway Traffic Safety Administration, according to third-party data provider Recall Master. In addition, several million more are part of so-called voluntary campaigns that are not formally recognized by the authority.
Most recalls in conventional cars now are about defects or issues with electronics and software, or components such as lights and wiring. That doesn’t mean engines don’t fire – they do.
This year, for example, Ford Motor Co. withdrew thousands of its models because vehicles could catch fire while they were parked and locked. The US car company told drivers to park their cars outside while they are working on a solution. Hyundai Motor Company announced a manufacturing defect that would lead to a fire a few years ago.
This is just for internal combustion engine (ICE) vehicles that have been in production for decades. EVs, on the other hand, are a new breed – many models are still concepts and are barely mass-produced. This means that the more that is created, the more problems will arise. In the past two years alone, thousands of recalls have been made at a cost of billions of dollars.
What’s more, fires in electric cars are far worse and more difficult to burn than traditional ICE automobiles because of a process called thermal runaway, where flames are accelerated through chain reactions. General Motors recalled all 142,000 of its electric bolts sold because of the risk of the battery – which is at the core of the car – igniting. With a market capitalization of $75 billion, LG Energy Solutions made the fire-powered battery the most expensive of the green vehicles.
The point is that these are no mere recollections: they are very serious, and, most worryingly, basic engineering problems. An engine that can combust or tires loose and rolling undermines consumer confidence. Manufacturers of such vehicles say that they are solving this problem. But then what?
These are not rag-tag upstarts trying to displace industry functionaries. Rather, it is publicly listed corporate giants such as LG, General Motors, Toyota and their peers. While many of these vehicles are not yet being produced, and so far there have been only limited injuries, the fact is that these cars can actually be on the road – and are as reliable as they are a large well-established car. Company – Should raise alarm.
Given the climate crisis, lawmakers, investors and firms are pushing for all-electric vehicles. But it seems we have lost sight of security. In the rush to go green and check the ESG norms, the responsibility is being shifted. The truth is, if investors withdraw their support or significant shareholders start asking tough questions, manufacturers will have to take more care. Regulators also have to play their part by setting high standards and testing before each model is released. Only then will automakers put consumer safety at the top of their list, not the next self-propelled vehicle.
Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia.