Toyota President Akio Toyoda on Friday said Tesla Inc deserves its success in electric vehicles (EVs), but politely noted the American company's huge market cap of $408 billion is undeserved.
During a Toyota Motors earnings call Friday, Toyoda wryly observed Tesla's market cap was larger than of all seven Japanese automakers combined. Among the top three carmakers, Toyota's own market cap stood at $218 billion Friday. Honda Motor Company's market cap came to $47.8 billion while Nissan Motor Company's was $15.7 billion.
Toyoda pointed out Tesla's market cap neither reflects that of a "real world" business nor can it be compared to Toyota's massive manufacturing output and sales.
As an analogy, Toyoda compared Tesla's and Toyota's businesses to restaurants, He said Tesla's restaurant only promotes its recipes. On the other hand, Toyota's restaurant already serves a huge number of customers.
"I am hesitant to say this," said Toyoda. "Tesla's business, if you want to use the analogy, is like that of a kitchen and a chef."
"They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying 'Our recipe is going to become the standard of the world in the future!' At Toyota, we have a real kitchen and a real chef too, and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already."
Toyoda pointed out his company makes and sells a much higher volume and variety of cars than does Tesla, which is hardly surprising since Toyota was the world's second-largest carmaker in 2019 after the Volkswagen Group.
Toyota sold 10.5 million conventional and electric cars in 2019 to add to the 100 million Toyota vehicles worldwide. Toyota expects to sell a lower number of 7.5 million vehicles during its 2021 fiscal year that began last April 1.
In contrast, Tesla expects to sell 500,000 EVs in 2020.
Toyoda said Toyota offers a "full menu lineup." By this, he referred to Toyota's mix of the internal combustion engine, hybrid, pure battery-electric, and fuel cell electric vehicles.
It's often overlooked that Toyota popularized hybrid electric vehicles with its Prius line in 1997 or six years before Tesla was born. It also made limited numbers of the RAV-4 battery electric vehicle.
For the fiscal year ending in March 2021, Toyota expects to sell some 7.5 million vehicles and generate an operating profit of $12.6 billion (¥1.3 trillion) compared to the previous estimate of $4.8 billion (¥500 billion).
