Toyota ramps up EV competition with its first pure battery model

Yahoo Finance's Pras Subramanian discusses Toyota rolling out its first battery electric vehicle model.

Video transcript

DAVE BRIGGS: Surging gas prices, as you know, only fuel the demand for electric vehicles. And after years of lagging in the category, the world's biggest automaker by sales is coming for Tesla-- Toyota, whose market cap is actually less than half of Tesla's, upping their game with the BZ4X. It really rolls off the tongue, huh? Yahoo's senior autos reporter Pras Subramanian here to talk Toyota. That awesome name aside, what do we know about the car? I can't get past it. OK, I got to start there.

SEANA SMITH: It's tough.

DAVE BRIGGS: Why wouldn't you have something catchy, man? I mean, I know you're not a Toyota executive. But I'm just asking.

PRAS SUBRAMANIAN: It's just so Toyota to do something like that, right? You know--

DAVE BRIGGS: BZ4X.

PRAS SUBRAMANIAN: We're still talking about the world's largest automaker, but they're like, hey, here's our first attempt, the BZ4X, right? And it looks kind of very Toyota-ey, you know, like a RAV4. It's got 250 miles of range, 200 horsepower, nothing special. So it's kind of like this unenthusiastic effort into this space, we might say.

But it's going to start at $43,000 before incentives, so this is where Toyota operates. They can make those cheap cars people want. And for the most part, most EVs are too expensive for most Americans. So I think there might be a little space here for Toyota to kind of hop in and say, hey, not the sexiest car in the world, but one you can actually buy once on the lot.

SEANA SMITH: You're going to have to test drive this one soon, but I'm curious, what have the reviews been so far of this car?

PRAS SUBRAMANIAN: I read a couple that said it was fine, but it doesn't have a frunk, right, which is kind of a big deal for EVs, right? It doesn't have a frunk--

DAVE BRIGGS: That's the front trunk, right?

PRAS SUBRAMANIAN: Exactly, exactly.

DAVE BRIGGS: All right.

PRAS SUBRAMANIAN: It doesn't have, like, the regen braking, so it's like, drives like a car, but doesn't have some of the EV features that we're sort of hearing about that people want.

DAVE BRIGGS: The one thing that is very interesting, 90% of battery life intact after 10 years.

PRAS SUBRAMANIAN: Yeah, I read that. I was a little surprised. Usually, it's around 70, so maybe they got something going, you know?

DAVE BRIGGS: Hey, man, Toyotas do last forever.

PRAS SUBRAMANIAN: BZ4X.

DAVE BRIGGS: And we talked prior about Tesla, of course, because Tesla has twice the market cap-- more than twice, as I mentioned. But the stock has been hammered. What's going on?

PRAS SUBRAMANIAN: And it used to be a lot more, right? And it's almost down by half since hitting highs in November. And now we're talking about recent issues with Musk's big Twitter saga, right? That's sort of weighing on shares. Also, but other stuff like component shortages across the whole industry. The China shutdown, the Shanghai COVID shutdowns in China really affecting their Chinese production, right? And also, recent allegations against Musk with sexual harassment allegations, but at SpaceX. So these are the things that are kind of hurting the stock and kind of dropping the share price.

And, you know, Wall Street community not happy about it. Our friend, Dan Ives, talking about how this is an overhang, this is a clown show. Tony [INAUDIBLE] talking about how Musk might have to sell more shares to reach margin requirements if the stock goes down even more. So it's not a lot of good news here for the company. But they had a great quarter last quarter, another all-time record in sales. So it's not all bad. So we'll see what happens. But it's still, like, not a great Q2 so far for Tesla.

DAVE BRIGGS: But the fundamentals are still the same with the company, right?

PRAS SUBRAMANIAN: Exactly right. They've been able to persevere through Q1. That was tough on the manufacturers. So they've done that. And so there's some positive momentum going into Q2, yeah.

SEANA SMITH: Yeah, and it's also going to be interesting just to see the lockdowns in China, how big of an effect that will have on Tesla, because we know Tesla-- we know China is so critical in terms of the future growth of Tesla. So if those lockdowns continue, that could also be a real heavy [INAUDIBLE].

PRAS SUBRAMANIAN: Yeah, a month of sales or month of production might be gone from April.

DAVE BRIGGS: Zero COVID policy, they're not shying away from it. Pras, good to see you, my friend. Thank you.