What Toyota, Subaru And Mazda Aren’t Telling Us About Their Future Powertrains

Earlier this week, Toyota, Subaru and Mazda hosted a “Multipathway Workshop,” where they introduced a plan to extend the life of combustion engines. The plan includes co-developing a new set of engines powered by synthetic fuels and working backward to fit them into cars natively designed for electric powertrains. But Toyota and its allies left several issues unaddressed, including development timelines, costs and emissions.

This kicks off the Friday edition of Critical Materials, your daily round-up of news and events shaping the future of mobility. Today, we’re also shedding light on Tesla’s plans to roll out its Full Self Driving (Supervised) feature in China and how Ford and General Motors have contrasting views on hybrids. Hybrid sales have skyrocketed in recent months, and are viewed as the interim solution as automakers prepare for a fully electric future.

30%: What Toyota, Subaru and Mazda Didn't Tell Us 

This past Tuesday, the CEOs of Toyota, Subaru and Mazda walked on stage at a conference in Japan wearing colorful suits and ties. They stood in front of a handful of under-development combustion engines and spoke in detail about the history of ICE powertrains, and how each of their brands had mastered it in different ways.

According to Toyota, the future of cars doesn’t just involve EVs and hybrids, but also combustion engines that burn synthetic fuels.

Toyota claims to be working on new four-cylinder engines that would “efficiently use diverse fuels” in the future. Similarly, Mazda said that it would re-package its rotary engine for different needs, whereas Subaru promised to make its signature boxer engines compatible with biofuel and liquid hydrogen.

What the automakers didn’t tell us was how capital-intensive this approach would be and what the efficiency gains would look like.

Here’s an excerpt from Automotive News this morning:

But the presentation, led by Toyota, left plenty of questions unanswered. Time frames, costs, investment figures, efficiency gains, plans for corporate synergies—a whole range of concrete details—were left fuzzy or simply not addressed.

Toyota acknowledges the [life cycle emissions] assessment differs by region. In countries such as France that rely on nuclear power or in countries using renewables, for example, EVs can account for fewer emissions.

But what about on a global basis? How far down the supply line of life-cycle assessment should the calculation go? Subaru focused on its hybrid boxer engine project, something it already announced that enters production this fall. But he offered little new insight into its future evolution.

Mazda CEO Masahiro Moro said his company will develop future versions of its trademark rotary engine to run on carbon-neutral fuels and combine with electrified hybrid setups. But that too was something the company has already outlined.

Despite this being a collaborative presentation, the CEOs made it clear that the strategy doesn’t involve joint development, shared procurement or technology tie-ups. Not yet, at least.

They were clear that the new engines would kickstart a new era of super compact units that could be installed into cars natively designed for batteries and electric motors. That's a bold claim, and we’ll see how that turns out.

It’s worth noting that Toyota has been fiercely lobbying with governments across the world to delay the transition to an electric future, and it has largely succeeded. Environment groups have slammed the automaker on multiple occasions for its behavior.

Whether the use of synthetic fuels is another excuse to keep planet-harming combustion engines alive or a genuine innovation that would help flatten emissions remains to be seen.

60%: Tesla Prepares To Register FSD Software In China

Elon Musk has vowed to pivot Tesla towards artificial intelligence, autonomous driving and robotaxis. However, China has been excluded from these advancements, as Tesla China employees have not been able to internally test FSD on Chinese roads. This has prevented Tesla from training its FSD system using Chinese traffic patterns.

However, this changed when Musk met with Chinese Premier Li Qiang last month to seek approval for deploying FSD in China and clear regulatory hurdles. Tesla will reportedly team up with tech giant Baidu, one of only 20 qualified suppliers with China’s top mapping credentials. (Tesla already uses Baidu for navigation in China.)

Now, it appears that Tesla is one step closer to officially registering the system in the country.

From Reuters today:

A successful software registration with China's Ministry of Industry and Information Technology will pave the way for Tesla to internally test Full Self-Driving (FSD) by having its employees drive on China's public roads before delivering it as an upgrade to its Chinese users in the coming months, said two of the people. The company currently offers two, less-advanced versions of its Autopilot driver assistance system in China.

FSD sales in China would open a new source of revenue for the EV maker, which has seen its sales volumes there fall by 7.6% in the first four months of the year in the face of increased discounting and competition by Chinese EV makers.

Tesla's push to roll out FSD in China also would "pressure other EV startups to accelerate their research and development”, said Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight.

As a reminder, Level 2 systems like FSD, despite the misleading branding, require constant driver supervision and readiness to take control at all times. They are not fully self-driving. Similar systems are also offered by Chinese rivals like Xpeng, Li Auto and Huawei. With Tesla’s imminent entry, the self-driving race in China is about to heat up.

90%: Ford And General Motors Disagree On Hybrids

Two of America’s largest automakers, General Motors and Ford, have contrasting views on hybrids.

Hybrids are viewed by some as the interim solution while automakers prepare for a fully electric future. But some environmental groups like Public Citizen think that hybrids are just polluting gas cars with a slightly better fuel economy.

Here’s a primer on where Ford and GM stand on the issue: Ford cut back the production of its electric models like the F-150 Lightning and redeployed the same capital and workforce to focus on hybrids—a segment with soaring sales in recent months.

GM delayed its EV plans too last year, but is now poised to offer several pure EVs this year and next year, starting with the Chevy Equinox EV that we recently reviewed, the Cadillac Optiq that will be offered later this year and the next-gen Bolt EV, expected to arrive sometime in 2025.

Here’s what Reuters has to say on Ford and GM's differing views:

Ford CEO Jim Farley wants the industry to stop viewing hybrid vehicles as only an interim solution to be used until drivers are comfortable going fully electric, while GM CEO Mary Barra does not view the technology as a longer-term play.

"We should stop talking about it as a transitional technology," Farley said of hybrids at a Bernstein conference. "Many of our hybrids in the U.S. are now more profitable than their non-hybrid equivalent," Farley added.

Barra said the Detroit automaker will have plug-in hybrids starting in 2027, in response to steeper regulatory requirements, but electric vehicles are where GM sees the market heading.

"It’s not the end game because it’s not zero emission," Barra said of hybrids at the same conference. "We're trying to be very smart about how we do that and how we deploy capital there," she added.

The two CEOs might have dueling views on hybrids. But the reality remains that both brands are focused on EVs for the long run. Ford’s “skunkworks” project that it announced earlier this year involves building a $25,000 truck, compact SUV and an EV designed for ride-hail services.

100%: Do You Believe In Japanese Automakers' “Multipathway Approach”?

We’ve long heard from Toyota about its multi-pronged approach to electrification that includes conventional hybrids, PHEVs, FCEVs and BEVs. But now there's an entirely new dimension to that.

As Toyota and its allies find creative ways to keep the combustion engine alive, I wonder how economically viable its plans will ever be, especially given the fact that synthetic fuels currently cost up to 10 times more than gas. What do you think? Leave your thoughts in the comments.