Toyota has officially launched its entry-level all-electric model, the bZ3X, in the Chinese market. The model was developed by Toyota in collaboration with Chinese state-owned Guangzhou Automobile Group (GAC) and debuted at the Beijing Motor Show in April 2024. At the same time, Toyota also unveiled the bZ3C hybrid crossover, which was jointly developed by Toyota with FAW and BYD.
Impactful pricing strategies
The most striking feature of the bZ3X is its price, which starts at just $15,100 for the base version. Considering the intelligent systems it is equipped with, the price could put Toyota under pressure on profitability in the short term. However, the move reflects the strategic concessions that Toyota has been forced to make in order to maintain its brand influence and market share in the fiercely competitive environment in the Chinese market. After the launch of the new car, the market response was enthusiastic, and orders exceeded 10,000 units in the first hour.
In order to reduce production costs, the bZ3X is highly dependent on the local supply chain, especially based on the GAC Aion V platform. Toyota disclosed that 65% of the parts of the model come from China, and only 1% depends on imports.
Intelligent driving and power configuration
The bZ3X is equipped with advanced intelligent driving technology, and its core computing platform is powered by Orin X chips. The high-spec version (starting at $20,500) is equipped with LiDAR and Momenta's ADAS 5.0 system, which supports autonomous driving with navigation functions. The base variant is equipped with Toyota Pilot driver assistance system.
In terms of power, the bZ3X is powered by a lithium iron phosphate (LFP) battery with capacities ranging from 50 kWh to 67.9 kWh, with a range of between 430 km and 610 km in CLTC mode.
In terms of range, the bZ3X's CLTC pure electric range provides three options: 430 km, 520 km and 610 km, which can basically meet the needs of consumers for daily commuting and short- and medium-distance travel. At the same time, its charging speed also has certain advantages, from 30% - 80% charging only takes 24 minutes, which is faster than the 30 minutes of BYD Yuan PLUS, which alleviates consumers' charging anxiety to a certain extent.
Figure: Toyota bZ3X enters China: Can the low-price strategy reverse the market decline?
Facing fierce market competition
Despite the bZ3X's impressive configuration, its market outlook is still challenging. BYD recently announced that it will equip 21 of its models with intelligent driving technology as standard at no additional charge. The system, called "Shenxing", is divided into three different levels, with autonomous driving features starting at $9,555 for the Seagull. In addition, Tesla has also launched FSD-like (Full Self-Driving) features in China, but it is currently limited to driver-assisted mode, which cannot achieve full self-driving and requires users to pay a one-time payment of $8,800, which has weakened its market appeal.
Future growth potential
While the bZ3X may not be profitable for Toyota, the strategy is intended to boost the brand's presence and leverage this success to expand into other markets in Asia. Among them, India and Thailand are the countries where Toyota focuses on its layout. Battery electric vehicle (BEV) production in India is expected to grow at a compound annual growth rate (CAGR) of 98% between 2023 and 2028, while Thailand's growth rate is as high as 144%. In these regions, EV production is still in its infancy, and Toyota's low-cost smart EV strategy is expected to capture future growth opportunities.
