Column: When Toyota gets humbled, everyone should take note

Toyota is known and admired for a lot of things: high quality and durability, the fuel economy of its Prius hybrids, and its supplier and dealer relations, to name a few.

But one of the quiet things underpinning all of that is how the company uses common platforms and suppliers and procedures to make that high quality possible, even at assembly plants that rapidly crank out vehicles. It's called design for manufacturing, and Toyota is one of the world's top practitioners — ever.

But a funny thing happened: Tesla has apparently leapfrogged Toyota, at least for battery-powered cars.

Toyota took a hard look at a Tesla Model Y and — if you'll forgive a 20th century movie reference — had a Salieri moment.

Antonio Salieri was the Italian classical composer villainized in the 1984 movie Amadeus. His jealously comes in part from the idea that only someone as skilled as he could recognize the towering talent that was Mozart.

That's what struck me as I read Hans Greimel's compelling and insightful account of Toyota's wonder at the Tesla teardown.

Of course, the story doesn't end there. Toyota is now inspired and determined to regroup and find better solutions. Incoming CEO Koji Sato hasn't set any new goals for electric vehicle production or sales — so far sticking with Akio Toyoda's target of 3.5 million in 2030.

But that could change. As Sato is putting together his leadership team, the company is already working on a new EV platform to go into production in 2026.

While many revealing quotes were from unnamed executives and engineers not authorized to speak publicly, Sato has been unusually blunt in his criticism of Toyota's EV approach.

"To deliver attractive BEVs to more customers, we must streamline the structure of the car, and — with a BEV-first mindset — we must drastically change the way we do business, from manufacturing to sales and service," Sato said.

Drastic change may sound troubling to the many suppliers and dealers who have thrived as part of Toyota's extended organization. In reality, it may be difficult.

It occurred to me as I was interviewing Greimel on the Daily Drive podcast that in some ways, this concern over the surprisingly outstanding work being done at Tesla is almost a gift for Sato.

Toyota has been so successful for so long that its leaders have had to work to create an internal sense of crisis to combat complacency. Here, Sato has a crisis he can bring right to them.

While Toyota's critics — the EV extremists who are aghast that any company would continue to develop or produce hybrids and other gasoline-burning vehicles — are narrow-minded in their industry analysis, they may well feel legitimized by Sato's direction.

After all, if Toyota had been more "all in" on EVs, it would already have a dedicated platform and production sites.

But here's the thing: The conversion to EVs — and concurrently, competition with Tesla — is a long, long game.

Sato is tacitly acknowledging that Toyota is going to be behind Tesla in EV manufacturing efficiency at least until 2026. But getting it right then will mean a lot more than getting it right now.

In this dawning EV industry, battery minerals and refining capacity, cell plants, pack plants, chargers, renewable energy and recycling are all underdeveloped. It's not going to be until maybe 2030, give or take five years, for this to all take shape.

Tesla, which embarked on its EV adventure much earlier — with the help of Toyota, Daimler and others — is far ahead in frankly all of those areas. CEO Elon Musk said last week that the automaker is working to cut production costs on its next platform by half from the one it used that left Toyota's engineers gobsmacked.

It's hard for some folks at some automakers, who saw early Teslas fall apart or be delivered with mismatched door panels, to take the company seriously. Musk had long talked about building "the machine that builds the machine," but his highly automated concept seemed on par with his full self-driving aims: gospel to the true believers, poppycock to skeptics.

From what I hear, Ford has also awakened to the reality of Tesla's skill, similar to the awareness Toyota experienced, which could certainly inform Jim Farley's urgent push for change.

I've also heard that GM is not similarly troubled, which I would ascribe to executives' extreme confidence in their Ultium platform and the supporting pieces that are already being put in place — from lithium mining to battery recycling.

But everyone in the industry should take notice of Toyota's alarm: Tesla's success isn't just a product of hype. And anyone looking to compete has to be ready to think again about everything they think they know.