Subaru envisions U.S. lineup of ‘several' EVs by 2025; operating profits soar

TOKYO – Subaru said it will ramp up its electrified offerings in the critical U.S. market to include several battery EVs by 2025 as it shifts development focus to the segment.

The EV rollout will lean on Subaru Corp.'s partnership with Toyota Motor Corp. and be further amplified by the expansion of the company's hybrid models as well, executives said.

"Our main electrification strategy centers on strong hybrids and electric vehicles and introducing such models in the U.S. by 2025," Tomoaki Emori, senior vice president of the corporate planning division, said at the company's Wednesday quarterly earnings announcement.

"When we look at the U.S. market situation, we will need to offer several models in our EV lineup," he said. "We have shifted our weight toward that in our development."

Emori did not offer details about the upcoming EVs, but they would be in addition to the only full-electric vehicle currently in the lineup, the Solterra crossover co-developed with Toyota. Subaru said last May that it wants to derive 40 percent of its global sales from battery electrics and hybrids by 2030 and apply electrification to all models in the early 2030s.

"The U.S. accounts for 75 percent of our total sales," Emori said.

"Given that, we will move ahead with our electrification strategy by responding to U.S. environmental regulations, legal and market trends."

Subaru, often viewed as a laggard in the EV space, plans to unveil an updated electrification plan in the first half of the fiscal year starting April 1. Emori said "cooperation with Toyota is essential" to those plans.

Currently, the only electrified vehicles Subaru sells in the U.S. are the Solterra all-electric crossover and the plug-in Crosstrek Hybrid.

The Solterra, a Subaru-badged version of the Toyota bZ4X, is assembled by Toyota.

Subaru will start in-house production of EVs on a mixed production line with internal combustion vehicles in the mid-2020s. And from 2027, it will churn out EVs from a dedicated line being planned for its Japanese plant in Gunma prefecture.

Subaru's upcoming hybrids will use Toyota's hybrid system and be made at the Gunma complex. The site currently manufactures the Forester, Crosstrek, WRX, BRZ, Legacy, Outback and Impreza, giving an idea of what nameplates might be in line for electrification.

Subaru previewed its EV roadmap while announcing a quadrupling of operating profit in the fiscal third quarter on increased production, higher sales and foreign exchange rate gains.

Operating profit soared to 103.2 billion yen ($782.6 million) in the three-month period ended Dec. 31, from 22.7 billion yen ($172.1 million) the year before.

Restored production firepower, as the company gradually recovered semiconductor shortages, helped Subaru fill inventories and stoke sales. Wholesale deliveries climbed 38 percent to 237,000 vehicles in the October-December period.

Still, Subaru said a full ramp-up to pre-pandemic levels is hampered by lingering supply shortages of select key components. Those shortages are expected to last until May or June.

Subaru trimmed its production outlook to 880,000 vehicles for the current fiscal year ending March 31, and its sales forecast by 50,000 units to 870,000.

CFO Katsuyuki Mizuma predicted that global output would reach 1 million vehicles in the coming fiscal year, as production constraints continue to ease.

In the U.S., he said, Subaru expects sales to climb to between 600,000 and 630,000 units in calendar year 2023. That would mark a sizeable jump from last year. Subaru's sales sank 4.7 percent to 556,581 vehicles in the U.S. in 2022 and last topped 600,000 in 2020.