Can new Subaru Solterra EV win Tesla cross-shoppers?

TOKYO — Subaru has thrown down a Tesla test-drive challenge with its new Solterra electric crossover, unveiled last week as the brand's first serious EV.

Subaru Corp. is late in joining the EV arena, in contrast with Tesla's aggressive push to dominate the market.

But the way the low-volume Japanese brand sees it, Subaru has a big leg up when it comes to delivering popular crossovers, with its decades of success in the all-wheel-drive field.

"I hope you will test drive and compare the Solterra with other EVs, including Tesla," Subaru CEO Tomomi Nakamura said at the Solterra's Thursday, Nov. 11, launch event in downtown Tokyo. "Other EVs are good at driving on paved city roads, but you will feel the difference when you drive on rugged roads."

When the Solterra goes on sale in mid-2022 in the U.S., Canada, Japan, Europe and China, Subaru will be pitching the brand's outdoorsy awd DNA as much as the vehicle's electric drivetrain.

"The essence of Subaru cars remains the same even with this battery-EV model," Chief Technology Officer Tetsuo Fujinuki said. "The Solterra is our all-wheel-drive EV, so you can feel that it is a Subaru car when you ride it.

"Other EVs are not fun to drive," he said in a claim rivals would dispute.

The U.S. — Subaru's biggest global market by far — will account for the lion's share of Solterra sales, Nakamura predicted. But overall volumes will still be small, he conceded.

Aside from distinguishing the Solterra from Tesla and its Model Y, Subaru faces another challenge: differentiating it from the recently unveiled electric Toyota bZ4X. The Solterra is the badge-sharing stablemate of the bZ4X and a spitting image of the Toyota, from the oversized wheel cladding and beveled back fender to the funky wraparound taillight motif.

The Solterra stands apart from the Toyota with an EV-inspired variant of the Subaru brand's hexagon grille as well as its bracket-shaped rear lamps and headlights.

Subaru believes the Solterra will win buyers with the brand's trademark X-Mode awd control system, as well as a Grip Control function to improve stability on rough roads.

But the Solterra and bZ4X remain similar in design, in the vein of the Toyota 86 and Subaru BRZ, the sporty coupe combo that also is a joint product of the two automakers. The Solterra also will be built by Toyota at a factory in Japan, and use batteries sourced from China's CATL and Prime Planet Energy & Solutions, a joint venture between Toyota and Panasonic.

But given the EV market's tiny size, Nakamura said a niche player such as Subaru has little choice but to lean on a big partner such as Toyota for technology and scale until demand takes off. Through September, full-electric vehicles registered just 2.7 percent of the U.S. light-vehicle market.

"We are still in a situation where the EV market is being developed. At such a stage, we will basically deepen our alliance with Toyota to respond to electrification," Nakamura said.

"For now, the electrified vehicle is an area of cooperation, but when EVs will be popularized in the future, electrified vehicles may turn into an area of competition."

Toyota Motor Corp. owns a 20 percent stake in Subaru, and the companies have partnered on niche cars such as the 86/BRZ sporty coupe and other projects.

So far, Subaru has been slow to commit to the age of electrification. Its hybrid vehicles register mostly modest sales. Going forward, Subaru wants to derive 40 percent of its global sales from electrified vehicles by 2030. That will require a dramatic ramp-up, as well as help from Toyota.

But Nakamura sees little need for another Toyota-inspired EV in Subaru's lineup anytime soon. Aside from the bZ4X, Toyota is planning six other bZ models on the same EV platform before 2025. Nakamura said Subaru has no plans to jointly develop one of those into a Subaru product.

"Our U.S. retailers have been shown the Solterra. As a car, it was very well received by them," he said. "But whether it sells well is another matter."