Toyota Partners with Tencent for Joint Development of Electric Vehicle Software

Collaboration in AI, Cloud, and Big Data
Record Highs in Global Sales and Production for 2023FY
Electric Vehicle Sales Share Remains Low at 1%

Japanese automaker Toyota Motor Corporation is set to form a strategic partnership with Chinese IT giant Tencent in the electric vehicle sector, Nikkei reported on the 25th. Attention is focused on whether Toyota, which has been struggling with sluggish electric vehicle sales in China due to aggressive low-price competition, can find a breakthrough.

According to the report, Hiroki Nakajima, Toyota's Chief Technology Officer (CTO), announced this at a press conference held at the Sunyi Hall of the Beijing International Exhibition Center during the '2024 Auto China' (Beijing Motor Show).

[Image source=EPA Yonhap News]

Toyota plans to utilize artificial intelligence (AI), cloud computing, big data, and other technologies developed in collaboration with Tencent in its electric vehicles sold in China. Additionally, the two companies intend to jointly develop in-vehicle software this year to be installed in the vehicles.

Nikkei stated, "Toyota aims to accelerate the development of vehicle software, which is key to next-generation electric vehicle models, by collaborating with Chinese companies," adding, "According to Chinese media, Tencent is currently also partnering with companies like Audi."

There is also keen interest in whether this partnership will help Toyota boost its electric vehicle sales performance in China. Recently, the Chinese electric vehicle market has been flooded with low-priced models, causing Japanese automakers including Toyota to struggle. The number of new vehicles Toyota sold in China last year decreased by 1.7% year-on-year, totaling 1,907,600 units.

Toyota also disclosed its financial results for the 2023 fiscal year (April 2023 to March 2024) on the same day. Toyota Motor Corporation's global production volume increased by 9.2% compared to the previous fiscal year, reaching 9,971,739 units, and sales volume rose by 7.3% to 10,309,457 units, both marking record highs.

In particular, hybrid models, which have been highlighted for their reasonable price and excellent fuel efficiency, drove sales with a 31% increase in global sales. However, despite a roughly threefold increase in electric vehicle sales worldwide, their share of total sales remained at just 1%.

A Toyota official analyzed, "We did not reach our initial global sales target of 10.4 million units," citing factors such as intensified price competition in China, the Asian economic downturn, and the Daihatsu misconduct issue as influences.