Toyota to pay suppliers after scrapping Lexus LF-ZC EV
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- Toyota will compensate suppliers for the canceled Lexus LF-ZC EV, with payments potentially totaling tens of billions of yen as some suppliers had already invested in specialized equipment, per Nikkei.
- Executive VP Hiroki Nakajima confirmed the discontinuation of the Lexus LF-ZC, telling reporters that technologies developed for it — including Gigacasting, a new ADAS platform, and prismatic batteries — "have already been completed" and will go into a successor vehicle.
- A Toyota source told Nikkei that canceling at this stage is "probably the first in Toyota's history," noting that past launches like the Prius hybrid and Mirai fuel cell vehicle were often pursued regardless of profitability.
- The Lexus LF-ZC, unveiled at the 2023 Japan Mobility Show, had been pushed back from 2025 to mid-2027 production and was set to offer roughly triple the driving range of the bZ4X with 20-minute fast charging.
- Electrek reports the discontinuation was driven by prohibitively high costs of new molding and production equipment for the flagship EV.
- Toyota's global sales fell 7.2% in May — the fourth straight month of year-on-year declines — with China sales crashing 32%, even as BEV sales rose 170% to 37,313 units.
Why it matters: Toyota is paying suppliers tens of billions of yen for a cancellation a company source called "probably the first" of its kind — a financial hit that lands as China sales crashed 32% in May and BYD's CEO Wang Chuanfu declared his company will "truly become the No. 1 automaker globally."
