Toyota Has Lagged in the EV Market. Now, It Aims to Produce 3.5 Million Units by 2030 with Area 35, a Plan Inspired by Tesla

In Nevada, there’s Area 51, the legendary restricted zone rumored to house extraterrestrial secrets. Meanwhile, Toyota is launching its own mysterious plan, Area 35, aiming to electrify its future. Despite producing just over 100,000 electric vehicles (EVs) in 2023, the Japanese automaker is targeting 3.5 million EV sales by 2030—an ambitious leap for the world’s largest car manufacturer.

Toyota has long taken a cautious approach to EVs, opting instead to focus on “what the consumer asks for.” But with the global EV market expanding rapidly, the automaker knows it can’t afford to fall behind. While EVs won’t become Toyota’s central pillar, they will play an increasingly significant role in its portfolio.

To make this leap, Toyota is turning to a familiar template: Tesla.

Area 35: Toyota’s Plan for Efficiency

Diversifying technologies and products remains critical for market leadership. Though EV sales account for a fraction of Toyota’s overall business—out of more than 10 million vehicles sold in 2023—Toyota recognizes the need to stay competitive.

Its Area 35 initiative aims to close the gap with Tesla through aggressive production goals and efficiency improvements. By 2026, Toyota plans to produce 1 million EVs annually, a tenfold increase over its 2023 output. The ultimate goal: 3.5 million units by 2030.

According to Automotive News, the Area 35 project involves a comprehensive overhaul of Toyota’s manufacturing operations. Unlike Volkswagen, which built dedicated EV factories and now struggles with excess capacity, Toyota is focused on maximizing efficiency in its existing plants.

The strategy includes:

• Reducing equipment size: Cutting machinery footprint by 35% to save space and speed up production.
• Streamlining assembly lines: Shaving seconds off the time needed to produce each vehicle. Over large volumes, these improvements yield significant competitive advantages.
• Simplifying designs: Cutting the number of parts in each EV by 35% and standardizing components across models.

This approach mirrors the principles behind Tesla’s Gigafactory in Germany, known for its compact footprint and record-setting production times.

Tesla CEO Elon Musk built his EV empire by focusing on cost savings, production efficiency, and cutting-edge design. Toyota is borrowing from this playbook as it modernizes its processes to stay relevant in a rapidly changing automotive industry.

Toyota has already begun implementing Area 35 initiatives at some plants in Japan. By the end of 2023, these changes will result in an additional 80,000 vehicles produced. The company also aims to improve product profitability by 3.5%, reinforcing the bottom line while ramping up production.

Image | Toyota

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