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Shares of Toyota, Subaru drop after “embarrassing” recall of first EVs According to Reuters

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© Reuters. FILE PHOTO: The Toyota logo is seen at its booth during a media day for the Auto Shanghai show in Shanghai, China April 19, 2021. REUTERS / Aly Song / File Photo / File Photo

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By Maki Shiraki and Satoshi Sugiyama

TOKYO (Reuters) – Toyota Motor (NYSE:) shares slid after it recalled some of its first mass-produced all-electric models, launched two months ago, due to the risk of loose wheels, a setback. back toward its ambitions to electrify its range of vehicles.

Toyota, the world’s largest automaker by sales, said on Thursday it will recall 2,700 bZ4X SUVs globally.

Subaru (OTC:) Corp, in which Toyota has a nearly 20% stake, also said it is recalling about 2,600 units of the Solterra, a related model.

Solterra, Subaru’s first all-electric vehicle, was co-developed with Toyota and shares key components with the bZ4X.

The recall adds to problems at Toyota, which has been forced to make frequent production cuts this year due to global chip shortages and other supply issues, and is facing pressure. investors because of the slow adoption of battery-powered vehicles (BEVs).

“It’s embarrassing,” said Christopher Richter, an analyst at CLSA. “People have been waiting too long for Toyota to get a mass-market battery electric vehicle … and just a few weeks after they’re on the market, there’s going to be a recall.”

But it’s “not an indictment of the new tram system,” he added, because the problem is a simple mechanical one and repairs are unlikely to be expensive.

Japan’s safety regulator says sharp turns and sharp braking can cause the hub bolt to loosen, increasing the risk of the wheel falling out of the vehicle. It said it was not aware of any accidents caused by the bug.

An official at Japan’s Ministry of Transport said the problem was discovered after people in the United States were driving the vehicles.

Toyota has reported that one vehicle, in particular, has received rough treatment. “We don’t know who the driver is, but the driver was working very hard,” the official said, adding that Toyota discovered the problem and affected only a few vehicles.

A spokesman for Toyota and Subaru said the companies have yet to decide how soon to fix the problem and resume the rollout, as the cause has yet to be determined.

Toyota said on Thursday that not every vehicle in the series is being recalled but declined to say how many it has produced overall.

Subaru shares, down nearly 5% on Friday, closed down 2.8%. Toyota shares closed down 0.7%.

Once a favorite among environmentalists for its popular hybrid model, Toyota has been criticized for not acting fast enough to phase out gasoline-powered cars and lobbying for the government. climate book.

The company has repeatedly hit back at criticism, citing the need to offer different types of powertrains to suit different markets and customers.

Japan changed a key policy document to show its support for hybrids on par with BEVs after a lawmaker quoted the head of Toyota as saying that automakers cannot backs a government that has rejected technology made popular by the Prius, Reuters reported on Friday.

Gasoline-electric hybrid models are still far more popular in Toyota’s home market than electric vehicles, which accounted for just 1% of passenger car sales in Japan last year, based on industry data.

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