Working Toward the Mobility Society of the Future

Message from the President The Source of Our Value Creation: What Makes Us Toyota Value Creation Story: Working toward the Mobility Society of the Future Business Foundations for Value Creation Corporate Data > Making Ever-better Cars > Initiatives to Achieve Carbon Neutrality Software and Connected Initiatives > Commercial Sector Initiatives > Woven City clarify how that item may affect the battery. Based on this analysis, we are extremely attentive to the size and shape of foreign matter, and we are manag- ing processes in a way that is aimed at preventing the generation or entry of relevant foreign matter. Halving Battery Costs through the Integrated Development of Vehicles and Batteries To popularize BEVS, we strive to reduce costs via the integrated development of vehicles and batter- ies to provide BEVS at a reasonable price. To start with, we aim to reduce the costs of batteries themselves by 30% or more by develop- ing materials and structures. Then, for the vehicle, we aim to improve power consumption, which is an indicator of the amount of electricity used per unit of distance, by 30%, starting with the Toyota bZ4X. Improved power efficiency leads to reduced requirements for battery capacity, which will result in a cost reduction. Through the integrated development of vehicles and batteries, we aim to reduce the battery cost per vehicle by 50% compared to the Toyota bZ4X in the second half of the 2020s. Technologies Supporting the Full Lineup of Electrified Vehicles Using Solid-state Batteries Starting with HEVS In the near future, the energy density of conven- tional lithium-ion batteries per unit of weight is expected to peak. Accordingly, vigorous efforts are now under way to develop next-generation lithium-ion batteries, aiming to achieve longer service life, greater energy density, more compact size, and lower costs. At Toyota, we push ahead with the development of such batteries by em- ploying the following three approaches. For liquid batteries, which use a liquid electro- lyte, we are taking on the challenge of realizing material evolution and structural innovation. In addition to these two approaches, we are aiming to commercialize all-solid-state batteries that employ a solid electrolyte instead of a liquid electrolyte. As such, our wide-ranging development efforts are aimed at creating three types of batteries. By the second half of the 2020s, we hope to im- prove the characteristics of each type so that we can provide batteries that can be used with peace of mind. With regard to all-solid-state batteries, we promote development aimed at achieving higher Toyota Concept for Battery Development Universally applied to HEV, PHEV, BEV, and FCEV batteries Security output, longer cruising range, and shorter charging times. In June 2020, we built a vehicle equipped with all-solid-state batteries and con- ducted test runs on a test course to obtain driving data. Based on that data, we continued to make improvements, and in August 2020, we obtained license plate registration for vehicles equipped with all-solid-state batteries and conducted test drives on actual roads. In the course of development, we discovered that the fast movement of ions within all-solid- state batteries could enable them to achieve higher output. On the other hand, we found that these batteries tend to deteriorate faster due to the formation of gaps within the solid electrolyte, posing an issue of shorter service life. Therefore, continued development of the solid electrolyte materials themselves is needed. We will start the introduction of all-solid-state batteries in HEVS, as these vehicles require high output and we have a wealth of accumulated know-how regarding these vehicles. We will release these batteries to the market as soon as possible in order to gain customer feedback and continue to improve them. Next-generation BEVS 1996 2012 Flexible Battery Supply With the rapid expansion of EV usage, we are working to build a flexible system that can stably supply the required volume of batteries at the required time while meeting the needs of various customers around the world. To this end, we will establish the necessary technologies by conducting a certain amount of in-house production in the pursuit of our battery development concept of achieving batteries that can be used with peace of mind. We will then cooperate and collaborate with partners who understand and will put this concept into practice. We will also proceed with discussions with new partners in some regions. Our approach to production within the Group can be described as "starting up using small basic units." This approach draws on lessons learned from the global financial crisis. It is difficult to notice latent risks when production is growing. Because of this, we have to take a risk-controlled approach to growth based on Toyota's philosophy of "making only what is needed, when it is need- ed, and only in the amount needed." For example, the production of all-solid-state 2019 2022 Core electrification technologies + FCEV Fuel cell stacks High-pressure hydrogen tanks Safety Long service life High-level quality BEV Electric motors Chargers + PHEV Batteries Engines HEV Power control units CO2-free fuels e-fuel Biofuel RAV4 L EV RAV4 EV C-HR/IZOA TOYOTA bZ series First model: Toyota bZ4X Aiming to create safe batteries that can always be used with peace of mind over their entire lifetime, have high resale value, and that contribute to the building of a resource-recycling society Unique Toyota BEVS that utilize technology cultivated through years of HEV development Battery Cost Targets: Integrated Vehicle-battery Development Affordable, high-quality products High-level performance Giving electrified vehicles meaning through dissemination Increasing customer choice Highly balancing 5 factors to provide reliable batteries Battery development Vehicle development Greater than 30% reduction in the cost of a single battery C-HR/IZOA TOYOTA bZ4X Future BEVS Power efficiency 30% kWh/km 30% improvement in power efficiency = 30% reduction in battery capacity (30% cost reduction) • Development of low-cost materials: Cobalt-free, nickel-free, and new electrode materials • Manufacturing process innovation: New development of battery manufacturing processes and battery material processes • New structure: Integrated structure of battery cells and packs to match the vehicle • Evolution of battery control model: Fuller use of battery capacity with a focus on safety, security, and long service life ☑ Achieve the following by utilizing and developing technologies cultivated through the production of electrified vehicles: • Reduction of vehicle driving resistance to suit electrified vehicles Further expansion of energy regeneration • Optimal energy/thermal management of entire vehicle and components . Optimally efficient design and control of entire powertrain system TOYOTA MOTOR CORPORATION 21 INTEGRATED REPORT