A senior executive at a Toyota leasing subsidiary has warned that the world’s largest carmaker is confronting an “unprecedented” challenge to revive its electric vehicle sales, as it risks missing its already low target in Japan for the second consecutive year.

The bleak outlook for the bZ4X, Toyota’s first mass-produced all-electric car that was recalled weeks after launching in May, comes as people close to the Japanese group say that it is overhauling its plans for rolling out battery-powered vehicles.

Unlike rivals banking solely on EVs, Toyota is relying on growth from hybrid vehicles — with both petrol and electric power — as well as hydrogen cars. The company argues that not every country will be able to accommodate EVs because of electricity constraints and affordability.

Toyota is coming under increasing pressure from investors to hone its EV strategy, with the botched launch of the bZ4X fuelling concern that the carmaker is falling behind rivals. Toyota resumed production of the bZ4X in October, after addressing issues with bolts that could cause its wheels to fall off.

“This was the first time in Toyota’s history that a recall occurred immediately after the product was launched, causing production and sales to be suspended for several months,” said Shinya Kotera, president of Kinto, a Toyota leasing subsidiary that exclusively delivers the model in Japan.

“Toyota is in an unprecedentedly difficult situation, and the recall threw [the bZ4X launch] off track,” Kotera said, in an interview at a Kinto office in Tokyo.

Kotera said Kinto would not meet Toyota’s annual sales target of 5,000 units of the bZ4X in its home market “in the first year nor the following year”. The leasing unit was forced to halve the one-time fee on orders to 385,000 yen ($2,900) in an effort to boost sales. As well as Japan, the vehicle is available in the US, China and Europe.

The lacklustre domestic demand comes as Toyota reviews its electric-car manufacturing process to make it more cost-effective. A new team was established last year led by Shigeki Terashi, a former chief technology officer, according to two people close to the company.

“Toyota may be reassessing the car production process from scratch, such as how to assemble supply chains for EVs and decide on which parts to outsource or fabricate in-house,” said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute.

Reducing costs has been Toyota’s strength for decades, but “it is possible that Toyota still doesn’t see how to lower costs when it comes to EVs,” Sugiura added.

Toyota declined to comment on sales prospects for the bZ4X, saying it had no details to share regarding development projects beyond those it had already disclosed.

In addition to rivals such as Tesla and Volkswagen, Toyota faces competition in EVs from new entrants such as Sony. On Wednesday, the entertainment group unveiled a prototype of its new Afeela EV, which will be produced with Honda and make use of Qualcomm’s chips.

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