Toyota, Mazda and Subaru commit to combustion

Boldly committing to internal combustion engine technology, three prominent Japanese car-makers known for their cautious approach to electric vehicles – Toyota, Mazda, and Subaru – jointly announced a bold initiative to continue manufacturing petrol engines.

This decision underscores their belief in the ongoing importance of conventional powertrains, backed by strong sales of hybrid vehicles, seemingly out of sync with the industry’s shift towards electrification.

“There is a uniquely Japanese way to climb the mountain, which is carbon neutrality,” stated Toyota CEO Koji Sato as he announced his company’s plans.

The alliance was introduced at a joint “Multipathway Workshop” about the development of next-generation internal combustion engines that prioritise lower emissions through hybrid technology and fuels that meet their customers’ unique needs and preferences.

It aims to integrate new drop-in engines with electric drive units and make them compatible with various eco-friendly fuel options, such as synthetic e-fuels, biofuels, or hydrogen.

The trio claims that these will be highly efficient, powerful, and more compact than existing powertrains, improving design flexibility, aerodynamics, and economy, while confirming that they will instead focus on developing their own powertrains.

Subaru representative director, president and CEO Atsushi Osaki emphasised that “achieving a carbon-neutral society is a challenge that must be undertaken by all of Japan’s industries and society as a whole”. 

Toyota president and CEO Koji Sato added: “The three companies, which share the same aspirations, will refine engine technologies through friendly competition.”

Mazda president and CEO Masahiro Moro reiterated the brand’s dedication to the initiative, stating: “Given the rotary engine’s compatibility with electrification and carbon-neutral fuels, Mazda will continue to develop the technology through co-creation and competition to ensure it can contribute broadly to society.”

Why now?

Currently, the Toyota bZ4X, rebadged and also sold as the Subaru Solterra, are the only EVs sold by these brands in Australia, as the Mazda MX-30 was discontinued in 2023 after only three years due to poor demand. However, Toyota’s premium brand Lexus has two EVs on sale and is heading toward an electric-only future.

Apart from the Lexus factor, this strategic collaboration does not come as a surprise, with Toyota holding a 20 per cent stake in the parent company of  the Subaru car brand, as well as a 5.1 per cent stake in Mazda.

Unanswered questions

Toyota, Mazda, and Subaru made a compelling argument for next-generation internal combustion engines as a pathway to carbon neutrality but several uncertainties remain around emission calculations, efficiency gains, corporate synergies, timelines, the optimistic approach to carbon-neutral fuels, and the potential impact on job preservation within the industry.

Emission calculations

While the presentation may have lacked specific data for a straightforward comparison between hybrids and EVs, Mr Sato argued that hybrid cars with combustion engines produce a similar amount of carbon dioxide over their lifespan compared to battery-only EVs.

This comparison takes into account emissions from fossil fuel production or electricity generation, as well as the environmental impact of manufacturing processes like sheet metal stamping and battery chemical mining. However, the validity of this assessment varies by region due to EVs having lower lifetime emissions when manufactured and operated in regions with mostly nuclear or renewable energy sources.

Efficiency gains

Toyota unveiled a forward-thinking strategy involving cleaner, downsized 1.5-litre and 2.0-litre turbo-petrol engines that are said to deliver similar performance to a 2.5-litre unit.

Engineered to be hybrid-compatible and capable of burning various carbon-neutral fuels, Toyota’s focus for these drivetrains is on enhancing thermal efficiency and ensuring they will comply with upcoming 2027 Euro 7 emissions regulations.

Toyota also plans to integrate a next-generation EV platform into a Lexus production model by 2026.

Meanwhile, Subaru emphasised its ongoing hybrid boxer engine project, set to begin production this autumn, with Mr Osaki underscoring plans to introduce a next-generation hybrid system in the Crosstrek and Forester SUVs as a stepping stone towards developing a portfolio of eight EV models by the end of 2028.

On the other hand, Mazda revealed an intention to develop its iconic rotary engines to operate on carbon-neutral fuels in conjunction with the previously confirmed integration of rotary tech with hybrid systems.

Mr Moro also introduced the concept of one- and two-blade variants, the latter aiming to deliver enhanced power and a lower centre of gravity for performance-focused vehicles.

Corporate synergies

Even with Toyota’s minority stakes in Mazda and Subaru, the trio clarified that their joint “Engine Reborn” initiative does not involve shared development or technology.

By contrast, Honda and Nissan, which lack any cross-shareholdings, have announced plans to explore collaborations on EVs and software. 

Timelines

The timing for the release of these innovations appears vague. Toyota has indicated that its upcoming engines could be unveiled within the next couple of years, but details about a more extensive roadmap remain undisclosed. Similarly, Mazda and Subaru have refrained from discussing specific timelines, particularly with regards to long-term plans.

Carbon-neutral fuels

There is noticeable hesitance among automakers when addressing the integration of carbon-neutral fuels such as synthetic e-fuels, biofuels, and hydrogen into their strategies. 

The significant cost and limited global availability of these fuels, especially synthetic e-fuels and hydrogen, pose a major challenge. 

Concerns also persist regarding the management of harmful emissions like nitrogen oxides and pollutants caused by the combustion of engine lubricants.

However, synthetic e-fuels, biofuels, and hydrogen liquid fuels offer advantages in energy density, storage, and transportation.

If successfully developed, these fuels have the potential to render internal combustion engines close to carbon neutral.

For several years, Toyota has been working on the development of hydrogen-burning engines. It also recently announced a collaboration with other companies to study the introduction and promotion of these fuels for widespread adoption in Japan by 2030, showcasing this progress by racing a GR Corolla race car equipped with a hydrogen engine in a 24-hour endurance race at the Fuji Speedway in Japan.

Job preservation

Focusing on securing the domestic supply chain has become a top priority, with Toyota highlighting the importance of sustaining companies that manufacture crucial components such as piston rings, camshafts, ignition coils, and turbochargers. 

Japanese car-makers heavily depend on these 100 Tier 1 suppliers, which support 5.5 million jobs in this sector alone. These suppliers play a significant role not just in providing engine parts but also in fostering industry innovation.

Japan’s dedication to job security distinguishes it from competing nations, yet this commitment may hinder its capacity to stay competitive in the rapidly evolving fields of EVs and autonomous driving, where China and Silicon Valley lead the way.

Despite Toyota chair Akio Toyoda’s patriotic efforts to safeguard Japan’s automotive sector, striking a balance between upholding tradition and embracing innovation remains a challenge for the country’s economy.

Economic viability

Despite a slowdown in the growth of EV sales and global competitors re-evaluating investments in battery technology, Toyota, Mazda, and Subaru remain confident in the future of hybrid engines.

Toyota’s record revenue and profits in the previous fiscal year, fuelled by robust hybrid vehicle sales, justify its optimism for hybrid technology in the automotive industry.