Toyota Motor Corporation (TM - Analyst Report) has announced the launch of the electric version of its RAV4 SUV at the Electrical vehicle Symposium in Los Angeles. The vehicle will be featuring batteries and electric powertrain from Tesla Motors Inc. (TSLA - Analyst Report) .
The Japanese automobile major has set the base price of the all-new RAV4 EV at $49,800, which is more than double the starting price of the gasoline version of RAV4 SUV. The initial price of 2012 RAV4 2.5 liter gasoline engine is $22,650.
The sale of RAV4 EV will begin in the summer of 2012 in four major markets in California, including Sacramento, San Francisco Bay Area, Los Angeles/Orange County and San Diego. RAV4 EV will be manufactured at Toyota’s Woodstock, Ontario plant. Moreover, Toyota expects to sell around 2,600 vehicles within the next three years.
The RAV4 EV, with driving performance, cargo capacity and comfort level, will be traveling 100 miles per charge. It needs to be charged for six hours on a 240 volt charger. Toyota will provide battery warranty for 8 years or 100,000 miles drive.
The vehicle comes with two different drive modes, Sport and Normal. With the Sport mode, the car can travel 0.6 mph in 7 seconds with maximum speed of 100 mph. However, in Normal mode, the vehicle reaches 0.6 mph in 8.6 seconds, with maximum speed of 85 mph.
Further, the RAV4 EV will enlarge the customer’s preference bundle for electric vehicles. Earlier, notable electric small vehicles available in the market were Nissan Motor Co’s (NSANY - Snapshot Report) Leaf, Ford Motor Co’s (F - Analyst Report) Focus Electric and sports cars of Tesla Motors. These vehicles have been designed for customers, who give importance to environment and appreciate performance. However, one of the draw back of the electrical vehicles is the limitation of charging infrastructure. RAV4 EV is also priced higher than the other electrical cars in the market.
According to Bloomberg, during 2012 to 2014, Toyota, General Motors Company (GM - Analyst Report) , Honda Motors Co. (HMC - Analyst Report) , Nissan and Chrysler are expected to be under extreme pressure to deliver around 60,000 plug-in hybrid and all-electric vehicles to meet California’s zero emission rule. Toyota, who possesses the largest share, needs to supply the most vehicles.
Toyota Motor has played an important role in global market for fuel efficient and environment friendly vehicles. However, the company’s profit declined in the last quarter due to lower production and sales volumes.
Toyota currently retains a Zacks #2 Rank, which implies a short-term Buy rating. We have a long-term Neutral recommendation on the stock.