How Toyota Is Navigating The Future with Zach Reed of Toyota North America

Kyle Mountsier: 0:06

Alright, sitting here with Zach, the East Coast communications manager for Toyota and Lexus man. Thanks for joining.

‍Zach Reed: 0:12

Oh my gosh, thanks for having me. I'm actually I live here in DC. So this is a home game for me. This

Kyle Mountsier: 0:16

is home game. We're like policy day like this, you'd like policy communications home.

Zach Reed: 0:21

Exactly. So to bed last night Good to see my wife and kids tonight. So that's good. That's good,

Kyle Mountsier: 0:25

good. Well, you know, in our ecosystem, and I think in a lot of automotive Toyota is a brand Toyota and Lexus are brands that though they may not have the most dealerships in the country, or anything like that they are so talked about and looked for for kind of like where they're headed next. And one of the big questions on everybody's mind, especially the last year and a half is that Toyota has not Toyota and Lexus have not been the out and out, quote, unquote, leaders in the Eevee space. Like, what is the actual intention of round? The approach to the drive train? Or what's driving the VR?

Zach Reed: 1:04

That's a great question. So what we say at Toyota is, our goal is not to sell the most of one power train, our goal is to reduce carbon as quickly as possible. And we look at around the, around the country and we look at where buyers are, we think that it's kind of a portfolio approach multiple it's powertrains to reduce carbon. So one of the big pieces of our portfolio are hybrids. So we introduced the first one to 97. First one went on sale, the Prius in the US in 2001. And when you look at I mean, there's different studies that say reduce carbon about 50 to 70%, over a standard internal combustion engine. So if we look at that, and the number of hybrids we can get out there, we didn't actually, there's actually interesting study, if you take a standard 100 kilowatt hour 300 mile range evey battery, if we took the same minerals that were in that 100 kilowatt hour battery, we can actually make 109 Priuses with those minerals. So when you look at that we can sell one BV, get one internal combustion off the road, or we can sell 109 presets and get 109 internal combustion cars off the road

Kyle Mountsier: 2:14

at 50 to 70%.

Zach Reed: 2:17

And I believe it's 30 times more carbon reductions over the lifespan of those 109 Priuses for one, Bb,

Kyle Mountsier: 2:24

so we looked at, it's more approachable for a consumer totally

Zach Reed: 2:27

and, and the kind of the argument I make a lot is we've been selling in the US hybrid since 2001. We just this year 29% of our sales are hybrids. So it's still it's a long game, it's a long game, and people still think on the hybrid side you have to plug them in. So it's

Kyle Mountsier: 2:45

funny my I'll have you know, my wife and I, we bought a Toyota Sienna, Sienna, just a little other great.

Zach Reed: 2:50

We had one as well, one of my favorite cars. First of

Kyle Mountsier: 2:53

all, like, you know, teachers own on what vehicle they love to drive. I'm not like a massive fan historically of the drive style of Toyota. Just be honest. I love the drive of the Senate. Alright, so get past my personal biases. But even my wife she was the first thing she said was, Oh, do we have to buy a charger? Do I have to figure out where to plug this thing in? And then or the immediate relief and her to go? Oh, sorry, I'm gonna get 36 months. Yeah, so just

Zach Reed: 3:22

everyday life, you don't have to change your lifestyle, you're gonna reduce your carbon footprint, and you're gonna increase efficiency. And and the truth is using electric motors. I mean, we all know, we see a lot of the pure EVs out there and the performance, the performance is incredible. So we can kind of tie in some of that performance you get from electric motors and batteries, and time into our hybrids. And we're not only increasing efficiency, but we're also increasing performance over the standard gas engine. I think Tacoma is a good example of that. Out goes the V six and incomes this turbo four cylinder hybrid and TRD Pro and the trail runner, and we're increasing horsepower by, you know, almost 100 horsepower torque by 150 pound feet. So we're able to increase

Kyle Mountsier: 4:05

the communications guy.

Zach Reed: 4:06

Yeah. I get worn out a lot about numbers or my thinks I can memorize numbers.

Kyle Mountsier: 4:13

That's awesome. That's awesome. One of the one of the key things that a lot of new sources have been looking at in the numbers over the last, especially a year, as this question coming out of the pennant pandemic was, what are we going to do with supply when manufacturers say, here's the floodgates chips are back, we're manufacturing vehicles, here comes supply again. And Toyota has taken a little bit of a different approach as seen by it's still having what I think a 23 day supply in the US, right?

Zach Reed: 4:40

It's pretty large. So I think if we look at the beginning of the pandemic, we navigate it really well probably better than some other OEMs and then years, maybe 18 months, 24 months into the pandemic. They kind of passed us because they had the issues at the beginning and then we're able to fix it. And then we kind of had the trouble a little later on. So we're back. Now, when we look at our supply, hybrid supply is very, very low. We're at less than five days statistically around the country on a hybrid supply, but the gas supply, and that's just because of the built up demand. Yeah, people want hybrids, especially as they're feeling like if I have to get a BV, why don't I just get a hybrid now, but we're working really, really hard to build as many cars as we possibly can and increase supply as much as we can. And the demand is still there, which is great, because I know, you know, it's a little tougher to buy a car now than it was maybe two years ago with different with rates and that kind of thing. So, but we are doing everything we can to give every customer that walks into a Toyota or Lexus store the opportunity to get what they want.

Kyle Mountsier: 5:41

Yeah. Do you see demand still outpacing the ability to supply and

Zach Reed: 5:46

in some segments? In some segments? I think that you know, the well priced vehicles, I guess, if you will, under 50,000. hybrids and look at the rav4 hybrid, we can't keep up with demand there. We can't keep up with demand. Let's see. And I think the last thing I thought so a Sienna was on a more than one year waitlist right now. Wow. So we're having trouble meeting demand there. When you look at more of the expensive vehicles, like on the tour site, Tundra, maybe a couple of the Lexus's Yeah, it's a little, the demand probably isn't there as much because because of the price point because the rates and stuff like that, but we're doing everything we can to to keep stores stocked. You know, when we look at pre pandemic we were at, I think the the really perfect world was a 60 day supply. Yeah. And we'll get people, you walk into the lot, you can pick your color, you can pick your vehicle, I think there was too many, I don't think we'll ever get back to a 60 day supply. But the perfect supply would be about 45 days. And I think we're we're pretty close to it. And we'll try to get there. That's

Kyle Mountsier: 6:44

awesome. All right, I got to a little bit off the Toyota, what's your favorite car of all time?

Zach Reed: 6:50

Favorite car of all time? Like, I'm 100% car guy. So I mean, obviously the mark for Supra is it, I have never really really pushed it. So my last role I was in charge of Toyota cars, sedans and sport cars, sports cars nationally. So I launched the new Supra. And in that we have a 96 turbo that I was able to drive but not push the paces. And I would I would love to push this pace. It's there with that. Yeah, I would really like that. I'm also I love the off road stuff. Land Cruisers are I think, you know, 40 series Land Cruiser would be kind of a dream car. I have driven one and I've done it off road. It's a tough drive. It's a tough drive when you get when you get used to electric power steering. And it's got a four speed manual with a tough clutch and a long throw. So that's great. If you look at our current lineup, that the new Land Cruisers probably at the 250 series that will go on sale in a couple months. Yeah, excited about. Excited about the powertrain excited about the size, I think it just my opinion, I think linkers and Twitter series probably got too big, even the 100 series probably a little bit too big. Yeah. And bring it back down to a kind of a smaller, more nimble size where you can probably tackle a little more off road stuff and you could have in the 200 series is exciting for me. That's fun.

Kyle Mountsier: 8:17

Yeah. Guilliman. Yeah. All right. So last question. What's your hope for like the industry at large because you're on the OEM side, but obviously, there's a lot of care for Toyota at the dealer level, but also for the consumer, what's your hope over the next couple of years that the industry moves toward?

Zach Reed: 8:34

Yeah, so you know, electrified, power trains are the future and be EVs are absolutely the future. I think we'll get there as the consumer gets there. And my hope, and I'll just speak to Toyota and Lexus, I think if we go back 10 years, and if you look at the Toyota lineup 10 years ago, were you saying hey, I've never been a big toy, or the way they drive. We had a boring lineup 10 years ago, 15 years ago. So to see the new Tacoma new tundra Land Cruiser, we have the Supra and the GR Corolla kind of that enthusiast side. I just want to see people get more excited about cars, yeah, cars in general. And wherever that goes, and I hope that there are many

Kyle Mountsier: 9:19

I think we're in a moment I think, because there's so much focused on EV and hybrid and the technology involved in vehicles. We're at one of those pop called Pop Culture moments like in the 70s when the car was an extension of personality. Yep. And we're not coming back to that which is going to be real. I think you're I think I

Zach Reed: 9:36

just want people to be excited about cars, too. I hope more and more people look at it less as a mode of transportation and more as an extension of the family through I mean, as cheesy as that sounds like I just love. I love cars. I love people getting excited about cars wanted to talk about cars. So I hope it goes that way. And I do think you know, obviously reducing emissions with battery electric vehicles with hybrids with plug in hybrid. Whereas I think is, is the key and I hope we'll see where the consumer goes but will at Toyota and Lexus be where the consumer is continue to make great products.

Kyle Mountsier: 10:07

I love that statement. It's kind of we're kind of passionate about being loving people more than cars and being where the consumer is 100% Zach, thanks for joining.

Zach Reed: 10:16

Thanks so much for having me. Appreciate it.

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