Toyota Lowers Troublesome Electric Vehicle Leasing Rate to Increase Demand

On Wednesday, Toyota Motor (NYSE:TM) Corp. began leasing orders for its first mass-produced electric vehicle (EV) in Japan, eliminating a one-time fee to promote interest in a car that was recalled two months after its market launch.

In its home market, where consumers prefer not to worry about battery life and resale value, the bZ4X crossover is only available for leasing.

When it debuted the vehicle in May, Toyota charged a one-time application fee of 770,000 yen ($5,175) and 107,800 yen each month for the first four years of a 10-year contract.

On Wednesday, the application fee will be 385,000 yen and the monthly fee will be 1,100 yen. KINTO, the Toyota business that leases, president Shinya Kotera said early signups get a discount.

He added that the EV will be available for commercial lease starting Wednesday.

The pricing is "painful" and unlikely to boost sales, but KINTO will still make a profit, the former Toyota executive told Reuters in an Oct. 19 interview that was released Wednesday.

After discovering that quick corners and sudden braking could lose a hub bolt, the company recalled the bZ4X and stopped production two months after its sale. Production resumed October 6.

The model was the centerpiece of a late global EV plan by a corporation once lauded by environmentalists and green investors for its groundbreaking hybrid petrol-electric technology but now ridiculed for its late adoption of all-electric vehicles.

On Monday, Reuters reported that Toyota is considering a new start one year into its $38 billion electric vehicle (EV) plan to compete in a market growing faster than expected.

Due to the recall and a cautious approach to electric vehicles in a country without charging infrastructure, Kotera said Toyota would struggle to lease 5,000 bZ4X crossovers in the current fiscal year.

"I don't believe we are in an environment where people would rush at the chance to purchase the bZ4X," he said. Thus, we must persevere.