Toyota, Subaru shares drop on recalls of their first EV models

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Shares of Toyota Motor Corp and Subaru Corp dropped on Friday after the two Japanese car makers announced recalls of their first mass-produced electric vehicles (EV) for the global market because of a risk the wheels could come loose.

The recall by Toyota of 2,700 units of the bZ4X SUVs, rolled out less than two months ago in Japan, is a setback to the world’s largest automaker by sales, as it seeks to take on larger EV rival Tesla Inc.

Also read | Toyota pauses most Japan production after quake

A Toyota spokesperson said on Thursday not every model was subject to the recall but declined to say how many it has built overall.

Subaru, in which Toyota has a nearly 20 per cent stake, also said it was recalling globally about 2,600 units of the Solterra, its first all-electric vehicle jointly developed with its top shareholder.

Watch | Toyota recalls its first mass-produced EVs less than 2 months after the launch

Japan’s safety regulator said sharp turns and sudden braking could cause a hub bolt to loosen, raising the risk of a wheel coming off the vehicle. It said it was not aware of any accidents being caused by the defect.

Subaru shares slumped nearly 5 per cent and Toyota’s were down 1.6 per cent.

Once a favourite with environmentalists for its popular hybrid Prius model, Toyota has come under fire for not acting quickly enough to phase out gasoline-powered cars and its lobbying on climate policy.

Also read | Toyota apologises in settlement over harassment suicide

The company has repeatedly pushed back against the criticism, arguing the necessity to offer a variety of powertrains to suit different markets and customers.

Gasoline-electric hybrid models remain far more popular in Toyota’s home market than EVs, which accounted for just 1% of passenger cars sold in Japan last year, based on industry data.

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