TOKYO – Subaru will team with Toyota on three new all-electric crossovers it has planned through 2026 as the small-sized Japanese player tries to minimize its risk in an electric-vehicle market that is cooling off but still requires massive investment in new technology.
“At the moment, it is quite difficult to predict how things will go from here with EVs,” CEO Atsushi Osaki said on Monday while announcing a 75 percent surge in fiscal year operating profit.
“There is a huge risk for us to go it alone in this field,” Osaki said. “We have held talks with Toyota and have agreed that it is better to reduce risks through joint development.”
Osaki also wavered on potential plans for Subaru to produce its own EVs in-house in the U.S.
“I have not said that we would do BEV production at our own plant in the U.S.,” Osaki said. “As the market changes considerably, we will proceed while studying the situation carefully.”
Having Toyota build Subaru’s EV locally in the U.S. buys Subaru time, while still allowing Subaru to qualify for federal EV tax credits under the Inflation Reduction Act.
As a bridge to that new EV lineup, Subaru will meanwhile deploy its next-generation hybrid system to its Crosstrek crossover in addition to the Forester.
To better supply the popular Forester – the brand’s best-selling nameplate in the U.S. – Subaru will also add production of both the hybrid Forester and the traditional gasoline version to the company’s Indiana factory.
They will also be manufactured at its main production hub in Japan.
U.S. sales of the Forester rocketed 60 percent to 48,546 units in the January-March quarter.
Localized U.S. production of the next-generation hybrid system will start around 2026.
Subaru currently imports the Forester from Japan. But it announced in April that it was ending U.S. production of the Legacy sedan after the 2025 model. That opens room for the Forester.
Given uncertainty in U.S. EV demand, cooperation with partners is prudent, Osaki said.
“Through this approach of joint development, joint production and joint supply, we will ensure flexibility in the areas of development and production while mitigating risks with Toyota at a time when it is difficult to clearly predict future trends,” Osaki said.
“While we have steered toward EVs, we find it important to sell internal combustion products at the same time,” Osaki said. “So, we already have plans to expand our hybrid product lineup.”
Osaki outlined the new electrification plans on Monday while releasing a slate of stellar fiscal-year earnings results that fill Subaru’s financial war chest with funds for new product development.