TOKYO -- Toyota Motor will procure some of its electrical steel sheet from China Baowu Steel Group, China's largest steel supplier, Nikkei has learned.
Steel sheet is a high-performance product and a crucial electric vehicle material, the production of which requires sophisticated technology. Because high quality is critical, Toyota has mainly sourced it from Japan's leading steel-makers.
The deal is seen as a sign Chinese steel-makers, reliable suppliers of large quantities of general-purpose products, are catching up with Japanese rivals in terms of quality.
Toyota has not only approved the quality of China Baowu's steel sheet for use in hybrid and electric vehicles made in Japan, it is already taking delivery of the product.
It is believed to be the first instance in which a major Japanese automaker is using electrical steel sheet made by a Chinese company in passenger cars built in Japan.
Electrical steel sheet is magnetized through a special process. Its production requires sophisticated technologies, such as to remove impurities. The product goes into core components of electric vehicles, including motors.
The material is essential if motors are to operate efficiently. As such, it directly affects the mileage a vehicle can achieve. As high quality is key to the product, only a handful of steel-makers, including Nippon Steel, have been able to supply it to companies like Toyota.
