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

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 (EVs) 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.

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% 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.

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 caused by the defect.

Subaru shares slumped nearly 5% and Toyota's were down 1.6%.

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.

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.