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> they no longer have the engineering prowess to compete

That's not nearly the case. They have made one of best EVs back in years, but decided to focus on hybrids. And that makes total sense.

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To compete in EV, one has to compete also in battery manufacturing. Increasingly Japan is unable to keep up with China and even Korean manufacturers. Panasonic is still in the race due to their decades lead, but its market is largely shrinking. Once China took over batteries, it would have been unlikely for Japan to take the EV market, just like Sony. Same with most American EV manufacturers who are unable to compete, even with closed off large American auto market, that Japan has no access to. As rapidly shrinking Tesla marketshare world wide suggests, competing with Chinese makers is hard.

They can purchase the battery technology, just as many manufacturers already do.

I hate to be a luddite, but they also don't need to be pioneers to succeed here. They need cars that meet their customers needs, just like not every ICE car needs to have an F1 racing engine in it.

For that they need captive market that keeps China out to get the kind of marketshare they enjoy now, otherwise chinese makers will sweep in and dominate the market. Or another option is to just take Chinese EVs and rebadge them, like some manufacturers are doing.

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