Vehicle Program Timing & Conceptual Design: A Worked Example

As a worked example, consider a hypothetical redesign of the current-generation Toyota Sequoia. The Toyota Sequoia is classified as a sport utility vehicle (SUV). An SUV is a combination of a passenger car with the features of an off-road vehicle. In the US, SUVs are categorized as “light trucks,” so regulations on these large vehicles are a lot more lenient compared to passenger cars. Based on competitive benchmarking, the overall size and proportions of a redesigned MY26 Sequoia would need to be not only competitive but also stand apart from its competitors. This example walks through both halves of that work: how the vehicle itself was conceptually designed and packaged, and how the program that delivered it was timed and managed.

Vehicle Program Timing and Development Gateways

The program timing plan is built around having the vehicle ready for the 2026 model year. To meet that target, Job #1 (the first day of regular production) is set for the first Monday in August 2025, August 4th, with all other key gateways planned around that date.

In automotive product development, these checkpoints are usually called program gateways or milestones. Every OEM uses its own naming convention (Ford’s framework, for example, is called GPDS, or Global Product Development System), but the same handful of checkpoints show up industry-wide, just under different labels. Some of the most common gateway terms you’ll come across are:

• V0 — the first prototype build, used to validate initial concept and packaging assumptions before design is locked down.
• V1 — a design-validation build, closer to production intent, used to confirm the design meets engineering requirements.
• FDJ (Final Design Judgment) — the point at which a component or system’s design is considered final and ready to move into tooling.
• PEC (Product Engineering Completion) — confirmation that engineering work on a system is complete and ready for manufacturing sign-off.
• FEC (Final Engineering Completion) — the last engineering gateway before Job #1, confirming every system is ready for production.

Figure 9 below details the program timeline for these key gateways in relation to the systems engineering V-model discussed in Bhise (p. 352) — the same V-model framework we cover in more depth in our guide to the automotive product development V-model.

What-if planning: program timing plans aren’t set in stone once they’re published. Engineers and program managers routinely run “what-if” scenarios against the timing plan — what if battery cell costs rise 10%, or what if a gateway slips two months — to see how that ripples into every downstream milestone and into the program’s financial case. The cost and sales-volume sensitivity built into this program’s financial plan (see Program Development Cost, below) is exactly this kind of what-if analysis in practice.

Vehicle Design and Packaging

Figure 1 and Figure 2 are general assembly schematic representations that show the overall size of the vehicles and the occupant positions. Very quickly you’re able to see major improvements in the design based on customer ratings and design requirements. Some of the key enablers of the design are:

• 3-row passenger room improvement.
• Aerodynamic performance.
• Dynamic spoiler.
• 105 kWh battery pack.
• Full-size spare tire.
• Improved cargo volume with the introduction of front storage (frunk).

Overall Exterior Dimensions

For the MY2026 Toyota Sequoia, the redesign maintains a similar exterior vehicle layout to the current generation, while improving interior cargo volume and occupant packaging. Figure 3 shows the vehicle envelope with locations of wheels, front and rear overhangs, as well as main exterior dimensions such as overall height (H103), width (W103), and length (L103), approach angle (A106-1), departure angle (A106-2), and ground clearance (H156). The overall vehicle layout was redefined to provide maximum protection to the high-voltage battery pack located at the bottom of the vehicle (Figure 6).

Dimension (in.)	2020 Toyota Sequoia	2026 Toyota Sequoia BEV
L103	205.1	209
H103	77	76
W103	79.9	79
W101	122.2	121
L104	34.8	34
L105	48.1	48
W101-1	67.9	67
W101-2	69.1	68
A106-1	27	23
A106-2	21	21
H156	9.9	9

Vehicle Package

The redesigned MY2026 Toyota Sequoia shows a noticeable improvement in 3rd-row occupant leg and headroom without sacrificing storage or cargo volume. With the removal of the front engine and the introduction of a high-voltage battery above the floor, the design opens up extra storage space at the front of the vehicle, commonly known as a “frunk.” Table 2 lists the main occupant dimensions from the current vehicle and the redesigned Toyota Sequoia. Figure 4 is a representation of the occupant compartment basics and the basic steps for design, a process covered in more depth in our guide to vehicle package engineering:

• Locate the vehicle floor.
• Locate firewall / cowl point.
• Determine seating reference point for each passenger (SgRP).
• Locate the steering wheel.
• Locate available headroom.
• Locate storage and cargo volume areas.
• Locate the position of the powertrain: high-voltage battery.
• Locate spare tires, if any.
• Locate the ground line and minimum ground clearance.
• Locate ankle position.
• Locate the gas pedal.
• Driver’s hand reach reference plane (SAE J287).

Dimension (in.)	2020 Toyota Sequoia	2026 Toyota Sequoia BEV
1st Row Headroom	34.8	42.5
2nd Row Headroom	34.9	40
3rd Row Headroom	34.5	40
1st Row L33	42.5	43
2nd Row L33	40.9	42
3rd Row L33	35.3	38
Cargo Room	120.1	135

Vehicle Envelopes

Figure 6 shows the designed opening of the front door, rear door, and lift gate opening (B&R lines), as well as the required rear quarter window. The steering wheel can be seen inside, and in top view, how it aligns relative to the front wheels and windshield. The top view of the vehicle also gives a visual of the position of the spare tire, front and rear electric drive module, and size of the high-voltage battery.

The components shown in Figure 6 represent some of the hard points of the vehicle, and their dynamic and static envelopes need to be considered while designing the components around them.

Market Trend by 2026

According to a New Research study, the worldwide SUV market size is projected to reach USD 2,899.5 million by 2026, from USD 2,822.9 million in 2020, at a CAGR of 2.5%. Out of all the cars sold in 2019, 3.7% of the worldwide share was captured by pickup trucks. This study suggests the customer base is moving toward the large SUV segment, as drivers enjoy the feel of the higher, more comfortable driving position of sporty new SUVs. This mindset and ever-increasing market demand is the kind of opportunity automakers are looking to capture. As the industry and consumers profess to be excited about electric vehicles, a growing number of drivers are switching from passenger cars to beefier, fuel-guzzling SUVs. Automakers are bringing a greater variety of crossovers, trucks, and SUVs to market, eager to capitalize on rising demand with vehicles that are very profitable to sell. Focusing on this trend, this concept vehicle incorporates the performance benefits of conventional vehicles and hybrids by introducing a best-in-class, battery-powered, full-electric, large-sized SUV, while still keeping all the practical aspects of a full-size SUV.

As part of the preliminary design stage and benchmarking process (see the companion vehicle benchmarking example), the market segment was studied to determine who the target audience would be, how much those customers would be willing to pay for a full-size SUV, and what they’d expect in a new SUV. That research also gauged how enthusiastic customers were about an all-electric full-size SUV, and how comfortable they’d be making the switch from a conventional ICE vehicle to a BEV. This is also where a process like Quality Function Deployment (QFD) comes in, translating what customers say they want into specific, measurable vehicle targets. The target customers identified from that survey are listed below:

Target Customers

• Customers’ age range — middle age (30-50).
• Unmarried customers for daily work commutes, long drives, and adventure trips.
• Married customers with family who enjoy adventure, take long drives, but will also use this as a daily driver.
• Customers looking for basic camping trips, holding luggage like bicycles, and carrying heavy equipment.
• Customers who need to drive through varied terrain and enjoy occasional off-roading capability.

The Toyota Sequoia fits into the current trend of SUVs, so its customers are expected to use it mainly as a family vehicle. The target customer would be parents (both male and female) aged between 30 and 50 years old. Since the average American family size in 2019 is 2.6 people per household, the customer will most likely be accompanied by more passengers most of the time, and will need to carry passengers and sufficient luggage with minimal compromise. The vehicle is also targeted toward adventurous individuals who enjoy occasional off-roading. The redesigned Sequoia would aim for better range than all EVs currently on the market and a 0 to 60 acceleration in 3 seconds, all without compromising torque or legroom, while remaining capable of light off-roading. This gives the vehicle sufficient yet subtle flexibility. The inclusion of an electric drive instead of a conventional ICE increases off-road traction, since it has higher low-end torque, aiding off-road traction and wheel speed. Going all-electric as a large BEV SUV is the most exciting part of the program, since it would be first in class as of the program start date, but it also comes with its own share of uncertainty, given the major trade-off between battery sizing and towing capacity.

Sales Projection

Sales for SUVs and pickup trucks have been rising at the expense of sedans, and the trend is expected to continue as OEMs shift their focus toward developing more SUVs and trucks to meet consumer demand. With the proposed design and cost analysis, the entire timeline for actual vehicle production starts 40 months earlier, and the program is spread across a 100-month plan from cradle to grave. The entire cost estimated in the pre-production phase is $20,200,316.48, considering inflation and the estimated number of vehicles sold. Five years after the first Sequoia rolls off the assembly line, the program is projected to have earned a profit of $906,200, with each vehicle sold generating an estimated profit of about $9,725. The program is set up to reach a very early break-even point based on the demand this EV Sequoia MY2026 is projected to create in the market, with a 7-month timeline forecasted for break-even.

The sales data is based on the growth of the SUV segment over the last 6 years (2016-2020), specifically the Toyota Sequoia in the US market. Total sales made per quarter over the last 6 years averaged around 3,500. There’s a clear declining trend in this SUV’s sales, with the best numbers in 2005 (45,000 units sold that year) trailing off toward the start of the pandemic, when Toyota sold as few as 200 Sequoias in March 2020. The sales projections account for inflation rate, auto-sector growth, and manpower costs. The new MY26 Sequoia would bring a much-needed refresh to the current generation, positioned as the first BEV in the full-size SUV segment at a competitive price of $51,000. Monthly sales are projected to reach around 15,000 units once the model gains popularity and hits peak sales, considering the global market rather than the US alone — though the detailed timeline and cost analysis show that number is reached gradually. These figures were benchmarked against the Ford Expedition (the reference vehicle), which had quarterly sales of about 12,000 to 15,000 units in the US market alone.

Quarter	2015 CY	2016 CY	2017 CY	2018 CY	2019 CY	2020 CY
Q1	2,811	3,005	3,437	2,828	2,410	1,408
Q2	3,281	3,292	2,774	2,613	2,154	1,120
Q3	3,207	2,837	2,788	2,664	3,019	2,205
Q4	3,284	3,637	3,157	3,016	2,706	—

To keep demand high and maintain a steady cash inflow, the plan is to release mid-cycle upgrades and special editions at the halfway mark of the program, roughly 4 years in. This mid-cycle refresh would incorporate additional features such as an SLA suspension with height control, driver-assist features like a proprietary level 3-4 autonomous driving capability, an exterior front facelift, a special edition interior, and a sports performance package.

Selling Price

There are two ways to determine the MSRP of a product. The first is the traditional cost-price-plus approach, and the second, more modern method is the sales-price-minus method. The MSRP for this example was determined using the sales-price-minus method.

From the earlier benchmarking, the price of the 2020 Ford Expedition (reference vehicle) was $52,130, the Chevrolet Tahoe (competitor vehicle 1) was $48,000, and the Nissan Armada (competitor vehicle 2) was $47,100. After factoring in market research, an assumed 2% annual inflation rate, and an 8% interest rate, the MSRP of the Toyota Sequoia EV MY2026 is set at $51,000. The financial analysis behind that figure is based on three factors kept in mind while projecting the sales figures:

1. EPA and NHTSA regulations regarding new emissions proposed during 2023.
2. Inflation rate, keeping in mind current market trends and the growth of the automotive sector in the US.
3. The current SUV market segment trend, where estimated growth is predicted to be around 25%, with an increase of 5.64% from 2023.

Description	Percentage, %	Cost, $
Manufacturing Cost (Tooling)	8	$4,080.00
Raw Materials	23	$11,730.00
Overhead Cost	6	$3,060.00
Profit for Dealers	7	$3,570.00
Profit for Company	17	$8,670.00
Safety Cost (Internal & External)	5	$2,550.00
After Sales and Service	3	$1,530.00
Labor Cost	14	$7,140.00
Sales and Marketing	4	$2,040.00
Taxes	13	$6,630.00
Total Cost	100	$51,000.00

Program Development Cost

For this business plan, white-collar employees are assumed to be paid $45 per hour, and blue-collar workers around $28 per hour across a 25-day work period split into 2 shifts. Manpower, tooling, and service costs run into the millions of dollars once totaled across the program. Vehicle sales are estimated at around 12,000 units per month once the vehicle launches, with sales expected to grow year over year through the first few years of production as the model gains traction in the market. This growth trajectory would mark the vehicle establishing itself before the next model refresh. Based on the projected cost analysis, reaching sufficient sales volume in the first year is central to the program hitting its projected break-even timeline.

Cost Summary Graph

Cumulative Cost, Revenue and Cash Flow Graph

Frequently Asked Questions

What is a vehicle program gateway?

A vehicle program gateway is a formal checkpoint in the vehicle development process where a program has to prove it has met specific engineering, design, or manufacturing criteria before moving to the next stage. Common gateways include V0 and V1 prototype builds, Final Design Judgment (FDJ), Product Engineering Completion (PEC), and Final Engineering Completion (FEC).

What does Job 1 mean in automotive development?

Job #1 (sometimes written Job One) is the date the first regular-production vehicle rolls off the assembly line. Every other gateway in a vehicle program’s timing plan is typically scheduled as a fixed number of months before or after Job #1.

What is GPDS in automotive engineering?

GPDS (Global Product Development System) is Ford’s name for its internal vehicle development and program-timing framework. Other automakers use different names for a similar underlying process; the specific gateway names vary, but the general structure of concept, design validation, and engineering sign-off before Job #1 is common across the industry.

What is what-if planning in vehicle program management?

What-if planning is the practice of modeling how a change — a cost increase, a supplier delay, a shifted gateway date — would affect a vehicle program’s timing and financial plan before that change actually happens. It lets program teams see the downstream impact of a risk and prepare a response instead of reacting after the fact.

How is a vehicle program’s break-even point calculated?

A vehicle program’s break-even point is the point at which cumulative revenue from vehicle sales equals the cumulative cost of developing and producing the vehicle, including tooling, manpower, and manufacturing costs. It’s typically shown as a cumulative cost-and-revenue chart, with break-even at the point the two lines cross.

References

1. Automotive Product Development: A Systems Engineering Implementation, by Vivek D. Bhise. ISBN: 978-1-4987-0681-0. Publisher: CRC Press, Boca Raton, FL: CRC Press, 2017. (APD)