In 1936, a unit of the DKW compact passenger car (front-wheel drive) bought in Germany by Kazuo Kumabe, an assistant professor of the Tokyo Imperial University Faculty of Engineering, was delivered to the Shibaura Laboratory. The Automotive Department of Toyoda Automatic Loom Works decided to disassemble and sketch the vehicle and make drawings of it, with Eiji Toyoda in charge of the engine and Shiguma Ikenaga in charge of the suspension and other parts. This led to the prototype production of the EA small passenger car, which began in a section of the Kariya Assembly Plant from around June 1937.

When assembly was later transferred to the Koromo Plant, the prototype vehicle was left untouched at the Kariya Plant for a time, but in 1940 it was decided to produce engines and chassis at the plant's electrical components plant. For the vehicle body, a wooden model was created in the woodwork shop of an auto body plant also located at Kariya, and ten prototype units of the EA small passenger car were completed.

Meanwhile, the Tokyo Shibaura Plant developed the EB small passenger car by converting the EA into a rear engine/rear drive (RR) format, while the Kariya electrical components plant created the prototype of the EC electric vehicle using the chassis of the EA. The specifications of the EA small passenger car are shown in Table 1-9.

As the manufacture of compact passenger cars had been prohibited as of August 4, 1938 by a notification of the Ministry of Commerce and Industry, these development projects progressed no further than the prototype stage. 1