TOYOTA PILES INTO HYBRIDS-------Carl Schwab

Some of this information comes from an article appearing in the WSJ September 25, 2012. Toyota Motor Corp appears to be putting its full weight behind hybrids and perhaps placing a side-bet on the EV as well. Japan’s largest auto maker predicted it sales of hybrids world-wide will likely top one million this year and every year through 2015. Toyota’s most popular Hybrid, the PRIUS, is now offered in 5-different models.

While the rollout and forecast signal Toyota’s confidence in it hybrids, the company acknowledges cost must still be cut further to increase profitability and spur sales. “Profits from conventional (gas) powered cars are still higher, so we need to reduce hybrid costs more in order to promote diffusion”. Hybrids are becoming more main-stream in Japan. Toyota’s sales of gasoline-electric vehicles last year reached 310,000 or 26% of its total sales. But they remain a niche in other important markets, such as the U.S. Last year, Toyota sold 178,600 hybrid models in the U.S., just a fraction of the 1.64 million vehicles sold here in 2011.

The Japanese auto maker has high hopes for its “plug-in” hybrid, which can be filled at a pump OR by plugging in at a standard outlet. Cumulative sales for its PRIUS PHV reached 15,600 last month, including 8400 in Japan, and 6100 in the U.S. and 1100 in Europe.

While all this is going on, Toyota is introducing its “eQ” which is a pure EV and intended to compete directly with the Nissan Leaf. Toyota has decided to introduce the “eQ” to new customer candidates in blocks of 100. (no explanation why 100 was selected). Earlier this year, Toyota, announced plans to shift production of the HIGHLANDER SUV to a plant in Indiana. Core engine components---such as motors, batteries, and converters ---will continue to be exported from Japan. With this push into hybrids, Toyota is moving its manufacturing plants near to the respective markets and is engaging in a major construction effort to build assembly plants for hybrids nearer to the respective markets such as China and the U.S.

Toyota will begin sales of a compact SUV as an EV where it hopes to sell 2600 RAV4 as EV at $49,800 over a 3-year period. This prompts the question, “Why is the $49,800 so high?” The answer is, “It should not be EXCEPT for the exorbitant cost of the battery pack.” Basically the EV is less complex than a conventional ICE car and will cost less when the battery pack production is mature. Just now battery costs are impacted by EPA restrictions.

So is there anything profound about Toyota’s apparent business plan? I don’t think so---they have built a strong position and simply need to protect it.

INTERESTING--

Comments

[Howard Edelman]

I wonder if the LIRR recovers the train braking energy for reuse in some way. I wonder how much energy it could save and how that compares to overall train energy usage.

[Mark]

I call BS on: "Just now battery costs are impacted by EPA restrictions." If the cost of restrictions are way down on the cost drivers then this morphs into political axe grinding.

Granted that the regulation costs on a typical lead acid battery are estimated to be a few dollars. The problem here is that the packs in pure and hybrid EVs are NiMhd or Li-ion. Not lead-acid! For EVs lead acid packs are very poor performing batteries.

Please look at this report to get an idea of what the costs are:
http://www1.eere.energy.gov/vehiclesandfuels/pdfs/merit_review_2012/energy_storage/es111_gallagher_2012_o.pdf

The costs on the Tesla motor packs are not due to regulation - it's simply that they use a lot of very expensive batteries. The expensive part is not due to "regulations."