We've been overloaded by multiple out-of-town trips and events, so we're again in catch-up mode for CalCars-News.

Below we report on the following news from Toyota:

1. A Reuters report that Toyota will make as much money selling hybrids as non-hybrids in 2010. And, equally important, in 2020, all of its cars will be hybrids. This story has been picked up broadly. It's not a direct quote, but it is very important confirmation of last year's controversial but prescient Alliance Bernstein analysis http://www.calcars.org/­calcars-news/­493.html, that 85% of new cars and 72% of the entire global automobile fleet in 2030 will be HEV or PHEV. The report also discusses new electric battery ventures by Nissan and Mitsubishi that could increase the options available to manufacturers of hybrids and all plug-in cars. (The Reuters report goes on to quote Executive VP Takimoto saying that PHEVs are many years away.)

2. A detailed report from the May 7 Cascadia Conference in Redmond, WA, on the presentation by Bill Reinert, National Manager, Advanced Technologies Group, Toyota Motor Sales USA, which outlines many of the reasons why Toyota is in the same boat as GM on PHEVs: committed to production, but not until the company can be sure that even the first batteries for the first cars will last the lifetime of the car. (Reinert was introduced by a Washington State Toyota dealer who announced that the Prius is the highest selling car in the Pacific Northwest.)

3. Toyota North America President Jim Press predicting that our children will drive multi-fuel PHEVs ten years from now.

4. Excerpts from an interview with the company's national service technology manager, Gary E. Smithl, about lithium batteries published on the Toyota website ,

TOYOTA CITY, Japan, May 10 (Reuters) - Toyota Motor Corp. expects to cut costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, a top executive said on Thursday.

Japan's top automaker has been keen to see the fuel-saving powertrain enter the mainstream since launching the Prius, the world's first hybrid car, in 1997, but sales have come at the expense of profitability given their high production costs.

But Masatami Takimoto, executive vice president in charge of powertrain development, said cost-cutting efforts on the system's motor, battery and inverter were bearing fruit, and the cost structure would improve drastically by the time Toyota reaches its sales goal of one million hybrids annually in 2010 or soon after.

"By then, we expect margins to be equal to gasoline cars," he told Reuters in an interview at Toyota's headquarters in Toyota City, central Japan.

If it succeeds, Toyota, on its way to becoming the world's biggest carmaker, will be removing the main hurdle to cost-competitiveness for the hybrid -- the expense of the powertrain, which twins a conventional engine with an electric motor. It will also likely widen its sales lead as more consumers seek better mileage amid rising fuel costs.

Data this week showed U.S. gasoline prices at an all-time high above $3 a gallon, and Takimoto said he expected energy prices to continue rising.

Toyota likely achieved cumulative hybrid sales of one million units this month, having moved 998,900 by the end of April. By 2020, Takimoto said he expected hybrids to become the standard drivetrain and account for "100 percent" of Toyota's vehicles.
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BATTERY BREAKTHROUGH

Eager to match Toyota's green image, domestic rival Nissan Motor Co. announced plans last month to form a joint venture with electronics giant NEC Corp. to mass-produce lithium-ion batteries to be used in environmentally friendly vehicles such as hybrids and plug-in hybrid cars.

Mitsubishi Motors Corp. followed this week with a similar plan, partnering GS Yuasa Corp. and Mitsubishi Corp.. Both ventures want their batteries to become the de facto standard for the auto industry.

Takimoto said Toyota had been approached by both parties as well as many other battery makers, but dismissed their products as "unusable" due to their low energy density.

"Our battery is still superior," he said. He added that plug-in hybrids, which can be recharged through an electric socket, were still years away from practical application and pure electric vehicles even further out because even with a trunk full of rechargeable batteries, they would have a cruising range of just 60 km (37 miles).
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See our report on an earlier speech by Masatmai Takimoto http://www.calcars.org/­calcars-news/­571.html.

Introducing Toyota's Bill Reinert was Buzz Rodland, owner of Rodland Toyota of Everett, past chairman of the American International Automobile Dealers Association. Rodland announced that after eight years during which the #1 selling car in Pacific Northwest was the Toyota Camry, now, in that five-state area, the Prius is the #1 selling car.

Bill Reinert is National Manager, Advanced Technologies Group, Toyota Motor Sales USA. (He appeared memorably him in the film, "Who Killed the Electric Car.") Reinert gave a very thoughtful and wide-ranging presentation, "35 steps toward Sustainable Mobility." You could print out the presentation from http://www.discovery.org/­scripts/­viewDB/­filesDB-download.php?command=download&id=1345 (PDF-2MB), then view the video stream of Reinert's talk at http://www.tvw.org/­MediaPlayer/­Archived/­WME.cfm?EVNum=2007050025A&TYPE=V (fast forward about halfway to get to him.) .

Reinert covered the declining availability of oil and the greenhouse gas and energy intensity tradeoffs between various fuels and gave a good picture of the priorities of the company.

Mostly he came prepared to talk about plug-in hybrids: he spent almost half of his time on PHEVs. Slide 20 began by stating "Toyota's Basic Philosophy: "Do what we can 'today for tomorrow.' Develop innovative technologies for the future while continuously improving the mainstream technologies of today." (At this point, given what we've been saying about not making the perfect the enemy of the good, we had to wish that Toyota truly would begin immediately with what it understands is its future!)

Reinert described Toyota's sequence of goals as clean gasoline emissions, energy diversity and CO2 emissions, though he said they are working on them in parallel. In slide 23, he predicted a continuation of the previous 30% improvement for each Prius generation, saying, "you can do the math for the next generation in 2008-2009." Preparing the groundwork for the reasons Toyota won't build PHEVs now, he said "the average customer" won't accept compromises.

He presented two major types of PHEVs: first, ones with all-electric range, citing the Volt and "some of the conversions." He then confirmed the company is working on "blended" PHEVs, where battery power covers the most inefficient part of the internal combustion engine's operation, which he said would enable them to extend the battery's life. (This topic will become increasingly important. We hope Toyota will plan blended hybrids with an all-electric low-speed capability, as do all current Prius conversions. Even people who love that we can get 100+MPG on the highway are most excited by the silent, all-electric driving under 35 MPH. While PHEV advocates have no absolute position about blended hybrids, we worry that if Toyota introduces PHEVs that have NO electric-only mode, even at low speeds, this could set the stage for a consumer disappointment and product failure. Especially if Toyota is competing with the GM Volt, drivers will want to be able to make at least their slow and short neighborhood trips without using any gasoline. Fortunately, Toyota's Hybrid Synergy Drive is designed to enable an EV mode.)

Reinert's slide 28 illustrated the best features of different vehicle types, interpolating the PHEV into a chart that didn't include them as a category, but showing they could have the best combination of features. He complimented the conference on Cascadia's PHEV Briefing Book" saying it was "really good, Felix must have helped write that." (Actually, "Electrify Transportation," published in January 2007, was written by Richard Feldman, formerly at the Apollo Alliance, now at the Seattle Mayor's office, and Patrick Mazaza from Climate Solutions.) Slide 30, as in other reports, misleadingly compared average CO2 numbers for PHEVs by country against hybrids instead of against all-gasoline cars. This perpetuates the assumption that we're building cars that will all run on today's energy mix. As our regional and national energy supply increasingly derives from renewable sources, today's unquestioned greenhouse gas superiority of PHEVs over gasoline cars will increasingly leave behind hybrids that can't plug in.

On batteries, he showed in slide 32 how time and cost increases as development and testing progresses from cell to modules to full packs to real-world experience. Citing issues of safety, durability (batteries that last the life of vehicle) and the need for reliability at least equal to nickel-metal hydride batteries, plus cost, and end-of-life recycling, he confirmed that Toyota intends to get experience with lithium-ion batteries in hybrids before it builds PHEVs. (He did not acknowledge the new factor of vehicle-to-grid both in economic issues and in secondary uses for older batteries replacing recycling.)

Saying we can get there, but it will long and tough, Reinert presented statements in slide 33 by analyst Menachem Anderman indicating that batteries for PHEVs could be many years away. (If we had tracked Anderman's statements in recent years the way we have those of carmakers, we'd all see that he has already retreated from unequivocal rejection of PHEVs to "10 years away;" he will probably be playing catch-up even as the first PHEVs arrive.) Reinert's slide 34 urged a unified approach between government and manufacturers on battery research, testing and standards. He concluded by noting pointedly that political choices will have to be made between energy sources that improve energy security, like coal, and ones that address climate change.

In the Q&A, he repeated that "renewable" is not sustainable. (This issue is moving to center stage in energy policy discussions: "alternative fuels" can include disastrous solutions such as oil from coal or tar sands. "Renewable" can include ethanol from corn, which has only a small positive energy balance, raises the price of food, and uses immense amounts of water. "Sustainable" is the most useful metric.)

When asked, are batteries ready yet, he said flat-out "no." He cited lifecycle challenges for deep-discharging PHEV batteries. He said he was "not so concerned about cost challenges: we might be able to internalize that." (In other words, Toyota could absorb initial high internal costs for batteries before large-scale production.) But most importantly, he insisted, "We need to give you all the batteries that you would expect to get in a car, that's 100,000 or 150,000 miles. Felix and I might differ on that -- Felix and I were talking the other day -- but we don't expect the battery and the battery maintenance to be part of the ownership cost of your car. It's not in today's Prius and we wouldn't expect that in the future. (We've often addressed this issue; for our response, see the next CalCars posting: our testimony to the Air Resources Board.)

In response to a question about the combination of solar rooftop charging and plug-in hybrids (displacing gasoline is an especially good way to offset the cost of photovoltaics), he said it was not practical in the Pacific Northwest -- the cost-performance would not be high enough.

In the final question, by Steve Lough of the Seattle Electric Auto Association, when asked why the company would not consider using nickel-metal hydride batteries (given that those in the Toyota RAV4 EVs have lasted over 100,000 miles), he said that because of NiMH's lower energy density, the size of the batteries means they couldn't be packaged to allow crush space and room for fold-down seats and spare tires. He said "believe me, it's an easier deal; if we could have done it, we would have done it."

Toyota Motor Corporation indicated recently that the company would migrate to lithium ion battery technology for its future hybrid vehicles. Hybrid Synergy View visited with Gary E. Smith, national service technology manager at Toyota Motor Sales, U.S.A., Inc., about lithium ion technology.

Q: Would arrays of off-the-shelf consumer-type lithium batteries work for this purpose? GS: It's possible. However, that is a significant compromise. Some of the earliest non-U.S.-specification Prius cars had racks of rechargeable D batteries, the kind you'd use in a flashlight. These were bulky and were not optimized for the specific use case. So the battery makers optimized the design and formed them into wafer-style packs/collections that make up today's Prius battery packs. I'm sure the lithium ion packs that the battery makers come up with for hybrid cars will likewise be optimized for the special demands that come with automotive use.

Q: Are there important differences between lithium ion and lithium ion polymer batteries? GS: Lithium ion batteries contain a gelatinous material; lithium ion polymer batteries -- usually called lithium polymer -- have the lithium ions deposited on a hard, polymer material. The particular "recipe" that the battery makers will select for hybrid traction batteries will depend on the battery's configuration, placement and desired service life as well as on the demands of constant charging and recharging.

Q: How would today's Prius have to be changed to accommodate lithium ion batteries? GS: The difference would be mainly in the battery management system that regulates the charging and discharging processes.

Q: How do the costs compare to nickel-metal hydride batteries? GS: I would expect the first lithium ion traction batteries to be more expensive than today's nickel-metal hydride types, but when they get into large-scale production, their costs will continue to get lower.

Q: Would lithium ion batteries be required if Toyota develops a plug-in hybrid? GS: If not required, certainly desirable. The same energy density advantages would be especially beneficial to plug-ins, which would impose greater demands during all-electric range.

Q: Is lithium ion the solution? GS: Lithium is certainly what's next in this type of energy storage. I am optimistic that lithium will offer compelling advantages in weight, size, cost and range that will have a positive effect on the ownership experience in future hybrids, plug-ins or electric vehicles.