Late last year, Toyota announced it would slow development of some products due to concerns about maintaining quality levels. We wondered then if this would apply to the "next-generation" Prius (since one generation was sold only in Japan, that would make it Prius version 4), expected for Model Year 2009 in fall 2008. Even since then, Toyota has said it would include lithium batteries, and we all hoped it might include plug-in capabilities (see http://www.calcars.org/­carmakers.html).

A few weeks ago, reports circulated that Toyota would delay the introduction of lithium batteries in the Prius. But a June 7 AP story about Toyota's reaching its milestone of having sold one million hybrids, said "Mitsuo Kinoshita, a senior Toyota executive, recently denied Japanese media reports that Toyota had given up on having a lithium-ion battery system for the next-generation Prius. "We're still working on it," he told reporters. http://www.chron.com/­disp/­story.mpl/­ap/­fn/­4872579.html

Today's Wall Street Journal reports that lithium is out for the 2009 model because of unresolved issues with thermal management. Its chief automotive reporter cites sources saying Toyota President Katsuaki Watanabe made the call. Toyota will instead use "more advanced" nickel-metal hydride batteries. (NiMH has lower energy density than Li-Ion, and the price of the raw materials has risen sharply in recent years. But they are fully proven and have minimal safety issues.)

We imagine the company will make a formal statement. Meanwhile, this means two things:

First, there is clearly plenty of life left in NiMH -- and if Toyota wanted to, there's no reason the 2009 Prius or the "Prius derivative" station wagon described in the WSJ couldn't be a PHEV with a substantial electric-only low-speed range.

Second, as the WSJ story says, this improves the chances that GM will be first with a PHEV Volt or VUE. (And, since all carmakers watch each other closely, this could prompt some reasoned voices within GM to take more seriously the suggestions that Version 1.0 of GM's first PHEVs could get to market sooner with NiMH than with Li-Ion.)

We include the WSJ story below. It's followed by a USA Today report on the evolution of Toyota's goals for introducing hybrid models. The slowdown described (one-third of 35 vehicles will have a hybrid option around 2010) doesn't necessarily conflict with the May statement by Toyota's Masatami Takimoto that all its cars will be hybrids by 2020. The article says Toyota is also looking at diesel hybrids -- no mention of flex-fuel hybrids, which have problems meeting low pollution standards because of evaporative emissions.

Toyota Delays Use Of Lithium-Ion Batteries In New Prius Hybrids By Norihiko Shirouzu norihiko.shirouzu@... Wall Street Journal, June 13, 2007 12:42 a.m. http://online.wsj.com/­article/­SB118170827719833687.html?mod=googlenews_wsj

TOYOTA CITY, Japan - Toyota Motor Corp., alarmed by growing concern over the safety of lithium-ion battery technology, has decided not to use that technology for the initial versions of the next-generation Prius gasoline-electric hybrid car, whose launch was scheduled for the autumn of next year, according to individuals familiar with Toyota's product plans.

The move, those individuals said, is aimed chiefly at dealing with potential problems with the application of lithium-ion batteries in the redesigned Prius - a new technology that packs more electricity in the same space and weight than the nickel-metal hydride batteries used in nearly all hybrid vehicles sold today.

Toyota had hoped the new battery technology would allow its engineers to halve the size of the current hybrid propulsion system using nickel-metal hydride batteries, thereby making the hybrid substantially cheaper and more fuel-efficient. The kind of lithium-ion battery technology that was under consideration for use in the Prius - one based on lithium cobalt oxide -- has shown a tendency to overheat and catch on fire -- a problem that has bedeviled computer makers using lithium-ion batteries made by Japan's Sony Corp. The delay also comes in response to the recent rise in product recalls and other quality gaffes in new Toyota vehicles, the individuals who spoke on condition of anonymity said.

They said the decision was made ultimately by Toyota President Katsuaki Watanabe who in the recent past has voiced concern about Toyota's vehicle quality - what he has repeated called the auto maker's "lifeline." In the U.S., the number of recalls hit 2.38 million vehicles in 2005, before settling down to 601,894 vehicles last year, according to Toyota. The company plans to use a more advanced version of nickel-metal hydride batteries for the initial launch of the next-generation Prius, people familiar with the company's plans said.

Nickel-metal hydride batteries are a less sophisticated kind of technology than lithium-ion batteries but have been used in the Prius since 1997 and proven in real life driving for nearly a decade. Still, that doesn't mean the company has given up lithium-ion battery technology altogether. Toyota already has been testing a Prius equipped with a still-experimental lithium-ion battery pack on the company's proving ground in Toyota City. The car was being test-driven as recently as last week. The individuals said Toyota plans to launch the new battery technology as soon as it believes it is robust enough for mass production and real-life driving. That means, they said, the Japanese auto maker will likely equip a later derivative of the next-generation Prius with lithium-ion batteries. It wasn't clear when that Prius derivative, believed to be a station wagon, is coming out. A spokesman at Toyota's supplier of those lithium-ion batteries, Panasonic EV Energy Co. Ltd., declined to comment.

Toyota's move to postpone an application of lithium-ion batteries in hybrids will likely provide a big break for Toyota's rivals, such as General Motors Corp. which is trying to come out with hybrid vehicles using lithium-ion batteries as early as in 2009. People familiar with GM's product plans said GM had all but given up its hopes to beat Toyota to market with a gasoline-electric hybrid with a lithium-ion battery pack. GM, those people said, has been aiming at launching a Saturn Vue Green Line plug-in hybrid by the autumn of 2009. "This is a big break" for GM, one of those people said.

A Toyota spokesman in Tokyo said: "We always try to launch a product in a most timely fashion as possible."

The move is part of Toyota President Mr. Watanabe's effort to slow down the pace of product development in order to shore up vehicle quality and reliability following a string of recalls and other quality gaffes in recent years.

Last year, Mr. Watanabe told The Wall Street Journal that after a two-month review of its product-development processes, the company concluded engineers in some cases might have rushed out products without conducting enough quality checks, such as building prototypes. He said he intended to boost the number of those quality checks and would hire more engineers to do so.

Toyota scales back hybrid plans
By JAMES R. HEALEY
USA Today, June 11, 2007
http://www.usatoday.com/­money/­autos/­2007-06-11-toyota-usat_N.htm

After taking a decade to sell its first 1 million gasoline-electric hybrid vehicles worldwide, Toyota Motor now says it plans to sell 1 million a year within a few years.

At the same time, the big automaker appears to be backing away from a pledge made a few years ago that hybrid powertrains would be available as options on nearly every U.S. vehicle by 2010.

"The right car, at the right place, at the right time, in accordance with energy trends," said Mira Sleilati, spokeswoman at Toyota Motor North America, the automaker's holding company. Her comment was via e-mail, in response to questions about Toyota's alternative-power vehicles.

"Hybrid technology is our core technology, and we will double our hybrid lineup. At the same time, we are accelerating the pace of our efforts to achieve annual sales of 1 million units in the early part of the 2010s," she said in the e-mail.

That would be less ambitious than promised in October 2003 at the Tarrytown, N.Y., briefing on the redesigned Prius hybrid.

Doubling the U.S. hybrid line would result in 12 hybrids, just one-third the 35 total models sold by Toyota's namesake brand, its Lexus luxury brand and its Scion youth brand - and not until after the 2010 date promised at the 2003 briefing.

How does that amount to "accelerating the pace" of hybrid launches? Sleilati wouldn't explain: "We, on behalf of TMC (Toyota Motor Corp., the Japanese parent company) are unable to provide any additional comment beyond this, particularly in regards to product planning or timing."

Regardless, Toyota would be the most ambitious hybrid marketer at a time that $3 gasoline has made fuel-saving hybrids popular in America.

Sales of gasoline-electric hybrids should boom 226 percent to 854,000 in 2011 from 262,000 last year, according to a forecast by J.D. Power and Associates. "If gas prices stay high, the sky's the limit," says J.D. Power spokesman John Tews.

The United States, in fact, is the biggest hybrid market. It accounted for 163,000 of Toyota's 313,000 total hybrid sales last year, or 52 percent. And the United States accounted for about 57 percent of the first 1 million worldwide sales, which Toyota announced last week.

The automaker introduced its Prius gasoline-electric hybrid in Japan in 1997 and in the USA in 2000. It now also sells hybrid versions of the Camry sedan and Highlander SUV and of the Lexus LS and GS sedans and RX SUV. Honda, Ford Motor, General Motors and Nissan also offer hybrids, though sales lag behind Toyota substantially.

Fuel economy is the main selling point. Toyota's Camry hybrid is rated 34 miles per gallon in combined city-highway driving under 2008 federal rules versus 25 mpg for the highest-rated gasoline Camry.

Toyota also says it is mulling diesel-power passenger vehicles and expects to announce those plans, if any, next month. Rival Honda plans U.S. diesel cars in 2009.