PLUG OK license plate
Toyota's new concession on the way to plug-in hybrids
Aug 7, 2005 (From the CalCars-News archive)
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This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
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Supporters of CalCars and of Gas-Optional or Plug-In Hybirds (GO-HEVs or PHEVs)

We're making progress! Here's what Jim Press, president and chief operating officer of Toyota Motor Sales USA, told a conference of auto executives (while announcing that he expected a quarter of US auto sales to be hybrids within 10 years): "I think at some point you'll even have a button you can pick, mileage versus performance, because you're managing the system." (The full article from which this is taken is reproduced below.)

This is significant: such a button would be worth having in any hybrid (Of course, the value of such a button would be multiplied many times in a plug-in hybrid.) Equally important, saying "you're managing the system" shows the company recognizes that their customers and potential customers want more from them.

We can't say how much our work so far has contributed to this concession. But it confirms the value of our efforts and tells us to keep up the pressure, and continue getting out the word about 100+MPG cars that car companies could build today.

What led to Toyota's unusual statement? Here's a little background.

CalCars' primary goal is to encourage and incentivize OEMs (Original Equipment Manufacturer, industry-speak for auto-maker) to commercialize (industry-speak for design, build and sell) plug-in hybrid passenger vehicles We see building PHEVs as the way one or more OEMs could reshape and rescue itself. Many journalists agree -- see, for instance, "The Green Machine That Could be Detroit" at http://autos.groups.yahoo.com/­group/­calcars-news/­message/­90 .

When asked, we've often said Toyota will probably not be the first to commercialize PHEVs. Why not? Because they're prospering right now:

  • They have the most advanced technology: they may be years ahead of other OEMs.
  • They're making money on each hybrid they sell, and they sell everyone they build with no desperate discounts.
  • They've sunk millions of dollars into marketing campaigns telling people plugging in is a negative.
  • They believe batteries are not ready (though this is disproved by their own RAV4E's nickel-metal hydride batteries from five years ago, and if they take their own comments about Lithium-Ion seriously, they should now be involved in the multi-year "qualification" process --see Technology Lead Ron Gremban's comments at the PRIUS+ PHEV Conversion Group,
    http://autos.groups.yahoo.com/­group/­priusplus/­message/­468.)
  • Along with other OEMs, they don't think people will buy PHEVs. (That's why we're working with many others to organize fleet and private customers, along with public and private incentives.)

At the same time, we believe Toyota could do it quickly, and they might do it best. So while CalCars is now considering the possibility of converting Ford Escapes or other forthcoming hybrids, we remain hopeful that Toyota will come around. We've tracked their evolving statements: see http://autos.groups.yahoo.com/­group/­calcars-news/­message/­80 for our roundup of OEM comments on PHEVs as of July 11. You'll see that as PHEVs have gotten the attention of hybrid owners, journalists, as well as neo-cons, geo-greens, Senators and others in Washington, the company has moderated its position.

Now, somewhat unexpectedly, a new controversy has added to the pressures on Toyota to consider PHEVs. It began when many of the first reviews of the Honda Accord noted that most of the hybrid's benefits went to power rather than to efficiency. Many proponents of hybrids hadn't entirely minded that ads showed Accord and Lexus as power cars: this helped to dispel inaccurate misconceptions of electric vehicles as under-powered cars that sacrifice all driving pleasure. But we all worried that hybrid technology could join the other improvements that have allowed the US fleet's MPG to decline in recent decades as technology provided mostly-unneeded horsepower for acceleration and speed in ever-heavier vehicles.

Now isolated critics are being joined by the mainstream. On July 31, The NY Times reviewed the Lexus 400H (which uses the same Hybrid Synergy Drive as the Prius and the Highlander). The story, "The Hybrid Emperor's New Clothes," at http://www.nytimes.com/­2005/­07/­31/­automobiles/­31AUTO.html by Jeff Sabatini, began: "How did it come to this, that Toyota is now selling a hybrid gas-electric vehicle with no tangible fuel economy benefits?" The hard-hitting review continued, "I'll be charitable and call the gas mileage comparison between the hybrids and the standard RX a draw, though there is a clearly a loser -- anyone who buys an RX 400h under the assumption that it will consume appreciably less fuel in a range of driving situations." And Sabatini concluded, "I hope Toyota continues to pursue the worthy cause of developing vehicles that push the limits of automotive technology in the quest for better fuel economy, as it has with the Prius. That the RX 400h does nothing to further this goal is regrettable. Perhaps even more unfortunate is that Toyota's motivation in pushing hybrid technology may turn out to be a different shade of green than we've been led to believe, one much closer to the color of money."

The Times also made similar comments about the Highlander, in an article, "More Thirsty Than You'd Think." http://www.nytimes.com/­2005/­07/­31/­automobiles/­31TOYOTA.html by Bob Knoll.

These articles have put Toyota on the defensive, as have the increasing numbers of people asking them, "why can't your hybrids plug in?" All these factors have contributed to Toyota's trial balloon, which effectively asks, "what if we gave our customers more of a choice?"

Here's what John Wilner, a smart media/communications consultant (http://www.wordmonkey.com) said when he heard the news:

  • Key phrase: "You're managing the system." Toyota has either tested that concept through polling and/or focus groups, and found that people like it -- OR they are thinking about it as a future option and are vulnerable to being pressured into offering it sooner: e.g., "If I'm managing the system, how come I can't chose to go all- electric when I want?"
  • That notion of choice -- and thus by extension, freedom -- is a very powerful theme in the American psyche, and can be used as leverage to force Toyota to modify their "you don't have to plug it in" slogan. What about people who WANT to plug in to save gas and the environment, and reduce the political costs of dependence on foreign oil?
  • If, as they claim, they produce cars *in response* to consumer demand -- which is demonstrably untrue (where was the original demand for hybrids?) -- then they should have at least one GO-HEV/PHEV model for people who want to manage their driving to get the highest possible mileage ...

So stay tuned.... Felix

Here's the full report of Mr. Press's comments:
http://www.nytimes.com/­2005/­08/­04/­automobiles/­04auto.ready.html?
The New York Times August 4, 2005
Toyota Develops Hybrids With an Eye on the Future
By DANNY HAKIM

TRAVERSE CITY, Mich., Aug. 3 - Toyota is developing 10 hybrid electric models for sale worldwide by early in the next decade, the company's top North American executive said on Wednesday.

The company expects that a quarter of its sales in the United States will use the technology by then as it tries to sell one million hybrid vehicles a year worldwide. That would put it far ahead of projections for hybrid sales across the industry.

"At our current rate of sales, that's about 600,000 hybrids in the U.S.," said Jim Press, president and chief operating officer of Toyota Motor Sales USA, in comments at a conference in northern Michigan. "To achieve that goal, we will have to look at offering hybrid power systems in virtually all of our vehicles, including trucks."

Mr. Press dismissed concerns by some consumers and reviewers that Toyota and Honda were using the technology to increase horsepower in newer hybrid models, eroding fuel economy benefits. And he said that the proliferation of technology in modern cars had led to what he called an epidemic of recalls.

"It caught up with all of us in 2004 when the industry recalled 30.6 million vehicles, nearly twice the number we sold last year," he said.

The hybrid push is a goal of Toyota's strategy as it looks to increase its share of the world's auto market to 15 percent, which would probably vault it past General Motors as the world's largest automaker. Mr. Press and other Toyota executives have said that the volatility of gas prices, political instability and environmental issues make the development of the technology a priority.

Toyota sells three hybrid models in the United States - the Toyota Prius, the Lexus RX 400h and a hybrid version of its Toyota Highlander sports utility vehicle. The company has previously announced two of the 10 new hybrid models, versions of its Lexus GS sedan and Toyota Camry.

The announcement will keep the pressure on other automakers to develop fuel economy strategies to compete with Toyota, as well as Honda, the two companies that brought the first hybrids to market. So far, only Ford has responded with hybrids comparable to Toyota's popular Prius, though most other automakers have models in the works. Nissan plans to sell a version of its Altima sedan that uses Toyota's technology, and G.M. and DaimlerChrysler, companies long skeptical of the technology, have said more recently they are jointly developing a hybrid system for trucks.

Automakers have for years been exploring technological approaches to improving fuel economy. G.M. has been a proponent of hydrogen fuel cells, a promising technology but one with an uncertain future. Automakers are also putting new fuel-saving technologies on gasoline engines.

That said, the fuel economy of the average new vehicle sold in the United States is below where it was in the late 1980's as rising sales of S.U.V.'s and an emphasis on horsepower have trumped mileage gains, according to E.P.A. data.

"It's a big high-stakes craps game we're in and the outcome is very much unknown," said David Cole, chairman of the Center for Automotive Research, the consulting and research group that is one of the hosts of this week's conference. He was referring to the race among fuel-saving technologies and Toyota's decision to push forward with hybrids.

Toyota does not appear to be betting on gas prices returning to $1.50 a gallon. At the same time, Toyota and Honda have been criticized for the diminishing fuel economy returns of newer hybrids like the Lexus RX 400h, as the advanced technology is used to enhance horsepower.

"A lot of that's software," Mr. Press said. "I think at some point you'll even have a button you can pick, mileage versus performance, because you're managing the system. And the other part of that is, it really depends on driving habits."

Danny Hakim reported from Traverse City, Mich., for this article, and James Brooke from Tokyo.


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