By Juan Carlos Zuleta (8/12/10)
On March 29, 2009 I asked myself: Why Toyota (TM) and Honda (HMC) dislike lithium? My short answer to that question was: Because it was in their own interest to behave this way.
As is well known, these car makers pioneered the use of hybrid technology with nickel metal hydride batteries. Both created the conditions for a very profitable niche market, the hybrid electric vehicle market. So they had much to gain from delaying the arrival of the real electric car revolution since this would help them make more profits out of a rather obsolete but still commercially viable battery technology until the new emerging battery technology is finally introduced into the market. By doing so, they were also contributing to postponing the arrival of the sixth techno-economic paradigm with lithium as its main factor.
But this, of course, was a flawed strategy. In another blog published in April last year I argued that following a rather cautious and conservative approach to a lithium-based transition to electric propulsion in the global car industry implied their lagging behind General Motors insofar as electric automobile technology.
In a Seeking Alpha article published in July 2009, I went on to argue:
“Until now, most analysts thought that there was no real potential for use of Li-ion batteries in Hybrid Electric Vehicles (HEVs). They erroneously believed that Nickel-Metal Hydride (NiMH) batteries were the best choice for today’s HEVs, whereas Li-ion batteries were reserved for tomorrow’s Plug-in Hybrid Electric Vehicles (PHEV), Range Extended Electric Vehicles (REEVs) and Battery Electric Vehicles (BEVs).”
This argument, of course, never made sense. It rested on the unreasonable two-fold assumption that Li-ion batteries are not ready for prime-time and that plug-ins (and, for that matter, REEVs and BEVs) are a scam. For one thing, Hitachi’s notice tears apart the first half of the above contention. For another, Toyota’s latest decision to begin mass-producing PHEVs by 2012 and Nissan’s conviction that “now’s time to go electric” completely demolish the second half of it. Indeed one should not be surprised since PHEVs can be really thought of as an extension of HEVs. So if Li-ion batteries are to be used quite soon in plug-ins and both range-extended and battery EVs, then why not utilize them now for conventional hybrids as well?”
And I then concluded:
“Given both GM’s re-launch and Nissan’s renewed financial situation after having been granted a $ 1,6 billion loan to develop advanced Li-ion batteries for its new pure electric car, to retain its largest share in the automobile market of the world, Toyota will probably need to modify significantly its current conservative business strategy.”
As of now, both Toyota and Honda appear to have made some progress in this regard. Toyota has already launched its first 500 plug-in hybrid electric vehicles (PHEV) with Li-ion batteries for testing in Japan, North America and Europe and has recently announced that as part of its new partnership with Tesla it will mass-produce a new version of the all-electric RAV4 also with such advanced battery technology. Honda’s new CEO announced a few weeks ago that in the next-generation Civic Hybrid to be launched in 2011 it will use Li-ion batteries supplied by Blue Energy, a joint venture company between GS Yuasa and Honda.
The question is now whether these efforts will be enough to prevent Hyundai (HYMLF.PK) from leapfrogging them in the hybrid electric car market following its recent announcement that later this year it will launch the 2011 Sonata Hybrid, the world’s first mass-produced hybrid with a lithium-ion battery pack. And the most obvious answer at this point is: Probably not.
So this leads us to a new query: Will Toyota and Honda rethink their business strategy now so as to finally become more aggressive in terms of using Li-ion batteries in their next different car models? And my humble opinion is that chances are they will.
By John Addison (3/5/10)
Ford Takes Hybrid Customers from Toyota, Plans Plug-in Leapfrog
Ford outsold Toyota in February in the United States. Ford’s monthly sales of 140,319 vehicles were up 43 percent over February 2009, while Toyota sales dropped 9 percent to 100,027 vehicles. Part of Ford’s success is that its hybrids are taking on Toyota’s. Next year, Ford will try to leapfrog Toyota with electric cars.
Ford’s growing success comes at a time when Toyota is recalling millions of vehicles, and suspending sales of key models, due to accelerator pedal problems. More customers now feel safer in a Ford, Mercury, or Lincoln than in a Toyota or Lexus.
“The good news is we have even more new products and fuel-efficient powertrains coming this year, and we expect our progress to continue,” said Ken Czubay, Ford vice president, U.S. Marketing Sales and Service. In January and February, Ford sold 28,638 Fusions, closing in on Toyota’s Camry with 32,344 in U.S. sales; in light-trucks, Ford dominates with the F Series selling 60,525, and the Escape selling 25,909. With renewed interest in fuel economy, the Fusion Hybrid and Escape Hybrid are a growing part of Ford’s success.
Toyota commands four of the top 10 positions of Clean Fleet’s 2010 Hybrids with Best Mileage. Toyota’s four are the Toyota Prius, Lexus HS 250h, Toyota Camry Hybrid, and Lexus RX450h. Ford commands two slots with the Ford Fusion Hybrid and the Ford Escape Hybrid.
Hybrid SUVs are part of the battle. With better SUV fuel economy, the Ford Escape Hybrid is taking market share from the larger Toyota Highlander Hybrid and the pricey Lexus RX450h. In 2012, Toyota will try deliver the best hybrid mileage with a new RAV4 Hybrid. Ford, however, keeps improving the Escape’s MPG and has added hybrids planned.
Toyota will fight hard to remain the hybrid leader. Its plans include a sexy CR-Z sports car hybrid, a hybrid minivan, and lower cost sedan offerings such as a hybrid Yaris and/or Auris.
Toyota is putting 500 Prius Plug-in Hybrids into test. When I last saw the Plug-in it looked almost identical to the best selling hybrid Prius. The Plug-in will only have a 14 mile electric range before the engine is engaged. Ford’s 2012 plug-in offering is likely to have a 40 mile range, but at the expense of needing at least double the lithium battery capacity of the Prius Plug-in. We could see a price versus electric-range battle, with both companies doing well.
So far, electricity is proving to be a safer fuel than gasoline. The industry does fear a lithium thermal runaway making the evening news. Toyota has been ambivalent about switching to lithium batteries. A renewed caution at Toyota, delay its plug-in offerings, thereby creating an opportunity for Ford, GM, and others.
Ford is rolling out a family of plug-in offerings. I have been impressed with my test drives of the Ford Focus EV and Ford Transit Connect Electric. By next year, you can order either of these battery-electric vehicles.
Ford’s strategic direction is to offer families of cars where the customer can select the preferred drive train including a performance gasoline-engine, Ecoboost fuel saving engine, hybrid, plug-in hybrid, or pure battery electric. Clean Fleet Report forecasts that in 2012, Ford will offer a new Ford Focus with all of these options. The Fusion many not be far behind. The global family approach has the compelling potential of expanded customer choice and improved profit margins.
Toyota Hits the Breaks
After repairing over one million vehicles, on March 4 Toyota received another setback when the National Highway Traffic Safety Administration (NHTSA) notified Toyota that some owners have reported unintended acceleration after receiving the accelerator pedal recall remedies.
Toyota’s accelerator pedal recall and suspension of sales is confined to the following Toyota Division vehicles:
• Certain 2009-2010 RAV4,
• Certain 2009-2010 Corolla,
• 2009-2010 Matrix,
• 2005-2010 Avalon,
• Certain 2007-2010 Camry,
• Certain 2010 Highlander,
• 2007-2010 Tundra,
• 2008-2010 Sequoia
Which models are involved in the floor mat pedal entrapment recall?
2007 – 2010 Camry
2005 – 2010 Avalon
2004 – 2009 Prius
2005 – 2010 Tacoma
2007 – 2010 Tundra
2008 – 2010 Highlander
2009 – 2010 Corolla
2009 – 2010 Venza
2009 – 2010 Matrix
2006 – 2010 IS 250
2006 – 2010 IS 350
2007 – 2010 ES 350
Toyota is just getting started with repairs to recalled vehicles. With only one million repaired, over six million await work. Details at Toyota FAQ
Ford Chases GM’s Market Share Leadership
Not only did Ford pass Toyota in February, Ford almost passed GM to take #1 market share leadership. Ford sold 140,319 vehicles to GM’s 141,551. Ford wants the number one position ahead of GM, Toyota, Honda, Chrysler, Nissan, and all the others. Impressive is that Ford has been able to grow without the $70 billion bailout that went to GM and Chrysler.
Hybrids and electric cars will be a growing part of the battle for market share. Nissan will be the first to deliver 10,000 electric cars with the Leaf, but Nissan has been weak in offering hybrids. GM plans to be the plug-in leader with the Chevy Volt, followed by the Cadillac Converj, but GM has been weak in offering hybrids with real fuel savings.
In the short-term the battle will be fought with price promotions, quality, and safety. In the long-term the battle will also be fought with fuel economy, electric drives, and lifetime operating cost for the customers.
By John Addison (11/17/09)
Over 1,000,000 Hybrids in U.S.
Toyota Motor Corporation continues to dominate the global market for hybrid cars with its Toyota and Lexus brands. Last March, Toyota became the only car maker to have sold over one million hybrids in the United States. Hybrid sales are pushing 10 percent in Japan and even higher in some U.S. cities.
In our recent survey, Toyota captured four of the Top 10 Hybrids with Best MPG.
Toyota Prius continues to lead hybrid cars in fuel economy and lowest lifecycle greenhouse gas emissions. This perennial favorite midsize 4-door hatchback delivers 50 miles per gallon (mpg) and is lowest on the list with 3.7 tons of carbon dioxide equivalent for the EPA annual driving cycle. Yes, 3.7 tons of CO2e is a lot; but many cars, light trucks, and SUVs create three times that emission; to get lower emissions you would need a plug-in car. The hatchback design allows for more cargo, especially if you drop part or all of the 60/40 back bench seat.
Lexus HS 250h is a stylish compact 4-seat sedan that delivers 35 mpg and 5.3 tons of CO2e per year. The Lexus brand lets your friends know that are using less petroleum by choice; you can afford a bit of luxury.
Toyota Camry Hybrid delivers good mileage for a midsize with an automatic transmission. The EPA rating is 5.4 tons of CO2e for the EPA annual driving cycle and a combined 34 mpg.
Lexus RX 450h with more acceleration and room than the others, costs more, starting at over $42,000. For a powerful SUV, it still conserves with 30 mpg and 6.1 tons of CO2e. Haul 5 people and lots of stuff without sacrificing quality and styling in the RX450h. The all wheel drive version has slightly better mileage than the Ford Escape Hybrid 4WD.
Some Toyota offerings are more about performance or image, than about great mileage. The Toyota Highlander Hybrid also sells well with those who want a midsized SUV with either 2WD or 4WD. LS 600h L luxury hybrid sedan, is the world’s first vehicle to feature a full-hybrid V8 powertrain.
What is Next?
Jim Lentz, TMS president, said, “Toyota’s hybrid leadership will continue to expand in the U.S. and around the globe. With 10 new hybrid models between now and 2012 in various global markets, we plan to sell one million gas-electric hybrids per year, worldwide, sometime early in the next decade.”
Toyota has announced that it wants all of its cars to have a hybrid option by 2020. Ford wants the hybrid option for 90 percent of its cars much sooner. Competition will force Toyota to keep moving forward.
The Toyota Auris will be offered next year in Japan with better mileage than the Prius. It is expected to be a compact hybrid.
A Toyota Yaris with better mileage than the larger Prius has been long rumored for the U.S.
We continue to hear rumors of a larger Prius in the form of a crossover, wagon, or SUV. Behind this rumor may be a debate within Toyota to establish Prius as an independent brand, as Toyota Motor Corporation has done with Lexus and Scion.
In demonstrating what might be in our future, LF-Ch concept hybrid vehicle from Lexus offers dramatic style and premium features. If you have multiple drivers in your household, one could drive the LF-Ch for fuel economy while the other could be out playing Grand Prix with this sporty five-door. A drive mode-switch allows the driver to select between four modes: Normal, Eco, EV, plus a Sport mode that amplifies throttle response for the most enthusiastic drivers.
Toyota Plug-in Prius Sales will Jump in 2012
Toyota will start volume manufacturing of the Plug-in Prius in 2012 according to Reuters. 2012 manufacturing of 20,000 to 30,000 Toyota Prius PHEV are expected. Toyota has not yet finalized 2012 pricing. Full featured models may be priced from $40,000 to $50,000 and be competitive with the Chevy Volt in the U.S., Ford’s PHEV offerings, and the Mitsubishi EV in Japan. The added lithium batteries in the plug-in version of the Prius will make it priced much higher than the hybrid Prius.
Toyota is currently leasing 500 plug-in Priuses in Japan and the United States in fleet demonstrations. Smart grid charging will be an important part of U.S. demonstrations. The plug-in is a cautious step forward, with a freeway-speed electric range of only 12 miles before the engine is engaged.
Dr. Andy Frank, the father of plug-in hybrids, had lunch with me this week at GreenBeat 2009. He thinks that Toyota is smart to lower the cost of the Plug-in Prius by only using 5 kWh of lithium batteries, even though it limits the EV range. GM may have an added $10,000 per vehicle cost over Toyota by using 16kWh in the Chevy Volt, although that cost differential is moderated with a $7,500 tax credit for using 16kWh.
Toyota will place ten Prius plug-in hybrid electric vehicles with Xcel Energy’s SmartGridCity™ project in Boulder, Colorado. The vehicles will be the focus of an interdisciplinary research project coordinated by the University of Colorado at Boulder Renewable and Sustainable Energy Institute (RASEI), a new joint venture between the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the University of Colorado at Boulder.
The vehicle’s first-generation lithium-ion battery will be built on a dedicated PEVE (Panasonic EV Energy Company, LTD) assembly line. PEVE is a joint-venture in which Toyota owns 60 percent equity. The first generation lithium-ion batteries were developed in-house by Toyota Research and Development, and a dedicated battery development team is already working on the next battery “beyond lithium.”
Panasonic is in the process of buying Sanyo, subject to anti-trust scrutiny, which will extend its market share leadership and add auto OEM customers such as Ford.
In 2012, Toyota will also start selling the less expensive 2-door FT-EV, a pure battery electric car. This little car will probably be similar to the IQ concept car that it has shown for a few years. In the U.S. in 2012 Toyota will face intense EV competition with Nissan, Ford, and dozens of innovative younger companies such as Tesla.
Because hybrids cost more, some take years to make up for the added cost in fuel savings. Some of the performance and luxury models are never bought to save money. Rising oil prices and an improving economy will bring more people to hybrid cars. Toyota is determined to lead. It is auto show season. Look for more announcements in the months ahead.