Toyota's Sets PHEV Release Date

[DeadPhish]

Originally Posted by drees

It's not a matter of "can". They will do it because it's required by law.

8 years / 100k miles for the Federal emissions warranty and 10 years / 150k miles for CARB states.

...and if they "can't" offer these warranties because the technology isn't ready for it yet??? Again notice no maker has said anything about the warranties yet.

Toyota's view on Li-Ions is stated in the following article as reported on GCC.
Green Car Congress: Toyota Concerned About Market Viability of Plug-ins, Sees Clear Path to Commercialization of Fuel Cell Technology in 2015

Essentially...

• the cost of the Li-Ions is very high and economies of scale will not bring the cost down at anytime soon
• the usage of the EVs, EREVs and PHEVs will put an extraordinary operating burden on the batteries
• the customers will have to consider replacing these high-priced batteries at some time during a vehicle's life...that doesn't sound like a ringing endorsement for long warranties.
• infrastructure issues limit the potential scope of buyers who might want to use an EV or PHEV
• cost - meaning sales price - will further limit the range of buyers willing to take advantage of the EVs and PHEVs

The PHEVs must be developed but they are not destined to be low-cost high-volume vehicles for the masses for quite a while to come.

[Rybold]

"Unlike Nissan, which has said it expects to sell hundreds of thousands of Leaf battery cars within a few years, Toyota has said it’s less certain of consumer readiness to buy vehicles that cost more and offer less range."
Toyota Plans U.S. Retail Sales of Plug-In Prius Hybrid by 2012 - Bloomberg.com

I think Toyota needs to hire the Nissan marketing team.

Analyzing the quote: For starters, they aren't comparing apples to apples. One is an EV and the other is a PHEV. Toyota may be less certain of consumers buying EVs (which, yes, offer less range than a hybrid), but the issue at hand for Toyota right now is not mass production of EVs, but mass production of PHEVs. Let's get things straight first.

[drees]

Originally Posted by DeadPhish

[*]the customers will have to consider replacing these high-priced batteries at some time during a vehicle's life...that doesn't sound like a ringing endorsement for long warranties.

IMO - the reason Toyota is so bearish on PHEVs and EVs is because of a couple primary reasons:

1. Toyota prefers to under promise and over deliver.
2. Their JV with Panasonic-EV has not produced Lithium batteries as good as some of the other manufacturers.

That whole announcement was made to temper enthusiasm for (PH)EVs since obviously there is a lot of demand from the enthusiasts for them - but they aren't ready to commit to them yet for whatever reason.

The article on GCG from Toyota has a number of glaring factual errors where stated reality does not match up:

1. Lithium battery cost - batteries continue to get cheaper and currently cost about $500/kWh. A 7 kWh pack good for 15-20mi of EV range (leaving plenty of capacity to ensure durability) should only cost about $3500 mass produced. And that cost should continue to drop rapidly over the next couple years. (Just Google for Chevy Volt battery cost for a lot of good articles). Even if it cost $5k to get 20 mile EV range, Toyota would have a line wrapped around the block waiting to get one. Citing a study that found that the average consumer would only pay $1700 to get 15-20mi range is short-sighted. I'm 100% sure that same study would have told them to never bother producing the Prius. Never mind that there are 10s of thousands of people who'd likely by one - heck - if Tesla can sell nearly 1,000 $100k+ 2-seater EVs with 244mi range in a year, imagine the market for a $27k PHEV with 20miles EV range that seats 5. I bet they outsell the Insight.

2. Bullish on fuel cells - They have got to be kidding if they think they will have FC costs cheaper than (PH)EVs by 2015. First off - a FC vehicle is basically a PHEV with a FC range extender instead of a gas-powered one! So they are claiming they can get the cost of an engine down to a couple thousand bucks from the hundreds of thousands it currently costs. Good luck with that. Batteries will get there first.

[DeadPhish]

Originally Posted by drees

IMO - the reason Toyota is so bearish on PHEVs and EVs is because of a couple primary reasons:

1. Toyota prefers to under promise and over deliver.
2. Their JV with Panasonic-EV has not produced Lithium batteries as good as some of the other manufacturers.

That whole announcement was made to temper enthusiasm for (PH)EVs since obviously there is a lot of demand from the enthusiasts for them - but they aren't ready to commit to them yet for whatever reason.

The article on GCG from Toyota has a number of glaring factual errors where stated reality does not match up:

1. Lithium battery cost - batteries continue to get cheaper and currently cost about $500/kWh. A 7 kWh pack good for 15-20mi of EV range (leaving plenty of capacity to ensure durability) should only cost about $3500 mass produced. And that cost should continue to drop rapidly over the next couple years. (Just Google for Chevy Volt battery cost for a lot of good articles). Even if it cost $5k to get 20 mile EV range, Toyota would have a line wrapped around the block waiting to get one. Citing a study that found that the average consumer would only pay $1700 to get 15-20mi range is short-sighted. I'm 100% sure that same study would have told them to never bother producing the Prius. Never mind that there are 10s of thousands of people who'd likely by one - heck - if Tesla can sell nearly 1,000 $100k+ 2-seater EVs with 244mi range in a year, imagine the market for a $27k PHEV with 20miles EV range that seats 5. I bet they outsell the Insight.

2. Bullish on fuel cells - They have got to be kidding if they think they will have FC costs cheaper than (PH)EVs by 2015. First off - a FC vehicle is basically a PHEV with a FC range extender instead of a gas-powered one! So they are claiming they can get the cost of an engine down to a couple thousand bucks from the hundreds of thousands it currently costs. Good luck with that. Batteries will get there first.

Since I've seen the buying public every day since the first hybrids were sold in 2000 I think that I see what Toyota sees. The public will not be lined up around the block at all. Yes there will be a significant group of enthusiasts, just as Chrysler and GM have a wildly enthusiastic following for the Challenger and the Camaro. But after those first 22 buyers who 'gotta have one' are satisfied how does a huge mass marketer like Toyota or GM keep an asset-intensive plant running based on 22 sales.

Trust me on this only recently has a majority of the US buying public wrapped it's mind around the idea that it's OK to buy a hybrid. A good portion still give the hex sign to ward off evil spirits when the word 'hybrid' is mentioned.

Then there is the undeniable fact that huge segments of the buying public simply cannot use an EV or PHEV...regardless of the price...even if they wanted to buy one. These vehicles will be mostly the toys of well-to-do suburbanites. No one else need apply. That's not a good business strategy for a mass marketer.

Then there's the cost. GM is talking about $40000 for the Volt and Toyota is floating numbers higher than that. In today's financial environment few if any middle class buyers are going to qualify for loans of $40000 - $50000 for a single vehicle. Only well-to-do suburbanites need apply.

Then there's the lack of infrastructure. In France and Germany it now appears that the governments are taking a step that I don't think you'll see here ( pressure from the oil lobby ) by going forward with a structure of municipal or state charging stations. Here the oil lobby is far too powerful to allow the various governments to use it's tax payments to set up a structure of electric charging stations all over the country in order to put the oil companies out of business eventually. That's never going to happen.

This is one of the reasons why Toyota sees PHEVs for local transport 'around town' where one can bring it home every night - to the suburbs - and plug it in. Away from home PHEVs, EVs and EREVs are way too early at this point.

Finally there's the warranty issue. Again no maker has stood up and said anything about how long they will warranty the batteries. GM has mentioned leasing the battery packs for 3-5 yrs. Nissan nas mentioned swapping them out at regular intervals. Toyota has said that the customer will have to consider replacing the Li-Ions during the course of ownership. All this on top of $40000+ for the vehicle????

[mikepaul]

Originally Posted by DeadPhish

• the customers will have to consider replacing these high-priced batteries at some time during a vehicle's life...that doesn't sound like a ringing endorsement for long warranties.

I guess if the new batteries end up not having the same useful life, with a large number failing way before 100,000 miles, the auto companies will have to get permission to only warranty them for just under what appears to be their average useful life (say 60,000 miles).

OR, just abandon the whole 'better battery' idea until the batteries work better.

*I* certainly won't buy a PHEV if I'm expected to replace a multi-thousnd-dollar part before the whole vehicle is scrap. The fact that a battery for a 2004 Prius is only several hundered dollars from a scrap yard has been a small comfort so far, but like all insurance it's not something I want to HAVE to use.

My car still works fine. Stereo sucks due to decaying speakers, passenger door lock still works only occasionally, but it has no difficulties moving around. If it does last until 2014 (or when I can get a 2014 Prius) I'll be extatic, but that 2014 had better not be laden down with 'upgrades' that end up making it a bad deal. There'll always be SOMETHING else to buy...

[Danny]

Originally Posted by efusco

I hear ya Hill. It is people like you and I and many others here on PriusChat that helped propel the Prius II into the mainstream...while on one level it appears Toyota has begun to recognize that, on another they seem to ignore the potential of using us to do the same with PHEVs and EVs. The world is a different place than it was when the EV1 and RAV4 came out.

Use in fleets is just silly and pointless, it needs to be in the hands of enthusiasts that can exploit the potential of a PHEV and get the word out to a much broader audience.

That's something that I definitely have not understood. Why give the test product to a bunch of un-educated fleet customers who are going to do what the Seattle city employees did - drive around 90% of the time in it uncharged. Then you're just creating a self-fulfilling prophecy that "the public won't want a PHEV because of reason X, Y, and Z."

[DaveinOlyWA]

Originally Posted by hill

. According to Miller, it's due to the RAV4-EV. He says, "We had a lot of people raising their hands for the RAV4 EV," he said. "As soon as we made them ready for sale, that line evaporated very quickly."

lol...and how much of that was caused by the change in regs?? if not for the change, they would have never stopped selling them in the first place. they would now have the benefit of BILLIONS of miles of real world data the help them build a better EV.

Originally Posted by efusco

I hear ya Hill. It is people like you and I and many others here on PriusChat that helped propel the Prius II into the mainstream...while on one level it appears Toyota has begun to recognize that, on another they seem to ignore the potential of using us to do the same with PHEVs and EVs. The world is a different place than it was when the EV1 and RAV4 came out.

Use in fleets is just silly and pointless, it needs to be in the hands of enthusiasts that can exploit the potential of a PHEV and get the word out to a much broader audience.

AMEN!!! after PCD, i was certain that many of us here would be chosen to test drive the plug ins...after all, I AM A PERFECT CANDIDATE!!

i have 2 Pri's available for retrofit, i have perfect commute for a test, etc, etc, etc....

[Prius Team]

Wow, this is what I get for going on vacation! Who knew I'd return to this discussion? (Seriously, I didn't)

Lot's to respond to so I'll get to it.

Originally Posted by Danny

That's something that I definitely have not understood. Why give the test product to a bunch of un-educated fleet customers who are going to do what the Seattle city employees did - drive around 90% of the time in it uncharged. Then you're just creating a self-fulfilling prophecy that "the public won't want a PHEV because of reason X, Y, and Z."

Originally Posted by efusco

...it will take more than hidy-holing them away in fleets where people don't pay for their own gas, have no personal investment in achieving good fuel economy or even a good incentive to remember to plug them in.

I readily admit I don't understand the whole 'fleet' system, but this type of technology seems the perfect item to get into the hand of vocal enthusiasts with motivation to spread the world to the broader public.

Have patience. We haven't yet announced the details of the program. Trust me, it won't be "a bunch of un-educated fleet customers driving around uncharged 90% of the time." We will have a wide variety of people, driving conditions, and routes to understand the boundaries of performance. We might even find a way to get some enthusiasts into them. Let's cross our fingers.

Originally Posted by drees

IMO - the reason Toyota is so bearish on PHEVs and EVs is because of a couple primary reasons:

1. Toyota prefers to under promise and over deliver.

Always, always, always. How many people criticized the Gen II for not achieving the 2004 MPG figure of 60 MPG? A lot. We don't want to do that again.

Originally Posted by efusco

Not trying to claim that the Prius is a success exclusively b/c of Priuschat in any way shape or form, but the Prius became a 'hard to get' vehicle before we had $4/gal gas. Many factors came into play.

Actually I think PC has had a lot of impact on sales and brand image. Very important.

Originally Posted by plug-it-in

It is utterly stupid from Toyota not to offer PEV upgrades to the over a million Prius owners for say $3-5000 who LOVE their cars. We would test their new technology - on the road, under real driving conditions for free. What a marketing opportunity! Are these guys asleep!

No, we're not asleep. We are working really hard right now to study the market, and understand the opportunities and risks. I am as optimistic as anyone about the long-term opportunity for enhanced electrified technologies. (I actually was working on plug-in hybrids in 1994, and have never stopped believing.)

That said, we cannot just hope our way to the future. There has to be a solid business plan to get there, that considers customer appeal, market size, competition, external trends, and profitability. Yes, profitability. If the manufacturers don't make money on a generation of products, there is nothing to fund the generation after that. Please think about that.

Our demonstration program will give us a lot of data to refine our thinking right now. It's very important.

Originally Posted by drees

It's not a matter of "can". They will do it because it's required by law.

8 years / 100k miles for the Federal emissions warranty and 10 years / 150k miles for CARB states.

Again, the law doesn't always make something profitable. Sometimes, but not always.

Originally Posted by DeadPhish

Since I've seen the buying public every day since the first hybrids were sold in 2000 I think that I see what Toyota sees. The public will not be lined up around the block at all. Yes there will be a significant group of enthusiasts, just as Chrysler and GM have a wildly enthusiastic following for the Challenger and the Camaro. But after those first 22 buyers who 'gotta have one' are satisfied how does a huge mass marketer like Toyota or GM keep an asset-intensive plant running based on 22 sales.

Trust me on this only recently has a majority of the US buying public wrapped it's mind around the idea that it's OK to buy a hybrid. A good portion still give the hex sign to ward off evil spirits when the word 'hybrid' is mentioned.

Then there is the undeniable fact that huge segments of the buying public simply cannot use an EV or PHEV...regardless of the price...even if they wanted to buy one. These vehicles will be mostly the toys of well-to-do suburbanites. No one else need apply. That's not a good business strategy for a mass marketer.

Then there's the cost. GM is talking about $40000 for the Volt and Toyota is floating numbers higher than that. In today's financial environment few if any middle class buyers are going to qualify for loans of $40000 - $50000 for a single vehicle. Only well-to-do suburbanites need apply.

Then there's the lack of infrastructure. In France and Germany it now appears that the governments are taking a step that I don't think you'll see here ( pressure from the oil lobby ) by going forward with a structure of municipal or state charging stations. Here the oil lobby is far too powerful to allow the various governments to use it's tax payments to set up a structure of electric charging stations all over the country in order to put the oil companies out of business eventually. That's never going to happen.

This is one of the reasons why Toyota sees PHEVs for local transport 'around town' where one can bring it home every night - to the suburbs - and plug it in. Away from home PHEVs, EVs and EREVs are way too early at this point.

Finally there's the warranty issue. Again no maker has stood up and said anything about how long they will warranty the batteries. GM has mentioned leasing the battery packs for 3-5 yrs. Nissan nas mentioned swapping them out at regular intervals. Toyota has said that the customer will have to consider replacing the Li-Ions during the course of ownership. All this on top of $40000+ for the vehicle????

I just had to repost this response from DeadPhish. Please, please, read it and listen to what he has to say.

Thanks all. Love this discussion.

Doug Coleman
Prius Product Manager
Toyota Motor Sales, USA

[Danny]

Thanks for the response, Doug. As always, it is very appreciated by the community that Toyota is paying attention.

[DaveinOlyWA]

AHH!!, there is a crack of light shining thru the door...