A petition to Toyota to build electric vehicles

corola no you just can't do it.

A decade from now camry, accord, malibu, the midsize market may not be sold without a lithium battery and at least one big motor. Key developments -

fussion energi today is already selling over 10,000 units a year with a tiny trunk
bmw 3 series phev is scheduled to be released in 2016
tesla model iii is due in volume around 2018

These vehicles should significantly drop the price of lithium batteries, motors, and inverters, and the tesla should push electronic awd.

Add to this the cafe requirements for 2025
These less expensive components will reduce the hybrid premium for

hsd style midsized sedans with lithium batteries will have a significantly smaller hybrid premium. Toyota's and Ford's key patents will have expired by then.

This should make the midsize sedan a majority of hv, phev, and bev over ice versions, even if gasoline prices stay low. The fusion and camry hybrids already have advantages of faster acceleration and ice off when stopped, people will pay more for that.
There will always be a market for less expensive corola sized cars. They may remain majority ice only.

On sport sedan and luxury cars, in 10 years a significant amount will have a plug. I don't think toyota misses out if it doesn't build bevs, they can outsource that engineering later, but they will fall behind if they don't add more effort to phevs.

 

10,000 sounds like a lot until you look at the number of cars sold.

 

Then when you consider how many fewer would have happened without tax-credit help, the challenge looks daunting.

Fortunately, the patents on NiMH just expired. That opens up new opportunity... a factor many seem to keep forgetting for some reason.

Anywho, the resulting cost drop along with greater flexibility of design will help achieve more market penetration for hybrids. That's very important if we expect any type of wide acceptance for plug-in choices.

 

Thank you for the details John.

Why do you expect a price drop? Due to the NiMH patents ending?
This is an intriguing idea, I know medications tend to work that way, however I am not sure if that is applicable to the automotive industry?

Regarding "flexibility of design". Is this just ongoing improvements you expect, or are you suggesting this flexibility of design was not available before?

 

If you consider it, from the point of view of no one wants' plug-ins 10,000 is fairly good.

Ford has sold a lot more of this series of fusions than the last and the energi has been out less than 2 years with a heavily compromised trunk. The take rate has been 16% electrified with 12% hybrid and 4% phev. This compares favorably to camry hybrid with has a take rate of 9% hybrids. The phevs may actually be driving some hybrid sales as the salesman shows both.

In a decade cafe will have fully kicked in.
The CAFE Numbers Game: Making Sense of the New Fuel-Economy Regulations - Feature - Car and Driver
Here its likely each phev will allow the sales of 3 ice only midsize sedan or you need a hybrid. In 2 generations these companies can definitely figure out pakaging so a car can carry 8kwh of batteries and still have a highly usable trunk. Even if battery prices only drop to $250/kwh (tesla predicts $100, and should be under $200 with a different chemistry when the gigafactory starts production), then the 8kwh is only $2000, and car companies may not mark this up to get cafe credits. I see that 4% growing fast with every new redesign, and each step on the cafe ladder. The main hsd patents are expiring so other automakers will have to follow suit which will help reduce battery/motor/inverter costs even more.

Fusion energi should grow close to 100% this year compared to last year (2% 2013, 4% 2014, maybe slowing to 5% 2015). The next generation (~2018) should be able to grow to a take rate of 15%. The generation after that with battery improvements should sell very well.

 

We can't forget, it's a huge PR game for Toyota regarding their message about this topic. They can't afford to be seen as insensitive to the public's concerns, but at the same time, they have to be profitable. That's why I think what they do is more important than what they say.

 

Just how is pushing fuel cell vehicles down our throats profitable? You can't on one hand say 10,000 in the US in 2014 is tiny, but 3000 in the next 3 years is huge, game changer, mainstream, repeating the sucess of the prius.

Toyota has been caught in a web of negative anti plug-in false statements. There best defense is to stop the false statements. The last one though seemed to be this weekened, when they claimed better than expected demand for their soon to be shipping mirai. Its not a drive to be profitable, it is a drive to get the $8000 federal tax credit from the federal government extended after toyota and others failed to deliver promised fuel cells in the past. It is all about corporate welfare and trying to confuse the public.

 

It always has to be profitable, even if it's a long-term play, taking decades or more. In the 60s, Toyota, and other Japanese automakers faced a tariff-wall in the US, designed to keep them out. The winning move was to make the cars so reliable and desirable that buyers would buy them despite the extra cost. It couldn't have been profitable at first, but in time, the large volumes of sales allowed them to recoup their first losses. Given their vast experience over the years, I have no doubt they know what they're doing this time.

 

I don't think auto companies are particularly good corporate citizens or even make good decisions about long term or short term profits.

Some things such as toyota's anti-plug-in war on words is not honest or likely to be profitable. Part of it can be summed up by the innovators dilemma. Often corporate cultures fear change, and moving towards plug-ins is a big scary change for the dealership networks. It both requires more knowledgeable salesmen, and less maintenance revenue. GM's horrendous losses seemed in part a result of trying to keep an outdated and bloated dealership model going. I am sure that the bean counters in Toyota city know that 2+2 doesn't equal 20. The hundreds of billions of dollars worth of required hydrogen infrastructure will not be built by tax payers or oil companies in Toyota's most profitable market (north america). It may be able to strong arm politicians in Japan to pay for it though, and that can keep the Japanese market closed and subsidized for Toyota. China's government also looks like they will not foot the bill for hydrogen infrastructure. That means the two largest and most profitable markets in the world are unlikely to be profitable for hydrogen cars for at least 30 years, and R&D does not need this pr hype machine. There is no long term vision here.

No the real reason to push hydrogen in the US, is to slow the rise of plug-in cars. I think rick wagoner really did, and takeshi uchiyamda still believes in hydrogen's promise. This is not a feeling borne from engineering knowledge though, it is more like a religious ferver. GM pissed away $2.5B on the stuff under wagoner, monty that if it had been put in plug-ins and hybrids might have made the company much stronger today. I have no idea how much toyota has pissed away so far, we only learned gm's amount during the bankruptcy. We have to choices true believers that don't understand the engineering or accounting for these things, or really a plot to slow the rise of plug-ins. I'll let you decide

Hobbled by High Cost, Hydrogen Fuel Cells Will Be a Modest $3 Billion Market in 2030 | Lux Research
Lighter Than Air? Toyota's Quixotic Plan To Sell Hydrogen Cars Feels Almost Real - Forbes

Fuel Cells A Long Way From Mainstream, Despite Toyota Launch - Forbes

Less efficient, more expensive, can't fuel at home or in gas stations, just in publically funded hydrogen stations. What future does toyota promise us?

 

I agree with most of what you say, and these generalizations are mostly true, but some are better than others, and all of them claim to be doing a great and wonderful job of it.

To look back over a decade or two, who said "hybrid cars had no future," and who actually created that future? That's why I'm not ready to lump Toyota in with the rest of the automakers. In my opinion, the companies that seem to pull success out of a hat, are those who defy the "rules" set down by the MBAs and financial analysts who tell them to do "what works" and what they should be doing exploit their markets. I think there's more wisdom sometimes in going against the grain, than with going with the usual, business as usual-type paradigm.

 

How is fuel-cell advancement any different from other "alternates" with the same long-term ambitions of eventually becoming a common choice?

It takes decades and there are very real barriers to overcome. One big one everyone seems to overlook is the reality of patents. If you're first to pounce, you stand a greater chance of capitalizing on the opportunity. It's a simple formula to success we've seen play out many times. The costs & risks are traded off with that leadership potential.

There's obvious upset from the EV crowd for Toyota not delivering something competitive in the electric-only arena, but there aren't any bridges actually being burned. Look at all the "anti" advertising of the past for proof. We all know that battery advancement can & will change automaker stance on their offerings. We also know that reputation is not built upon offerings alone.

I personally get annoyed by the effort to push a conspiracy belief, especially what all the history we've witnessed with hybrids. Remember all the anti-hybrid nonsense from GM, followed by an intense anti-EV campaign? All that effort resulted in a vehicle which didn't take the market by storm as promised. Heck, sales are just barely squeaking along, even with a generous tax-credit. Take a close look at Ford, who really did try to deliver something competitive. Sales have been adequate, but next steps are a bit of a mystery. Is keeping silent on plans better?

The double-standards and lack of big-picture consideration is frustrating. Not taking into account history adds to it. But what I find most interesting is the complete disregard for the existing energy distribution system. It seems as though there are some so naïve that they think the oil, gas, transport, and reseller network will just abandon their business? Hydrogen will become the take-over product. They can continue their business as usual, but with that instead. We'll be able to produce locally too, without having to drill or frack.

Somehow, all the players involved must find a way to get along. Without a major effort to cooperate, how much change do we actually think we can achieve?

 

It requires a much higher amount of taxpayer money if it is commercialized right now.

I don't think anyone faults Toyota for doing R&D, but I do fault them for gibberish like this.

Report: Toyota to Boost Fuel Cell Sedan Output | Fox Business
2016 Toyota Mirai Fuel-Cell Car Will Alter Industry As Prius Did, Says Exec

Really ramp up from 0 to some every week. Its the initial hand built production. Don't pretend you are do a high volume line because you have talked governments into buying 700 cars next year.

but inside these very articles (note they are new repetition of stuff from 2009, are actual forecasts that contradict them. In fact we know why toyota is not going to be producing 33k per year like tesla did this year, they would lose their shirt.

How Much Money Does The 2016 Toyota Mirai Lose? A Lot, Perhaps

So what is up with this hype.

I think most people are over toyota not offering things the market is demanding in the plug-in space. The Upset is about the false PR that somehow these 3000 cars are going to kill plug-ins because they will grow so fast. Really bob carter, dominant technology. I know the bigger the lie the easier it is to be believed but why these press releases every week, when you have already admitted these are precomercial compliance only numbers for the next decade.

Why the hype? Why the lies?

Toyota we expect more.

 

Reality is, batteries still cost too much... hence the current stance. Spreading of the belief that electric-only vehicles are actually competitive isn't helpful. Traditional vehicles are absolutely crushing the high-efficiency market still. Why is that so difficult to accept?

I'm amazed by the continued double-standard. I could just as well call it hypocritical. My blogs are loaded with quotes about how absurd it was to believe Volt hype years ago, that the posts of enthusiasts and articles from media shouldn't have been taken seriously. Yet, that's exactly what's happening now with FCV.

Looking at attempts to diversify for long-term well-being as an anti-plug-in war is rather amusing. We all know how easy it is to spin comments, take them out of context, and blow them out of proportion. No amount of replies will change the minds of some though.

 

I remember looking into the Japanese Gen 1 Prius in the late 1990's and thinking that it made a lot of sense. I could see a future in hybrid technology so I bought one of the first U.S. version Gen 1 cars fresh off the boat.

In the mid-2000's I looked into plugin hybrids and thought they made a lot of sense. I decided to put off buying an aftermarket plugin kit for my 2004 Prius but when GM announced the Volt I followed its development closely and I bought one of the first ones off the assembly line.

Now in 2014, I'm looking into the latest hydrogen fuel cell prospects and I don't think they make sense. I'm not planning to get a Mirai.

Hydrogen fuel cells are cool technology and I admire all of the science and engineering that has gone into improving the designs and lowering the costs. It seems quite likely to me that most or all of this work will ultimately find success outside of the mainstream passenger car market.

Sometime around 2018 I will look at my options again and will likely get a ~300 mile range EV with fast DC charging capability or another big battery plugin hybrid. That is what makes sense to me in 2014 (along with full gas hybrids for those without significant plugin opportunities). Conventional gas cars, as time goes by, will make sense for the cheapest cars (up front cost -- the ink jet printer plan when gas prices top up again) for awhile and for the most expensive sports cars.

 

the difficulty is jim lentz interview with fortune saying toyota's fuel cell will be much cheaper than bevs Uchiyamasa saying fuel cells are ready but batteries need major breakthroughs. While we know the fuel cell vehicle only will be cheaper than bevs if the government gives it a much higher subsidy (something they are going to do in aichi, japan, atleast $50K. Mr. Lentz should have known better, but its a false naritive.

Toyota insists the only future for bevs is short range city cars like the imev and EQ, ignoring that the leaf and tesla S sell much better than their rosiest fcv predictions.

We have legitimately false claims on toyota's part, released in press releases weakly. Could they at least stick to the facts. Stop hyping demand is great, when its 700. Stop claiming this technology will dominate, and plug-ins will die. Is that so hard. 1 month without the hype.
Cumulative US Plug-In Electric Vehicle Sales – Model By Model Breakdown With Market Share Data – November 2014

 

It was silly to believe that GM would sell as many as 60,000 1st gen Volts a year. I never believed that hype either. Battery-centric cars are held back by cost and by ignorance.

Costs are dropping as I and many others have been predicting. The Volt's MSRP has already dropped $10,000 in 2015 inflation-adjusted dollars between 2010 and now and the battery has been incrementally improved. GM has said the 2016 Volt redesign has targeted further significant cost reductions.

We have seen large industry-wide battery cost reductions since 2007 when the Volt was approved for production. From maybe $1,000 per kwh at the pack down to $500 or less. Tesla likely pays less than $400 per kWh and claims cost reductions of 30% or more from the GigaFactory. Multiple battery technologies look promising for future energy density and cost reductions including silicone-enhanced carbon anodes, and promising near-term production-ready claims from several solid-state battery startups claiming to be production ready within 3 years leading quickly to $200 or less at the pack level. GM, Tesla, and recently Nissan along with Panasonic and LG Chem have stated that 200 mile EVs are do-able in 2017 for $30-35k.

So we see battery technology on track with multiple independent paths towards near-term success. We also see clear paths toward cost-effective renewable electricity generation with near grid-parity already now for wind and solar due to large recent cost reductions.

The larger imperative goal of major reductions in CO2 emissions between now and 2050 shows a clear path to success in the personal transportation space using these technologies.

When I look at FCV technologies the path toward that CO2 goal is very uncertain. Costs have been radically reduced during the past 20 years but it's unclear to me what realistic cost reductions can be further made during the next 5-10 years. It's also unclear how zero or low-CO2 hydrogen will be produced in a market efficient manner and in sufficient quantities during the next 5-10 years or beyond.

The battery-centric path makes sense, fits together, and has a relatively clear vision of how to meet the CO2 emission reduction goals that we need to meet in the coming decades.

The FCV path is lacking. That's why I'm skeptical and that's why I think the larger rollout of the Mirai and other FCVs right now with heavy regulatory subsidies is a distraction and is counter-productive.

 

yet hydrogen stacks (expensive units, & yet a consumable) need batteries to buffer during power demands .... and the bigger the battery pack - the better a smaller/less costly stack can run. So if traction batteries are too costly for an ev, requiring a "wait" mode for Toyota EV's - why push an even more costly hydrogen car that relies on the same battery chemistry.
.

 

It is interesting to hear you mention the leadership potential from being first.
Lately, quite often, you have mentioned how it is a smart business move for Toyota to wait and let others take the lead in the plugin market.

So, in the area of electrification it is smart to wait, and in the fuel cell market it is best to be first and capitalize on the opportunity?

 

Second time in recent posts you didn't actually read/notice/catchwhat I said... patents... long-term... any of that ring a bell? Did you ever pick up on what the wait was for?

 

It's a matter of size. PHV's pack will be able to provide that buffer capacity. That sharing is a win-win, allowing both to benefit from chemistry & production improvements. Setting an EV in the wings waiting to take advantage when the tipping point is reached makes sense.

The hardest part still remains reading the market, knowing your audience.