Toyota's Sets PHEV Release Date

...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.

 

"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.

 

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????

 

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...

 

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.

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....

 

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.

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.

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.

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

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.

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

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

 

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

 

nice info doug...
i need to say i am a real enthusiast:cheer2:

OMG is there a heaven? where i can get a plugin fleet test car
let the light shine down on me:flypig::amen:

 

deadphish always has valid points, but if Toyota had never put the Prius out there, what level of hybrid acceptance would we have today?? i venture to say, probably very very little.

people are adverse to change. only a very small percentage of the population will volunteer to do so especially with unproven technology that must provide a vital service; personal transportation. couple that fact with the significant expense and we have a very cautious consumer. even i did not jump into the hybrid game until Gen 2 although it was always a good idea and i have total faith in Toyota's already.

so to say that Toyota is hesitant because there is not enough market for plug ins and EV's is a bit ludicrous. any ramp up of new technology will take time AFTER introduction. most of it will sell word of mouth if the product is well designed and fills a need. The Prius now enjoys most of its success due to that fact. (sure aint advertising, since the Pri was not really advertised at all for a very long period of time)

as far as price, well i can remember when i made my commitment to buy my 04 for $20,000. my dad thought i was crazy to pay that much for a car AND then have to wait 6 months for delivery. for nearly a month, he sent me emails on prices for Corollas and Camry's. that was December 2003...

what does he drive today?? a 2007 Prius, purchased at full retail, no incentives and he is completely satisfied.

no matter what Toyota does, it still boils down to one of two things.

1) they will put out a product that does not meet the consumer's need. (they only have to meet the needs of a few percentage points of drivers to insure plenty of product demand for a few years initially). they product will fade away in a few years.

2) they will put out a product that does fit the needs of the consumer. granted, not all the needs of everyone, but no product does that now and neither will theirs. it will take 2-3 years just for the general public to become aware of its existence. an alternative would be a massive, very expensive advertising campaign. it will take about 3-5 years after launch before most consumers will have a vague familiarity of the products capability. now all this can be mitigated by real life, word of mouth advertising by actual owners. the better the product, the more owners will talk.

none of this will happen without widespread availability to the general public. if a product that has a waiting list is needed, fine. as much of a pain as it was to have to wait 6½ months for my first Prius, its way better than nothing

 

There are a ton of vehicles that Toyota/Lexus produces which are only "niche" vehicles. Look at how many sell less than 1,000/month. Taking the numbers from last month:

SCION xD: 912 (granted this model has plummeted in the last year)
Lexus LS: 777 (high end luxury model)
Lexus SC: 19 (convertible)
Lexus GS: 503
FJ Cruiser: 413
4Runner: 666
Land Cruiser: 233

Toyota keeps on building those even though they sell in low numbers. With the Prius selling ~10k+/month, I've got to imagine that 5% of those buyers would buy a PHEV for a $3,500 premium. Sure, I'm guessing - but also think of the PR Toyota would get for producing the first mass produced PHEV! Just look at how much PR Nissan is getting for the Leaf.

If you wait until the majority of the population is ready for PHEVs before you start making them, you'll never sell them.

You're ignoring the huge market of people who are eligible. Again - look at the good number of $100k+ Teslas selling and the $850/month Minis BMW leased.

See previously mentioned expensive Tesla/Mini. But you're also comparing apples to oranges here. The Volt is shooting for 40miles of EV range with a 16kWh battery. Toyota is shooting for half that, so probably a 8kWh battery and half the cost. There's no way Toyota is going to price it over the Volt unless they are shooting for massive profits out of the door.

Yes Toyota is very bullish on mass production of hydrogen fuel cells - and the infrastructure there is 10x more expensive. Never mind that for PHEVs, you don't need any infrastructure! All you need is a plug - those are everywhere! No special high power plug, either - we're only talking a small battery. 98% of the time people will charge at home. Never mind that Nissan is already planning on installing thousands of fast-charge stations in a number of major cities. Toyota doesn't have to do a thing here.

I don't think that anyone sees it any other way. We're not talking about moving completely off gasoline here in one giant step. We're talking about plugging in to significantly reduce oil consumption when it makes sense! And it does in a large number of situations!

GM has already said they are planning on giving the Volt battery the standard CARB 10 year/150k mile warranty. They are only using about half the available capacity of the pack to ensure durability.

Stop worrying about the battery. It's no more likely to fail than your engine or transmission - both of those are also multi-thousand-dollar replacements, too. Do you lose sleep at night wondering if your engine is going to throw a rod out the side of the block?

Crossing my fingers. Would love to have an EV and a PHEV in my fleet within the next two years!

There was nothing Toyota could do about that - so it's not a valid excuse. You have to use the EPA fuel economy numbers. Because the Prius did so well on the test just means that the test has flaws. They changed the test and now the numbers match up much better with real life.

 

It's not an excuse, it's an example. You're right that there was nothing we could do - it was required by law and the only proper way to compare cars.

But it's still a valid argument that the message to consumers was 60 MPG (even though Your Mileage Will Vary!), and when it did not meet expectations for some, they were unhappy. The lesson is don't do that to ourselves when possible.

Actual - Expectation = Value

Doug Coleman
Prius Product Manager
Toyota Motor Sales, USA

Edit: LOL couldn't even write the equation correctly 1st time.

 

So let's go back to 2004 with the launch of the Gen-II Prius - how do you avoid the issue that EPA testing shows significantly lower fuel economy compared to real life? Do you deliberately tune the Prius so that under EPA test conditions numbers match more closely with real life, giving up fuel economy when driving conditions are similar? Do you make a bigger deal of "YMMV" when you really can't?

 

thank you, thank you...

one parting shot i meant to add but had a very hungry 2 year old to deal with first.

availability is the key to any product success, especially when its new, untested technology. If the RAV 4 EV would have been available nationwide, i think that EV's would be much farther along today. even if the product was only available by special order, it was a BIG mistake to market it in one state only.

granted, it probably still would have failed, but i think the seeds of EV thinking would be much more mature today. in some areas of the country, there is really no seed at all.

 

ME ME ME ME ME! We have two 2009s and I'd gladly donate one to Toyota for a PHEV conversion.

Very well said. Not everyone has the vision to plan ahead effectively, to say nothing about having the moxie to follow through on those plans.

(Private to Prius Team: My wife loves her Prius but desperately wants a hybrid MR2 - in white with tan leather interior. Build it and I promise to be your first customer. I just wanted you to know that.)

 

$8.0k - ICE
$3.5k - Transaxle
$5.0k - PHEV Battery
($2.5k) - HV Battery
----------------------
$14k

Retail price for the ICE is $8k. Transaxle is $3.5k. Plugin battery pack (replacing $2.5k HV battery) is $5k (20 miles). You are looking at $14k that the Fuel Cell stack would replace. I subtracted HV battery price because FCHV will have a HV battery pack.

What it comes down to is..... If a 80kW (same as 2010 Prius ICE power) FC stack costs $14k, FCHV can be as affordable as the Prius. That comes out to $175 per kW of FC stack. DOE record indicated that the cost was estimated at $110 per kW in 2005.

FC stack can further downsized by using larger battery as well. There would be some room to balance out the minimal cost between battery and FC stack size.

I think Fuel Cell is within reach.

 

The FC solution points out another key drawback to the EV option.

Anyone can pull up to a refueling station in an FCHV, fill up and drive away. No one is excluded because of who they are; rich/poor, man/woman, black/white/brown. The only limitation is whether there's a refueling station nearby. That's the same as it's been for 100+ yrs first with the ICEs and now with the gas/electric hybrids. This keeps ownership open to anyone and everyone. The manufacturer is neutral in this case excluding no one.

In the case of the EV, EREVs and PHEVs certain groups of citizens will see themselves excluded from buying simply because they have no where to plug in the vehicles. This is not good for promoting the widespread acceptance of the vehicle to the masses. It also leaves the maker open to a lot of negative accusations.