Toyota Plans a Hybrid Strategy

Also ran: Toyota recently unveiled its new electric RAV4 at the Los Angeles Auto Show. The vehicle will go on sale a year later than Nissan’s electric Leaf.
Credit: Toyota

Energy

Toyota Plans a Hybrid Strategy

As Nissan and GM prepare to ship flagship electric vehicles, Toyota is taking another road.

Monday, November 29, 2010
By Kevin Bullis

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Nissan and GM will start shipping their flagship electric cars—the Leaf and the Volt—next month. Toyota also recently unveiled a new version of its RAV4 electric SUV at the Los Angeles Auto Show. But unlike Nissan and GM, which have put considerable effort behind the marketing of their electric cars, Toyota has made it clear that it regards electric cars as niche vehicles, and is pinning its hopes on hybrids instead.

Toyota will make just 35 test versions RAV4s next year before rolling out a production version of the car to customers in 2012.

Carlos Ghosn, the CEO of Nissan and Renault, with which Nissan formed an alliance last year, has said that 10 percent of all models sold by these two companies will be electric by 2015 (about 820,000 vehicles, according to sales projections by J.D. Power). This will start with the electric Leaf, a car with a 73-mile range, according to the EPA. Nissan plans to introduce hybrids, but at nothing near these levels.

In contrast, Toyota says that by 2015, 10 percent of its cars will be hybrids, or about 990,000 units, based on sales projections. Toyota sells more hybrids than any other automaker. Toyota is focusing on hybrids in part because it knows the technology works (it has years of real-world testing with the Prius).

The lithium-ion battery technology for the Volt and Leaf has been tested in the lab, and briefly in cars on the road—but no one knows how it will perform over the life of the vehicles. And the success of the Prius has enabled Toyota to drive down costs with high-volume production. These factors have led J.D. Power to predict that hybrids will be more successful than electric vehicles, outselling them three to one.

Many automakers are spreading their attention among several options. They are "doing a little bit of everything, because no one really knows what technology will be the winner," says Michael Omotoso, J.D. Power's senior manager of power-train forecasting. This means these automakers are making all-electric vehicles, ordinary hybrids, and plug-in hybrids, which contain larger batteries than ordinary hybrids and can be charged via an ordinary electric outlet. Plug-in hybrids can use less gasoline than conventional hybrids.

GM is marketing the Volt as an electric car although technically it is an extreme example of a plug-in hybrid. It runs entirely on electricity for about 40 miles, but can use gasoline for longer trips. GM plans to make 10,000 Volts in 2011, and 30,000 to 40,000 in following years. It's also planning a plug-in hybrid with a shorter electric range than the Volt, as well as a number of hybrids.

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