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Toyota’s Hybrid Math
3 August 2005
Car Buyer’s Notebook takes a look at Toyota’s stated goal of having 25% of the company’s vehicles being hybrids by the end of the decade, and a one-million-hybrid sales mark globally within two to three years after that...and finds it plausible.
In July 2005, Toyota sold 14,517 hybrid vehicles, between the Prius, Highlander and Lexus RX400h. The Prius sold 9,691 units, representing 8.9% of Toyota-brand passenger car sales—and third in volume only to the monstrous mass-market sellers, the Camry and Corolla.
Press has said about 600,000 of Toyota's million unit goal will come from the U.S., which equates to 50,000 units a month.
Looking at the 14,517 unit mark this month, that goal doesn't look so blue sky, does it? Also, consider that Toyota will have an additional 10 hybrids available, which more than quadruples their current offerings—and Toyota is merely talking about quadrupling monthly hybrid sales.
There’s more on the original report, but you get the gist: given what they’ve done, what they are goaling is achievable.
In other words, the stated hybrid goals are in line with what I would call a corollary of the Toyota Way—state a lofty sounding goal, but only after you have the structural underpinnings to support it.
A larger question, though, is what will the aggregate decrease in fuel consumption work out to be? If current design trends continue, if the Camry hybrid turns out to be optimized for performance (earlier post), if the rumored high-end Lexus hybrid is as much a firebreather as it sounds like it may be...in other words, if Toyota opts to sell to the performance end of the market rather than the fuel economy end...what will the net benefit be?
The Prius is sui generis...in a class by itself. Large enough to take the place of a conventional mid-size sedan (as the Insight is not), and without a conventional counterpart, the Prius is designed to optimize economy, not performance. (Not that it is sluggish. On the contrary, it’s great to drive.) The 1.5-liter combustion engine in the hybrid powertrain is smaller than that of any most other hybrids on the market or announced...save the Insight and the Civic. It also sells vastly more than any other hybrid on the market...including other Toyota models.
Toyota will likely be able to hit its hybrid numbers even based on a performance strategy—from that point of view, what’s not to like? They are offering versions of popular models with better performance, and better fuel economy (and yes, a higher price).
Better, however, would be a bifurcation in Toyota’s hybrid strategy. Give the performance-oriented their models—but expand on the basic concept of the Prius with plug-in versions, and with other vehicles optimized for fuel economy; downsized engines, plug-in hybrids.
Then we can see which class of hybrid (performance or economy), overall, sells better into the conditions that are developing.
August 3, 2005 in Hybrids | Permalink | Comments (13) | TrackBack (0)
Comments
Posted by: Mikhail Capone | August 03, 2005 at 09:06 PM
From NYT article today:
"Toyota does not appear to be betting on gas prices returning to $1.50 a gallon. At the same time, Toyota and Honda have been criticized for the diminishing fuel economy returns of newer hybrids like the Lexus RX 400h, as the advanced technology is used to enhance horsepower.
"A lot of that's software," Mr. Press said. "I think at some point you'll even have a button you can pick, mileage versus performance, because you're managing the system. And the other part of that is, it really depends on driving habits."
Posted by: Jeff Harmon | August 03, 2005 at 10:19 PM
Yeah, I just saw that and came back to ammend my post.
Thanks for pointing it out.
Posted by: Mikhail Capone | August 03, 2005 at 11:10 PM
In Europe and Asia the Prius has a switch that locks the car in electric only mode. This limits the car to 38mph and only uses the engine to recharge the batteries. The MPG jump up to 100 per 1 US gallon.
There is also a "auto park" function where the car will back itself into a parking lot or garage.
The USA Toyota headquarters stated both options could not be sold in the US for fear of being sued.
Posted by: Mike | August 04, 2005 at 02:56 AM
I don't think the goal is currently reachable. Something else will have to change. Either gas prices will have to keep going up to drive the gas-misers' purchases, or the economy will have to tip in such a way that Toyota gains additional competitive advantages.
Personally, I'm hoping the former. It frustrates me to no end that hybrid became equated with eco-friendly, and now the auto manufacturers are pulling a "bait-and-switch" and pouring the savings into more power. I don't fault the auto manufacturers, but its frustrating nonetheless.
At any rate, if more vehicle models are hybrid, then it will allow Toyota to tweak the MPG from year to year as a function of gas prices. So, if the gas prices go up from 2008 to 2009 by 15%, Toyoya could simply tweak the software to squeeze out another MPG or two, thereby offsetting the additional gas cost and allowing Toyota to really optimize sales regardless of the (uncertain) changes in gasoline price.
Posted by: stomv | August 04, 2005 at 05:34 AM
The whole idea of tweaking the software or putting an "eco" button seems pointless to me. At this point, most of these sophisticated engines like the Honda VTEC just adapt to whatever your right foot is doing.
If you put the car in eco mode and flog it, it's not going to give you better mileage. If every car just had feedback like the hybrids on gas mileage, the typical American driver might rethink zooming from light to light in urban traffic.
Posted by: Lance Funston | August 04, 2005 at 08:39 AM
"The 1.5-liter combustion engine in the hybrid powertrain is smaller than that of any other hybrid on the market...save the Insight."
The Civic hybrid uses a 1.3-liter engine.
Posted by: Greg | August 04, 2005 at 11:43 AM
Ooops, you’re right, my bad.
Posted by: Mike | August 04, 2005 at 11:51 AM
Personally, I would like to see them look at hybrid technology as just another powertrain option. I understand that is much more complex than simply plunking a different engine in, but why shouldn't the camry come with the options of the normal gasoline only three plus a hybrid I4 and a hybrid V6. Give the customer the option of performance or efficiency.
Posted by: Steve Nicklas | August 04, 2005 at 04:01 PM
^
Give 'em three choices, they'll take the middle one. It's almost a gimmie.
Posted by: stomv | August 05, 2005 at 07:13 AM
I've just finished sociologist James H. Kunsler's "The Long Emergency" and skimmed Matt Simmons' "Twilight in the Desert." Toyoya will quickly shift to high mileage software settings in Scion xA - xB plug-in HEVs. Reason, cash strapped customers. To quote Kunsler, the American consumer is "sleepwalking" at the end of the cheap oil fiesta. Who of us can really afford $10/gal gas (that's right,$200+/bbl crude) well before 2010?
Posted by: DeBernieBear | August 13, 2005 at 11:49 PM
Kunstler is a journalist/commentator, not a sociologist.
Posted by: JLA | August 17, 2005 at 09:48 AM
Hi, I hope this e mail finds you doing well! I have to do a power point presentation on why MATH is important. I want to do an interesting project on the MATH behind the hybrid car. If possible, could you give me some websites or any useful information to get me started?
Thanks for your time,
Dustin Altman
Posted by: Jared | December 02, 2005 at 06:10 AM
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What I'd like to see is a hybrid where you can switch modes.
Since so much is done with computers now, it probably wouldn't be all that hard to have both "eco" and "power" modes in the car. Everyday driving would optimize fuel economy, and the "power" mode would help attract "car enthusiasts" and impress reviewers.
Two birds with one stone.