## Toyota President Outlines Action Plans for Automotive Energy Diversity and Lowering Carbon Footprint

##### 11 June 2008

Toyota Motor Company (TMC) President Katsuaki Watanabe outlined the company’s new action plans in the areas of research and development, manufacturing and social contribution for promoting energy diversity in automobiles and reducing its carbon footprint.

Hybrid drive technology remains a core strategic element for Toyota, but Watanabe briefly touched on a number of other powertrain and fuel initiatives that Toyota is undertaking, ranging from short-term efficiency gains in gasoline engines to the longer-term focus in areas such as hydrogen and successors to lithium-ion battery technology. These initiatives include:

• Packaging and weight. TMC is working on initiatives to reduce vehicle size and weight. The iQ, planned for launch this year, seats four people in a body less than three meters long.

• Gasoline engines. Average fuel efficiency for new Toyota vehicles sold in Japan rose by approximately 28% in the 10 years from 1997 to 2007. TMC will introduce new 1.3-liter and 2.5-liter engines in 2008. The new 1.3-liter gasoline engine is equipped with the newly developed Toyota Stop&Start System. By the end of 2010 TMC will complete the transition to a new series of highly efficient engines and transmissions.

• Transmissions. While continuing to advance multi-stage automatic and continuously variable transmissions, TMC will introduce an efficient compact six-speed manual transmission in the fall of 2008.

• Hybrid Vehicles. TMC is working to further reduce the size, weight and cost of motors, inverters, batteries and other hybrid system components. In addition to already producing hybrid vehicles in China and the United States, TMC recently decided to produce hybrid vehicles in Thailand and Australia.

• Ethanol. In 2006, TMC adapted all of its vehicles sold worldwide to E10 fuel and in May 2007 introduced flexible-fuel Corolla models in Brazil that can run on E100. TMC will introduce the E85-compatible flexible-fuel Tundra and Sequoia in North America in 2008.

• Electricity (Plug-in Hybrid Vehicles/Electric Vehicles). Toyota reaffirmed that by 2010, it will introduce a plug-in hybrid vehicle equipped with a lithium-ion battery, geared toward fleet customers in Japan, United States and Europe. TMC also plans to accelerate development of small electric vehicles for mass production.

• Battery R&D and Production. TMC is establishing this month a battery research department to advance the development of a next-generation battery that can outperform a lithium-ion battery. Panasonic EV Energy Co., Ltd., a joint venture TMC established with the Matsushita Group that is conducting joint research on batteries for use in automobiles, will commence limited production of lithium-ion batteries in 2009, moving into full-scale production in 2010.

• Hydrogen (Fuel Cell Hybrid Vehicle or FCHV). The Toyota FCHV-adv (earlier post), the latest version of its fuel cell hybrid, received vehicle-type certification from Japan’s Ministry of Land, Infrastructure and Transport on 3 June. The FCHV-adv features a 25% improvement in fuel efficiency, and, through the use of TMC-developed 70 Mpa high-pressure hydrogen storage tanks, has a single-fill-up cruising range of approximately 830 km (in the 10-15 Japan test cycle; 760 km in the JC08 test cycle; as measured by TMC), which is more than twice the cruising range of its predecessor, the FCHV.

Watanabe said that Toyota is steadily overcoming the technological hurdles associated with fuel cell vehicles and will focus next on solving problems related to maintaining reliability and reducing costs.

• Alternative Fuels. TMC is researching the production of cellulosic ethanol via fermentation by yeast. The company is also conducting joint research with Nippon Oil Corporation on high-concentration bio-hydrofined diesel (BHD) as a bio-fuel alternative to petroleum-based diesel. So far, the research has led to vast improvement in the oxidative stability of BHD, enabling the fuel to perform on par with conventional diesel.

Toyota is also conducting research on biomass-to-liquid (BTL), which is derived from the syngas resulting from the gasification of all types of biomass, including cellulose.

Watanabe said that automotive technology alone will not solve global warming and energy-related issues; it is also essential to address these issues throughout society, taking into consideration the actions of drivers and the state of the transport infrastructure.

In terms of infrastructural development in Japan, TMC is working with various government ministries to improve traffic flow by reducing traffic congestion. One potential method for accomplishing this is to find practical applications for the Probe Communication Traffic Information System, which gathers traffic information and provides drivers with specifically tailored driving information.

As one way to support environmentally considerate driving, TMC will increase the number of vehicle series equipped with the Eco Driving Indicator, which lights up when the vehicle is being operated in a fuel-efficient manner, and with the Eco Driving Mode Switch, which puts the vehicle in an energy conserving mode by monitoring and controlling such functions as gear-shift timing and air conditioner settings.

TMC is reducing CO2 emissions from its production activities, based on its Fourth Toyota Environmental Action Plan (2006 to 2010). Because TMC has already achieved its original 2010 targets, it has set new targets and strengthened its approach.

All sounds great, but is the A-Bat a go?

All the things Toyota is doing as mentioned above are well and good, but what worries me is that making cars more efficient may simply serve as an enabler for the world to have more cars. Then, we'll be back to where we started from because even if we use less fuel per vehicle-mile, we'll also end up carrying out more vehicle-miles (or, vehicle-kilometers if you prefer).

In addition, how is Toyota or anyone else for that matter, going to address the issue of politicians squeezing the auto industry harder and harder on both fuel economy AND safety? Here in the US for example, there are laws pending that would require doubling roof crush strength to deal with the problem of rollover accidents.

What Toyota ought to be doing in my opinion, besides all the good things they mention above, is to develop public transit buses that young people will consider cool to ride on. If they do, btw, I prefer not to hear a peep from anybody here in the US about buying American. I see no point complaining the world is coming to an end from global warming, and then also crying in one's champaigne about American jobs being lost if transit agencies were to buy first-rate buses from Japan or elsewhere.

Im surprised CEOs do this, is good for the world to encourage other manufacturers to follow them and pull their finger out, but bad for Toyota as reduces their likelihood of stealing a march on their competitors.

It is interesting that Toyota now enter the battery R&D business directly by setting up their own lab. It could very well be that the single most important technology to stay competitive as a vehicle manufacturer in the coming decades is to have the right battery/capacitator technology. It is perhaps smart to take all the patents on this technology and then outsource production to others. Anyway it is great that more large companies spend serious money to develop better electric storage technology. It will importantly increase the chance that breakthrough batteries are invented and mass produced. We need it to solve our compounding environment problems and get off fossil fuels.

Alex Kovnat: "Then, we'll be back to where we started from because even if we use less fuel per vehicle-mile, we'll also end up carrying out more vehicle-miles (or, vehicle-kilometers if you prefer)."

I don't think there is anything to worry about here.

The current world-population of cars is 600 million, and something like half of that is in the North America alone.

If that was doubled to 1.2 billion, and the fuel economy was improved by the North American "Prius factor" (2.5x or so), the result would consume less fuel than today, assuming driving patterns -- excessive or not -- persist.

Long term, those are PHEV's or similarly efficiency, which have factors hitting 5-10x current fuel economy. Do people even have the desire to drive their cars 2-5x as far as they do now?

Being profitable gives Tyota a leg up on the competition, especially here in the US, where, once again, the "Big Three" misread the tea leaves. No pun intended.
There are a few bright spots on the horizon for GM and Ford, but do they have the cash to sustain themselves over the long haul? As for Chrysler.....?

Henrik:

I'm with you on Toyota's willingness and capability to develop advanced electricity storage units (ESSU) much better than today's lithium batteries and probably be the first to mass produce practical and reliable electrified vehicles. I like Toyota's progressive approach, planned development and excellent products.

Alex:

The rest of the world has the same rights to eventually have a vehicle or two per family as Americans and a few other nations already have. With oil approaching $150/barrel, it is almost essential than the next one (1) billion cars be highly electrified, sooner than latter. That seems to be Toyota's intentions. We should not be surprised to see small BEVs, for much less than$10K, from China and India within 3 or 4 years. Those two countries may need a few hundred new power plants in the next 10-15 years. Let's hope that they will not all be coal fired type.

Gambling Doesn’t Pay

Because their biggest and most profitable customer has no energy policy, Toyota is covering all the bases. They are anticipating the development of a policy by the next administration by getting off the mark in many areas, so they can hit the ground running in the upcoming few years.

It must be a confusing environment for the car company strategists in this transition period.

Toyota doesn’t gamble. A conservative approach is to do everything and not bet the ranch on any one narrow product line development area. (i.e. GM – Volt)

did anyone see the Senators on cspan talking about voting on a bill that would create what they call a consumption tax on electricity? They say this tax will
generate trillions of dollars.

I have a regular hybrid (Camry) and I'm thinking that, even with the small battery I have, it would help my mileage if I could plug that in to "top up" and maintain maximum charge when I get up in the morning.

Which senator was that?

Not much on diesel... What a shame.

@jerry/LuLu

That was the Warner bill. It was tabled by filibuster. But both presidential candidates are committed to a carbon cap so in the next term it will be reintroduced and passes. I'm sorry.

@HarveyD:

Given that not only are cars sucking dry the world's petroleum resources (not to mention the possibility of global warming being caused by cars) but also killing hundreds of thousands of people a year, I'd like to play devil's advocate and argue that perhaps NO NATION has a "right" to a car for every family.

Let's look at American society: In many suburban life style situations, young people are barely this side of not even being able to go to the bathroom without access to a car, or the presence of an adult with a car, to drive them to the out-house. As a result, parents are letting their adolescent sons and daughters drive when they're no more than 17, with tragic results in many cases. I wouldn't be surprized if this were happening in China and India too.

If China, India, Brazil, etc., want to make it their national policy to have a car for every family, then I suppose there's not much we Americans can do about it. But: If we encourage exports of American-built cars to create jobs for our auto workers, what's the difference between that and encouraging exportation of cigarettes to provide jobs for tobacco farmers?

The majority of the population in developing countrys can't afford an automobile, but over time that will change. Conversely, the aging population of Europe, Scandinavia and America may mean more one car families since their lives are less demanding, not to mention the expense. One certainly won't offset the other but every little bit helps.

Its good that Toyota is vertically integrating.

But under the novel anti-Trust rules that the Democrats have created in the 1990s, the automakers could never follow in Toyota' footsteps.

The UAW has forced Detroit auto makers to shed their old vertical integration. But Delphi and Visiteon are grandfathered, but are impossible to create today, under the litigious anti-Trust laws of today.

Under the extension to anti-Trust that Democrat prosecution of Microsoft produced, American firms cannot vertically integrate, for example, buying or creating their own suppliers such as a becoming a battery maker,as toyota, Nissan and Honda are doing. Microsoft precedents would end up suing GM or Ford if they tried, to absorb a battery maker, just as Microsoft was prosecuted for trying to purchase/merge Intuit, or prosecuted for producing OS extensions in functionality such as Internet Explorer. It is easy to see the IE for example is puposely constrained in functionality so as to not run afoul of anti-trust.

We the consumers get screwed, as a consequence. One way si that is it a lot like buying an auto in 1915. See one firm for an engien, another for a chasis another for a starter motor, another for a battery, another for a windsheild et cetera. it really used ot b ethat way.

Think if whatyou have to do with a PC, today.

Tiny Apple with a small market share was exempted,and the professional integration of all components makes Macs expensive; limited in choice of haredware or peripherals. Bur at least all the pieces work together, and the owner is not forced to be a system integrator, himself. This was the advance that Henry Ford ansd Alfred Sloan brough to auto buyers inthe 1919s and 1920s.

Democrat's make it illegal to do today.
Another example of having way too much government, already.

Alex,

I think we need to look at PRT. AAA figures it cost over \$1000 per capita per year for auto accidents, and I would bet that represents more than 25% of US health costs. Put people in vehicles on tracks and you can save energy, money, time (congestion), and lives -- 40,000 per year in the US alone. It is time for the auto as we know it to go away.

@Alex Kovnat

The Punch Bowl

The global punch bowl is draining; the icing on the party cake is melting. Will we struggle against reality: unending oil war? Or will we sink slowly, quietly into the soft warm malaise of poverty with the joys of Christmas past a fading memory: no shiny new cars; vacations gone, no new toys from china, and no more wine from France. Economics is a harsh mistress exacting a painful and enduring price for our pass sins of gluttony and excess. The contours of our future are now uncertain but frugality will rebound and eventually dominate our lives.

If you like this post also see “Christmas Past”.

a consumption tax on electricity? They say this tax will generate trillions of dollars.
It would take a long time to do that, because the USA only uses about 4 trillion kWh/year and only about 2 trillion kWh is from coal.

Then why is the 2010 Prius to be more powerful ? The 1.8L engine and 120Hp traction motor. Who called for more power ? And didn't they say they would reduce the weight of HSD parts by half ? The vehicle is said to be "not significantly heavier" than the previous generation. These future plans for development are OK but the reality is that someone at Toyota doesn't seem to be with the president's program here.
T2

"Put people in vehicles on tracks"

Visited some freinds in Dallas. Parked at the park and ride and took the light rail to the stadium. When we got back to the park n ride 3hrs later, the car was gone, never seen again.

The wife and I went to NYC for a week. By the third day she refused to ride the subway. Was it because it's crowded? No Was it because it's dirty? No Was it because it smells? No It was because in 4 trips she had been groped (sexual assaulted) 3 times.

Railed mass transit, not so great.

5% of the world population (North America) uses ¼ of the worlds energy, and drives ½ of the cars.
The rest of the world thinks North Americans are greedy but wants to begin living at those same standards. I think they should and can improve their standards and have access to energy and transportation.

Obviously the rest of the world will not drive on gas like north America or Diesel like Europe, because there simply is not enough of these fuels for such an increased usage.
The top options are Hydrogen made from Electricity, or Electricity. Batteries are more efficient but still lack range, a defect that is rapidly being overcame.
The other hurdle is in producing electricity. More, the rest of the world needs to make the bulk of it's electricity from non-oil sources, preferably clean renewable ones, and not coal. This is already occurring.

Wind power is the fastest growing world wide energy supply type with more wind energy added by percentage last year than from any other source. Wind energy capacity is now cheaper to install than coal, and takes no fuel and little maintenance. Wind Turbine manufacturers are doubling and tripling production and are still sold out for the year.

Politicians can never get too far from this reality, and neither can business.
We notice that Toyota has a finger in each technology pie. Hidden in the bottom of other efforts is the technology bombshell “TMC also plans to accelerate development of small electric vehicles for mass production.”

We don't need to be geniuses to realize that wind power electricity and small electric vehicles in mass production will change everyone to electric cars and fast. People want to buy a car they can refuel, not one they know has a fuel shortage.

I agree with the view that reduction in consumption will be more than offset by an increase in the number of cars on the road. The 5-10 fold increase in fuel economy that some anon poster sees possible is way, way too optimistic (or he is only counting gasoline consumption, not electricity).

Whether these people in China & India & other regions have a right to a car or not is a filosofical discussion. The reality is that they will assume that right and excercise it.

To elaborate on the point that Henrik already made, Toyota is taking on board battery technology for two main reasons:
1. All EV's will feature >90% efficient electric motors and >90% power electronics. Who cares if it is 92% or 94%? Motor and electronics are very mature technology. The battery will be the differentiator between EV's (and to a lesser degree, HEV's and PHEV's).
2. It will be the most expensive part of any EV. If you want to earn money from an EV, better make the battery for it. The rest of it is standard low-margin stuff, 20th century technology.

@Joseph:

Visited some freinds in Dallas. Parked at the park and ride and took the light rail to the stadium. When we got back to the park n ride 3hrs later, the car was gone, never seen again.

That's why railed mass transit is so good: your train will never be stolen.

I couldn't let this one pass :-)

Alex:

The car industry will change drastically during the next 20-30 years. Gone will be the Big-3's polluting ICE dinosaurs. One or two the the Big 3's may go with them.

Countries with not much oil but very large population, like China and India, will mass produce much lighter, cleaner, cheaper electrified vehicles to give their people the required level of mobility. For every dying ICE dinoaur, up to twenty new small BEV will be built. They may not all have four wheels, will definately not weight 3 to 4 tons each, will not go 200 kph, but they will transport 2 to 4+ people around from A to Z fast enough with an acceptable level of comfort.

Western Europe will have to take almost the same (electrification) path because they don't have enough oil nor the land to produce enough agro-fuel for their increasing fleet.

USA's attempt to continue with gas guzzlers from grain ethanol is not sustainable and will have to be abandonned. However, USA, Brazil, Canada, Russia and a few other very large countries, could produce enough cellulosic fuel to support large high efficiency PHEV fleets for many decades. The inevitable will happen
here too. Our vehicles will also be mostly electrified by 2030.

The big difference is that 5% of the world population will no longer own 50% of the world vehicles but 20% or even much less.

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