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Report: Toyota Targeting Production of Approximately 1M Hybrids In 2011, About 2x 2009 Level

The Nikkei reported that Toyota Motor Corp. plans to double its global production of hybrid vehicles from the 2009 level to 1 million units in 2011.

The automaker recently notified parts suppliers that it intends to roll out about 800,000 hybrids domestically in 2010, with the figure to be raised to around 900,000 in 2011 and roughly 1.1 million in 2012.

Given that Toyota now produces about 90% of its hybrids at home, global output of such vehicles is expected to surpass 1 million in 2011 when those assembled in China, the US and elsewhere are included.

Toyota currently sells more than 10 hybrids, including dedicated models such as the Prius, Sai and Lexus HS 250h. Toyota plans to boost production of these existing vehicles in addition to launching new hybrid minivans, subcompacts and luxury cars, according to the report. Toyota currently assembles hybrids at six domestic factories and four overseas sites.

Toyota’s plans call for domestic output of 550,000 Priuses in 2011, up roughly 40% from the projection for 2009, according to the Nikkei.

Comments

Account Deleted

Much of the demand for the Prius and other hybrids is due only to the fact that they are more fuel efficient than non-hybrids. That part of the demand should be expected to go away when the first EVs and PHEVs hit the market later this year and enter volume production by 2012.

My point is that ordinary hybrids will look like (and indeed be) gas guzzling hummers in comparison with any EV or PHEV (even the Karma by Fisker can do 100 mpg). One could object that EVs and PHEVs will not be in any important volume to hurt the sales of hybrids. However, with Nissan/Renault’s plans to do half a million 24 kWh EV batteries by about 2013 I don’t think so.(1)

The global automotive industry is facing unprecedented fast change in the coming years because of the arrival of 1) Chinese manufacturers, 2) EVs and PHEVs and 3) a permanently changed vehicle tax system in all major markets that favors fuel efficient cars. Those companies that don’t adapt fast enough to these changes will die.

1) http://www.greencarcongress.com/2009/11/report-nissan-to-build-jv-liion-plant-in-france-in-2012.html

HarveyD

Henrik:

I hope that wou are correct. Toyota will have to market PHEV and BEV versions of their HEVs. They will certainly do that within 2 or 3 years. It has already happened with the Prius limited e-range PHEV.

By 2015, all major vehicle manufacturers will have to market many sizes of PHEVs and BEVs if they want to stay in business. Competion will be fierce. China and India may flood the world market with very low cost PHEVs and BEVs.

A very interest decade ahead.

Nick Lyons

@Henrik:

From an personal economics standpoint, there is a huge difference between replacing 20mpg with 40mpg vs replacing 40mpg with 80mpg. The law of diminishing returns kicks in in earnest once mileage gets above 35-40mpg, and further improvements, while increasingly expensive, return less and less for the money invested. People who see cars as transportation expense are going to do these calculations (how much gas am I going to save over the life of this car?). Gasoline would need to be much, much more expensive to justify paying a big premium for 80-100mpg.

Account Deleted

Nick
If people where seeing cars only as transportation expenses we would all be driving Tata Nanos. Obviously we don’t. Most people view cars as status symbols, as means to signal lifestyle and one of the better opportunities to spend extra on something you don’t need but nevertheless would be nice to have. Once you are able to get the +100 mpg cars they will be in demand because it will become politically unacceptable not to drive such a car if you can afford it. Wait and see.

With regard to the economics of EVs we will all know more about that when Nissan announce the price for the Leaf and GM the price of the Volt. I expect Nissan to surprise positively because it is the only justification there is to make these unprecedented large investments in battery factories as Nissan/Renault are making. Either that or Carlos Ghosn (their CEO) has gone mad.

Engineer-Poet

How expensive is "can't get any"?  PHEV can do without liquid fuel for short distances, which allows people to cope with issues like failed pipelines without turning their lives upside down.

Patrick

Good point E-P,

Just imagine if people in the Gulf Coast area had PHEVs. The shut down refineries would not have mattered very much. Atlanta had price spikes near $4/gallon when the rest of the country was at about $2.50 to $2.75 per gallon.

Patrick

...I got ahead of myself - I meant had PHEVs during hurricanes like Katrina

Nick Lyons

@Henrik:

I agree people buy cars for lots of reasons, but for those motivated in part by overall expense (including capital cost and ongoing fuel/maintenance cost), going from 40mpg to 80mpg just doesn't save that much money for the average driver. And as for demand for 100mpg cars, your average Joe is only going to buy one if it makes sense economically; I don't think political correctness drives the car-buying decisions of most people. There is a niche market for green-boutique cars, but the larger market is driven by other considerations, IMHO. I do believe there is a large market for greener cars, which have incremental improvements in mileage with small increase in cost.

HarveyD

NL:

Why did millions buy Hummer type 3+ tonnes vehicles in the last 10 years? Not because they were cheap to buy and to operate. Not because they were realy required to drive to work or drive the kids around.

Is it because $$$M repeated Ads kept telling us that those very large vehicles were safer and it was American like to drive them. Bigger is better was repeated ten million times until potential buyers broke down and bought those monsters. The neighbours had one or two so we had to follow.

I guess, if we could convince millions to buy large heavy gas guzzlers, the same $$$M repeated Ads could convince as many to by 100+ mph PHEVs and BEVs.

ToppaTom

People will transition to HEVs and/or PHEVs and/or RE-BEVs when they are 1) economical, 2) practical and 3) feed their egos. The last one is fickle and difficult to define (like, why SUVs?) but the first 2 are what “fueled” the big American cars (including SUVs).

I don't recall any adds telling us that those very large vehicles were safer and it was American like to drive them, much less repeated ten million times.

And as Nick says, once you drop your weekly cost at the pump, from $15 to $7, there is not much (rational) reason to go for $3.50.

The auto makers will stay in business by making cars cheaply and making the cars people buy; not by making cars we wish people would buy, and will probably not have much trouble adapting as fast as battery prices drop.

Will S

I don't think political correctness drives the car-buying decisions of most people.

The Department of Defense has noted the national security risks associated with foreign oil imports and global warming for years (see below), so don't confuse this with political correctness.

People will transition to HEVs and/or PHEVs and/or RE-BEVs when they are 1) economical, 2) practical and 3) feed their egos. ...the first 2 are what “fueled” the big American cars (including SUVs).

SUVs are anything but economical, and 'practical' is in the mind of the person making the rationalization.

I would add one more category - 4) decision to be responsible from a national security standpoint.

Pentagon and Peak Oil: A Military Literature Review

Climate Change and National Security: USAF

.

Mark_BC

"And as Nick says, once you drop your weekly cost at the pump, from $15 to $7, there is not much (rational) reason to go for $3.50."

The other issue beyond cost of fuel is cost of maintenance. Once you can get sufficient batteries in the car to justify ditching the ICE altogether and become a pure EV, your maintenance costs go WAY down (hardly any moving parts in an EV). This could easily justify a $5000 premium of an EV over an ICE, everything else being equal.

Bernard

I'm not at all convinced that maintenance will be noticeably cheaper for EVs. Modern engines require one or two oil changes per year, and spark plugs every 4 years or so (no spark plugs on diesels, of course).

The really expensive stuff is in the suspension, brakes and electronics. You could argue that EV brakes will last longer, but that will vary on a case-by-case basis. Some cars need brakes every 20K, and some every 80K. It really depends on the quality of the components.

EVs will also need new batteries at least once during the life of the car. You can bury the cost elsewhere (leasing the battery, warrantying the first pack, junking the car), but the buyer is still footing the bill in one way or another.

The other hidden cost will be rapid obsolescence until the technology matures. Here's an analogy: a five year old digital camera is worth almost nothing because it is several generations old. Stuff that was high-performance in 2005 (i.e.: 6 megapixel) wouldn't even compare to today's entry-level models. In the same way, a $40,000 2011 EV with a 90 mile range will be almost worthless by the time second and third-gen EVs become available, especially if it is due for battery replacement.

Engineer-Poet

The real issue isn't the battery (which can be swapped out), but the rest of it.  You're assuming that current-technology batteries won't be available for 2010 cars in 2020.  I think that assumption is questionable at best.  If the 2020 battery stores 50% more energy than the 2010 battery and costs half as much, the 2010 car will be worth upgrading (the battery will cost much less than a new car) and will be better than new afterwards.

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