Hybrid vehicles: Must US automakers compete?
DOA: Chevy Malibu hybrid
Can US automakers compete?
So, Toyota is going to sell 1 million hybrid cars per year within the next few years, but by 2015 at the latest. Obviously, 1 million units of any vehicle per year is a pretty big sale’s number – a number that has to catch the attention of any major automaker.
Will the Big 3 respond to that big hybrid number?
While GM has supposedly leapfrogged Toyota with the Chevy Volt, almost every single forecast available claims that hybrid sales will far outpace plug-in sales through at least 2030. Can any automaker afford to avoid this space?
In the last year or so, Ford has sounded game to challenge Toyota. Of course, we’ve heard such hybrid bullishness from Ford in the past. Fortunately, today’s Ford is a much different company.
Can US automakers watch Toyota sell 1 million hybrids per year, with plans to scale much higher, without a serious hybrid challenge? Or, are the experts wrong and hybrids are already a dead technology?
David thanks for sharing a information.I continue to use an older car which is in good operational function because the lower MPG at this point still does not warrant replacing it, with a hybrid or otherwise, if the overall impact to the environment is going to be negative. Toyota electric hybrid vehicles really drive very well. They look nice, they are very silent. The only characteristic I lack, considering these ultra modern cars is the size.
yeah. and, those kias and hyundais are coming on stronger than ever. interestingly, at least in terms of forecasts, hyundai is planning to catch up to toyota’s hybrid production by the end of the decade – but they aren’t a US company so i didn’t mention them.
Conventional wisdom with any technology is that once it starts mass-producing, the supply and logistics chains will be developed/optimized and the price will come down.
Toyota is clearly investing in that direction while GM and Ford seem to be tiptoeing through the tulips only so far as for them to be able to say “we have hybrids also”.
Remember when Toyota’s were called “cheap” Japanese rice-burners?
but Toyota kept right on producing smaller cars with a focus on reliability until they are now the gold standard – despite the kerfuffle with the accelerators.
I personally think Hondas are just as good and much under-appreciated and I cannot speak from personal experience but the Kias and Hyundais are certainly not going away either.
Still, there is an interesting distinction between Toyota and GM.
GM has undoubtedly invested a lot of money into hybrid and EV powertrains, just as has Toyota. Yet, as Bob Lutz often loved to say, much of that can be recovered via marketing. Lutz has always referred to the Prius as a marketing investment and once even claimed that GM probably should have diverted a fraction of one year’s marketing budget into a prius-competitor, for marketing.
Perhaps he was being a bit facetious, but overall I think he meant it. And, despite the criticism Lutz regularly is the recipient of, he’s a very smart person.
Nevertheless, GM’s Volt investment seems much safer than what Toyota is doing. It will be at least 5 years, possibly much longer – if ever – before GM is producing even 100,000 Volts per year. Thus, they can still sell more profitable vehicles and use the Volt to both balance their CAFE requirements, stay in the battery game, and take advantage or green PR.
On the other hand, achieving 1 million hybrids per year with plans to more than double production to more than 2 million hybrids per year by 2020, takes a lot of profit potential off the table for Toyota, assuming hybrids aren’t very profitable.
Can they do that simply because they have a huge bank account, thus they can afford to take a bigger gamble?
Likewise, on a side note, if I’m not mistaken, Toyota will soon be done paying royalties on NiMH patents. Perhaps that’s a bit of wild card.
I think what defines the situation is that it is unclear how things will work out and that’s not a great environment for investing whether it be Toyota or GM or just about anything.
Great angle, Larry.
Today, Toyota claims it makes money off every hybrid sold. Others say that might be true, but they still have not yet recovered their investment costs. So, profitability is a still a question mark.
Nevertheless, it would seem that if Toyota can manage a profit off hybrids, even if meager, then selling more hybrids would eventually recover the investment costs; and if gas prices increase, then they could become quite profitable. Still, that’s leaving a lot of potential profit on the table in the interim.
Yet, Toyota, from what I can recall has been bearish on the economic recovery in the US and the world. If that position is taken, then it would seem that gas prices probably – another gamble – aren’t going to be hybrid supportive for several more years, if ever.
For instance, what if algae is cracked and can replace 25 percent of the world’s oil? Perhaps natural gas is also added into the equation for another 10 percent. Might this not remove the possibility of any serious gas spike in the next decade or more? In such a scenario would hybrids still be needed or not? My gut says not much beyond today’s penetration levels, unless the technology can quickly pay for itself. Toyota would know far more about that than any analyst or automaker as they are far deeper into the technology, it’s progression, as well as the supply chains. Still, that doesn’t mean they’ve extrapolated that. This might purely be about the potential of CO2 legislation and higher energy prices.
Without question, there is a gamble going on here, but I’m inclined to believe that Toyota is much less of a gambler than any of the Big 3, but I’m far from over-confident about that statement!
let’s assume a hypothetical here.
Let’s assume that Toyota is selling their hybrids at a loss in an attempt to gain more market share especially if gasoline spikes.
And let’s assume that the US Automakers know this and have decided not to sell hybrids at a loss.
what next?
is Toyota gambling? Is GM/Ford gambling?