Lithium revolution dependent upon Toyota and hybrid cars

Plug-in Prius too rationale for electrification hype

OPUD: Over-promising and under-delivering the battery-powered future

I find it terribly unsettling how often fans of electrification ridicule Toyota. They don’t even use lithium in their conventional hybrid cars, they claim. As if all the lithium powered mild hybrids, full hybrids, plug-in hybrids and electric cars on the market today are dwarfing Toyota’s NiMH-powered sale’s advantage. In fact, if not for Toyota’s NiMH hybrids, there would have been far less cause for other automakers to try to leapfrog Toyota’s Prius with plug-ins like the Volt or the Leaf — which are more halo than sale’s products today.

Likewise, it is often claimed that Toyota’s upcoming plug-in hybrids don’t offer enough electric range, even though it’s beyond obvious that the key to plug-in success isn’t really about range today, it’s about cost.

Even more ironic, it seems quite obvious that the lithium revolution in the automotive space itself has become dependent upon Toyota, at least if it’s going to happen anytime soon.

In just next the few years, Toyota should be selling more than 1 million hybrid cars per year, and by around 2020 or so that number could be as high as 2 million or more hybrid vehicles. That will require extensive battery supply chains — an endeavor in which Toyota already has immense experience thanks to NiMH — and it will almost certainly require lithium. Interestingly, Toyota has already also secured large amounts of lithium supplies.

But Toyota has been focused on the wrong the lithium battery technologies, so say the critics, especially since car guru Bob Lutz — co-father of the Chevy Volt — started saying that years ago. Of course, Lutz also claimed GM’s BAS and dual mode hybrids would also be superior to the Prius.

Anyway, so some other automaker has perfected the right lithium battery technology? After hearing this argument for years now I still haven’t seen any proof in sales. When is this lithium sale’s revolution coming, driven by what vehicle?

It’s going to take years to scale up production, it doesn’t happen overnight, right? OK, but aren’t battery technologies going tochange over those years as well, affecting supply chains, production forecasts, etc.?

Moreover, I bet if you pooled all the automotive battery experts and analysts in the world about the right battery technology for the electrification revolution, they’d tell you such a battery doesn’t exist today. Even if it potentially exists, it’s so far from cost-effectively mass producible that it could easily be decades before there is any chance it could dominate the auto industry. Lest anyone forget, the bulk of today’s lithium battery technologies have now been around for more than 30 years.

Still, lithium battery technologies are moving ever closer to being able to challenge segments of the automotive market, but that is a far cry from claiming that lithium is on the verge of dominating the auto industry.

Nevertheless, once Toyota can produce a lithium powered Prius for the same price and reliability as a NiMH powered Prius, then there is nowhere for Prius prices to go but down, and Prius and hybrid production to go but up. That also means better prices for Toyota’s plug-in hybrids and their electric vehicles — and for the rest of the auto industry.

Ultimately, the lithium revolution isn’t going to be about just one auto maker dominating the battery industry — that argument is only waged in terms of halo products. It’s PR, not sales, driven. It’s going to take the whole industry’s acceptance of batteries to achieve the kind of scale to match internal combustion engine production and scale, for instance. That’s going to take time and it’s going to take more than plug-in vehicles, especially in the short-to-midterm.

Take away the $7500 plug-in tax credit and most lithium vehicles are pretty much dead in the water. Even with the $7500 tax credit, last year’s sales demonstrate the market for plug-ins is still very small until prices drop and range increases — significantly.

Therefore, instead of mocking Toyota for focusing on sales instead of posturing, I think it more productive to contemplate ways to incentivize Toyota to build lithium hybrid cars, especially ones assembled domestically. Imagine Toyota manufacturing 1 million lithium-powered hybrids in the US every year, while also helping to nurture and to support new and local supply chains for electrification-related parts that benefits all US automotive production.

That might truly fire up the lithium revolution.

In terms of electrification, Toyota is still far ahead of the pack when it comes to the metric that matters most: sales. And based on forecasts through the next decade provided by the major automakers themselves, Toyota’s production plans aren’t only more aggressive than the rest of the industry, but they appear more realistic.

In the past Ford has over-promised its hybrid program, just as GM over-promised its BAS and dual mode hybrids, and one might soon make the argument that the General also over-promised, but under-delivered the Chevy Volt — at least in terms of interim potential.

Toyota, on the other hand, has largely nailed its hybrid forecasts through the years. Perhaps instead of ridiculing Toyota for delivering on its promises, we should instead ask why other automakers seem to habitually use OPUD as the key to their fuel efficient efforts.