Green Cars and Toyota

Two years ago, when Toyota sponsored its first seminar on sustainable mobility, much of the talk whirled around the imminent threat of human-caused climate change. 

This time around, that message was far less clear and far less stridently presented. In fact, the room seemed to contain more than a few skeptics about the potential tragic aspects of climate change, not to mention the key driver of that change.

The realization that the climate is always changing, and often for reasons we just don’t understand, is gaining currency even in a group that is predisposed to feel than humans are the chief culprit in an imminent catastrophe. The American public as a whole appears to be even more willing to take a ho-hum attitude about global climate change.

With this as the background, Toyota was more ready than ever to concede that its efforts in the hybrid, plug-in hybrid and fuel cell arenas are driven as much by U.S. government regulatory policy as by the possible implosion of the world’s ecosystem. 

“Where the market used to be 100 percent consumer pull, now a percentage is regulatory push,” said Bill Reinert, Toyota’s national manager of the advanced technologies group. “We have to bring consumers along with us or we will fail.”

While environmentalists will continue to seek vehicles they deem “green” (even if they are painted blue), persuading the run-of-the-mill car buyer to buy an eco-friendly car is a significantly harder task. Why? It’s not that Americans just don’t give a rip about the environment; repeated studies actually show Americans at least talk a good game about protecting the environment. But when it comes to spending “extra” money to buy a car that will limit carbon dioxide production and thus (maybe) help in the battle against global climate change, that’s where the waters are largely uncharted. Yes, the Toyota Prius has been a relative hit in the marketplace, but it is the exception among hybrid offerings. And as Toyota readies a plug-in version of the Prius for sale in 2012, company officials frankly admit they don’t know what demand will be.

“We are taking a cautious approach to the market launch in 2012,” said Toyota’s JC Chitwood. “There are a lot of unanswered questions, so the keyword about our demonstration program is education.”

Though Toyota is confident in its plug-in Prius product, it is not nearly as confident that the plug-in version of its popular hybrid can achieve significant incremental sales. Price is a big issue. Toyota execs wouldn’t say what the Prius plug-ins will cost, but there is little doubt that you’ll have to spend thousands of dollars more than the current Prius for one. That could well limit its appeal. And though there is a looming possibility that a percentage of current Prius owners will switch to the plug-in version because it will be pictured as “greener,” it is less likely that legions of others will join them. Toyota might wind up having invested a great deal of money only to sell about the same number of hybrids, in aggregate, as before.

Because of this potential, Toyota has done just about everything it can think of to mitigate the price of the plug-in. One example is in the battery pack: The upcoming Prius plug-in is expected to have a three-part lithium ion battery pack that will offer a limited (under 20-mile) range in electric-only mode, a decision largely determined because of the price of battery power. (The longer the range, the more expensive the battery, thus the more expensive the vehicle.)

It will be fascinating to see if this is the right decision. To confirm it, Toyota will be conducting a 150-vehicle demonstration drive program over the next year or so. Course corrections might result, but Toyota definitely wants to have a plug-in on the market in 2012.