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Hybrid Cars Newsletter: Issue No. 031
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IN THIS ISSUE:
High Hopes for the Next Prius
Rumors about a third-generation, 94-mpg Prius coming out in 2008 have been circulating the Internet. High hopes for hybrid fans came crashing back to earth last month when the Wall Street Journal and a Japanese industrial daily reported that a new Prius would not switch from nickel metal hydride to lithium ion batteries, and that Toyota would not release the vehicle until spring 2009.
Prius Sales Run Continues
In May, Toyota sold a whopping 24,009 Prius gas-electric hybrids, the highest sales level yet for the iconic hybrid. Toby Parks, sales team leader, Toyota of Berkeley, said, “You have the hottest selling vehicle. You have available inventory for that vehicle. You put special pricing on it. They’re going to move."
Honda Drops Accord
The decision to use hybrid technology to offer greater performance, rather than maximum fuel efficiency, came during the early days of the hybrid market. Honda took one on the chin for the entire hybrid market, learning a bitter lesson that hybrid buyers prefer to emphasize fuel efficiency in a gas-electric vehicle.
No Single Approach to Fuel Economy Legislation
A well-designed fuel economy policy ought to include a full complement of instruments to maximize the potential of each. It ought also to include consumer-targeted and manufacturer-targeted mandates and incentives. No single approach is likely to be the entire solution.
Diesel-Hybrid Dreams and Realities
Die-hard hybrid fans would like to see the technology used in all possible varieties. But shouldn’t we be careful about slapping the word “hybrid” and a hyphen in too many places? Not all hybridized technologies pass the three-part test of feasibility, appeal and cost.
The Model G: Google’s Plug-in Hybrid Program
On June 18, the billionaire founders of Google, Sergey Brin and Larry Page, backed out of a parking space in a Toyota Prius converted to run almost exclusively on energy from solar panels. We were there to watch the demonstration of the capabilities of plug-in hybrids, and the two-way flow of electricity between car and electric grid. These technologies could have a profound impact on transportation in the 21st century.
Greetings, Hybrid Car Enthusiasts,
To date, hybrids on American roads have saved 5.5 million barrels of fuel, according to a new study from the Department of Energy’s National Renewable Energy Lab. That’s less than one full day’s worth of fuel over a seven year period. The emergence of hybrids—documented on HybridCars.com and in this newsletter—is one small but necessary step toward reducing the use of petroleum. What else can be done?
We are proud to announce the preview launch of ZipcodeVillage.com, our new project to help Americans drive less by living more locally. As a subscriber to this newsletter, you are among the first few thousand people to learn about and evaluate ZipcodeVillage.com. Big problems like global warming and the loss of community in America cannot be solved by one technology or one website. But we’re hoping that you’ll visit Zipcode Village, make the first post to your "village," tell all your neighbors about it, and let us know what you think. We believe that feedback from our users will move us in the right direction. We’re committed to making Zipcode Village and HybridCars.com great resources for you.
Thanks for your help, and enjoy our latest roundup on the world of hybrid cars.
Auto FutureTech – Summit 2008
March 12 – 14, 2008
Vancouver, British Columbia, Canada
The auto industry is in the midst of a massive technology shift that will profoundly affect energy use, the environment, national security, labor trends, and the financial health of the industry for generations to come. Don’t miss Auto FutureTech 2008, a unique opportunity to gain the perspectives of the industry’s leading decision-makers on the forces that will drive change and determine success in the global automotive sector of tomorrow.
When an unknown musician becomes an overnight sensation with a runaway hit album, expectations for the follow-up release often rise to unrealistic levels. Toyota faces similar anticipation from loyal fans waiting for the next-generation Prius.
The Toyota Prius rose from almost complete obscurity in 2003 to become a mega-superstar in the automotive world. In May 2007, Prius sales reached platinum-record levels—more than 24,000 units in a single month, making it the sixth most popular of all passenger vehicles sold in the United States.
Breathless—yet unsubstantiated—claims about the next Prius began circulating in early 2006. The UK’s Auto Express credited a Toyota engineer as saying that the next Prius would achieve 94 miles per gallon, use lithium ion batteries, and be on the road as early as 2008. The auto and eco-minded bloggers went crazy with excitement, speculating further about the potential for the next Prius to break the 100-mpg mark with plug-in capabilities.
Fantasies about the next Prius took visible shape when Toyota showed off its “Hybrid X” design concept at the Geneva Motor Show in March. It was sleek, groovy and futuristic.
Then, the high hopes of hybrid fans crashed back to earth in May when the Wall Street Journal and a Japanese industrial daily, Nikkan Kogyo Shimbun, reported that the third-generation Prius would not switch from nickel metal hydride to lithium ion batteries and that Toyota would not release the vehicle until spring 2009. According to the newspapers, Toyota had decided to take its time to ensure quality and safety—logical, yet not so dreamy.
Toyota’s reluctance to use lithium batteries in the next Prius may reveal more about the company’s corporate strategy than the state of lithium chemistry or plug-in technology. Why is Toyota holding back on the advanced battery technology for the next Prius?
We can find clues in recent comments from Jim Press, president of Toyota Motor North America. “The approach the company takes is a more conservative decision-making process that tries to avoid wrong decisions and therefore it takes longer to make decisions,” said Press in an April interview in Edmunds’ Auto Observer. “We have a saying that before a Toyota person crosses a bridge, we check every rock.” As alluring as it may be to push the Prius over the 100-mpg mark with lithium batteries and plug-in capabilities, Toyota can afford to be patient, avoid risk, and allow the production levels of its current crop of hybrids to reach economies of scale.
Where does that leave the next Prius when it comes out in 2009? Bill Reinert, national manager of the advanced technologies group at Toyota, predicted a continuation of the previous 30 percent jump in fuel economy from the previous Prius generation. Based on that calculus, the next Prius could boost real-world combined fuel efficiency from the current high-40s to the low 60s—still rock star status among motor vehicles today.
In May, Toyota sold a whopping 24,009 units of the Prius, the highest sales level yet for the iconic gas-electric vehicle. "We had huge Memorial Day blowouts. In three days, we sold 40 Priuses. That’s more than twice as many as usual," said Toby Parks, sales team leader for Toyota of Berkeley, Calif. "You have the hottest-selling vehicle. You have available inventory for that vehicle. You put special pricing on it. They’re going to move." Record-breaking gas prices certainly have an impact, as well.
This level of sales activity removes most remaining questions about the ability for vehicles with gas-electric technology to move into the mainstream. Many industry executives and analysts had assumed that hybrids would not go beyond 2 percent of the new car market until the end of the decade—if ever—and therefore investment in the technology was unwarranted. In May, the 2 percent ceiling, which hybrids have not broken since their introduction almost eight years ago, was surpassed.
See full coverage on our Hybrid Market Dashboard:
Honda is dropping the hybrid version of the Honda Accord. Honda’s decision to place a hybrid system in the V-6 version of the Accord, rather than in a more fuel-efficient, four-cylinder vehicle, was a critical error. That decision—to use hybridization to offer greater performance rather than maximum fuel efficiency—came during the early days of the hybrid market. Honda took one on the chin for the entire hybrid market, learning a bitter lesson that hybrid buyers first want fuel efficiency in a gas-electric vehicle.
The removal of the Accord Hybrid from the market follows Honda’s decision last year to discontinue the Honda Insight, the first hybrid to enter the market. While the Honda Insight was the reigning fuel efficiency king for six years, the two-seat teardrop of a vehicle was not practical for many car buyers. Unlike the Toyota Prius, a runaway hit because it strikes the right balance between practicality, performance and superior fuel efficiency, Honda erred with the Accord Hybrid by falling below hybrid-level fuel economy levels, and with the Insight because of impracticality.
It’s mysterious that Honda decided to discontinue the Accord Hybrid entirely, rather than moving the hybrid powertrain into the four-cylinder Accord. Perhaps the company is starting from scratch with its hybrids, and putting its resources into the new, smaller hybrid-only subcompact expected in 2009. With the release of the yet-to-be-named new Honda hybrid, the company is likely to regain its position as producer of the most fuel-efficient vehicle available in the U.S. market—and will hopefully put the mistakes of the Insight and Accord hybrids in the rear-view mirror.
The Congressional showdown over fuel economy standards is in full swing. Walter McManus of the University of Michigan thinks our political leaders should consider the full suite of tools at their disposal to influence corporate and household decisions about oil consumption and greenhouse gas emissions. Old familiar mandates that demand specific behaviors and have been successful include:
* Fuel economy standards (aimed at manufacturers) and speed limits (aimed at drivers)
* Consumer incentives and disincentives: tax credits for hybrids and taxes for gas guzzlers
These sweet and bitter pills are designed to give consumers a personal financial interest in fuel economy and greenhouse gas emissions reductions beyond what the market alone can provide.
Then there are the carrot and stick approaches:
* Investment tax credits or retiree healthcare subsidies for manufacturers, in exchange for their investments in advanced technology that they otherwise might not make.
A well-designed policy should include a full complement of instruments to maximize the potential of each. Consumer-targeted and manufacturer-targeted mandates and incentives. No single approach is likely to provide the entire solution for two important reasons. First, the problems being addressed—oil dependence and global warming—are large and complex, and must be addressed from multiple directions. Second, the effectiveness of any single policy instrument eventually diminishes over time and further progress needs to come from something else. Best to start with multiple instruments than to discover we don’t have them later.
The differing views of the appropriate CAFE standard seemed to be irreconcilable as recently as 2006, but it now appears that a sustained focus on CAFE in recent months will soon result in legislation. It must include a mandated goal to ensure real oil savings, but should include additional tools to be truly productive.
Follow Walter as he follows the fuel economy debate in Washington:
Die-hard hybrid fans would like to see the technology used in all its many varieties: full hybrids, mild hybrids, micro hybrids, plug-in hybrids, and biofuel hybrids. But we should be careful about slapping the word “hybrid” on too much sheet metal. All hybridizations don’t pass the three-part test of feasibility, appeal and cost. In Europe, where diesels represent half of the car market, the idea of diesel hybrids periodically gets paraded out—mostly at car shows in the form of a concept vehicle—as the latest silver-bullet-du-jour.
The Citroën C-Métisse diesel hybrid was unveiled last year at the 2006 Paris Motor Show. It was obviously nothing more than eye-candy at the auto show, but less exotic diesel-hybrid concepts (see Citroen C4, Peugot 307, Ford Reflex, Ford C-Max minivan, and a Mercedes Benz S class diesel hybrid) continue to be dangled. The vision of a fuel-saving, diesel-hybrid double whammy is too alluring for environmentalists to resist. TreeHugger.com, the excellent environmental blog, claimed that diesel hybrids are “realistic and attainable prospects” and a “happy sight.” It makes sense, right? If hybrids save fuel, and diesel vehicles save fuel, then automakers could theoretically combine the two technologies to produce super-fuel-saving diesel hybrid passenger cars. In fact, the hybrid-diesel combo has been employed in city transit buses, military vehicles, garbage trucks, and delivery trucks for years. How hard could it be to downsize the approach to passenger cars?
It comes down to cost. Back in 2005, Reuters reported, “The main problem is that diesel hybrid cars cost too much to produce—thousands of dollars more than petrol-electric hybrids like Toyota Motor Corp’s Prius.” Six months later, Wired magazine said, “Integrating both hybrid and diesel technology could add up to $8,000 to the price of the vehicle.”
Fast forward to 2007, and the needle has barely moved. Robert Peugeot, vice president for innovation and quality at PSA/Peugeot-Citroën, put the estimate for a marketable diesel hybrid at $5,000—a figure he characterized as "clearly too much." Andrew Fulbrook, powertrain analyst at CSM Worldwide, added, "I can’t see a point in the next five to six years where [diesel] hybrid systems will become a commodity."
Automakers know they have to respond to increased pressure for reduced emissions. This is particularly true in Europe, where diesels are popular but represent a significant environmental challenge. Carmakers and green-leaning car buyers are thirsty for solutions. But let’s get real. There have been—and will continue to be—winners and losers in the hybrid technology race.
When Henry Ford’s neighbors watched the young inventor roll his first gas-powered contraption out of a backyard shed, they had no way of knowing how the rickety four-wheeled carriage would revolutionize human transportation.
More than 100 years later, the billionaire founders of Google, Sergey Brin and Larry Page, backed out of a parking space in a Toyota Prius converted to run almost exclusively on energy from solar panels. This demonstration of the capabilities of plug-in hybrids, and the two-way flow of electricity between car and electric grid, could have a profound impact on transportation in the 21st century.
“Symbolically, this event is very important” said Stephen Schneider, PhD, one of the authors of the recent United Nations report on climate change. Dr. Schneider, a professor of environmental studies at nearby Stanford University, was at Google’s headquarters to observe. “We have to get people to stop thinking big is cool, and start thinking efficiency is cool,” he said.
The Google founders’ two-minute journey was part of the company’s celebration, on June 18, announcing the switching on of the largest solar installation to date on any corporate campus in the United States. Google has installed over 90% of the 9,212 solar panels that comprise the 1,600 kilowatt project. This installation is projected to produce enough electricity for approximately 1,000 California homes. The installation will help the company reduce its environmental footprint and power its new fleet of plug-in cars with clean solar electricity. The dashboard display of the converted Prius driven by Mr. Brin and Mr. Page showed a fuel economy reading of 99.9 miles-per-gallon, the highest number that the Toyota hybrid is capable of showing.
One highlight of the event occurred when Mr. Brin tapped a key on a laptop computer to launch the so-called “vehicle-to-grid” capabilities of the “ReChargeIt” project. With the keystroke, a nearby energy meter paused and then spun backwards, showing the flow of energy out of the plug-in car’s batteries and back into the electric grid. The crowd cheered when the meter, projected on a large flat-screen monitor, reversed directions.
When Mr. Page was asked if his family roots in Detroit had an effect on his support of advanced car technology, he declined to answer. One attendee associated with the project was more forthcoming. “This project tells General Motors and Ford and the American political establishment that it’s time for a change, and we’re not going to wait any longer,” said the gentleman, who asked not to be identified. “If Detroit doesn’t lead, California will.”
Learn more (and watch Google’s video about ReChargeIt.org):
We hope this issue of the Hybrid Cars newsletter provided a clear snapshot of the latest activities in the world of hybrids. Don’t forget to check out ZipcodeVillage.com.
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