A Rough Week for Hybrids
The week of December 15 started out with grim news for hybrid production, and didn’t get much better.
Toyota Delays US-Prius
On Monday, Toyota announced that it had indefinitely postponed plans to build the Toyota Prius at a new factory currently under construction in Blue Springs, Miss. Just a few months ago, the Prius was on a roll, with gasoline prices topping $4 a gallon. As sales soared, Toyota switched the $1.3 billion Miss. plant’s output to the iconic hybrid from its original product: Highlander sport-utility vehicles. Toyota insisted that the plant will remain dedicated to building Priuses, whenever the project is finally restarted.
Audi Kills Q5 Hybrid
On the same day, Audi announced that its plans for a gas-electric version of the Q5 are also indefinitely on hold. The company had previously flirted with the idea of a Q7 hybrid, but scrubbed those plans. Senior sources at the company said, “Audi won’t produce a petrol-electric hybrid until we can make nickel metal hydride batteries safer in crash situations, and hybrid technology more efficient overall.”
Th!nk Holds on for Life
On Tuesday, electric carmaker Th!nk appealed to the Norwegian government for loan guarantees to weather the current economic crisis. The company’s request was denied.
The government funding could have enabled Th!nk to stay on track for launching the Th!nk City, a zero-emission micro car, in European and US markets in the next year or two. Richard Canny, Th!nk’s chief executive officer, said, “We are in a very serious situation.” One day later, Mr. Canny said that events were “changing quickly” and that government funding remained a possibility.
GM Delays Volt Engine Factory
On the same day, General Motors announced that it will delay construction of a factory in Flint, Mich., where the engine for the Chevrolet Volt plug-in hybrid sedan was to be made. Two days later, Jon Lauckner, vice president of global program management, reassured Volt fans that the project remained on schedule. “It is one of the highest, if not the highest, priority programs in the company and that hasn’t changed, nor has the commitment of resources to fund it,” said Lauckner on GM’s corporate blog. “We have more confidence than ever the Volt will start production as planned in late 2010.”
The Broader Context: Plant Closings and Bailout Money
On Wednesday, Chrysler said that it is closing all 30 of its manufacturing plants for a month starting Friday as it tries to weather the economic downturn. (In October, Chrysler had announced that on December 31 the company is closing the Newark, Del. assembly plant where its only hybrids, the Chrysler Aspen and Dodge Durango, are made.) Ford said it would also extend holiday shutdowns in almost all of its assembly plants, but not the Kansas City facility where the Ford Escape Hybrid is produced.
Finally, after the week of bad news, on Friday, the US federal government came through with $13.4 billion in loans to General Motors and $4.0 billion to Chrysler under terms similar to those Congress considered last week. The funds will be provided by the US Department of the Treasury from the $700 billion TARP (Troubled Asset Relief Program) package.
Under the terms of the package, automakers have three months to put restructuring plans into place, which will include placing a greater emphasis on advanced fuel-efficient cars.