Toyota’s Super Secret Plan To Rule The World With Hybrid Cars

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Almost four years ago, Tesla announced its Secret Master Plan, Part Deux. Here it is in its entirety:

1. Create a low volume car, which would necessarily be expensive
2. Use that money to develop a medium volume car at a lower price
3. Use that money to create an affordable, high volume car
   And…
4. Provide solar power. No kidding, this has literally been on our website for 10 years.

As plans go, this has been a pretty good one. Right now there’s a better than even chance Tesla could be the sole manufacturer of every car sold in the world within 20 years!

Toyota may be the largest car company on the planet, depending on how you measure such things — most cars sold, highest corporate profits, or number of executive washrooms in its corporate offices — but Toyota seems to be deliberately dismissing the electric car revolution spearhead by Elon Musk and his minions. Instead, it is focusing on hybrid powertrains and hydrogen fuel cells. Are its top executives clueless, delusional, or just plain ignorant?

Last week, Larry Hutchinson, president and CEO of Toyota Canada, gave a speech during the opening ceremonies for this year’s Canadian International Auto Show. That speech was summarized and reprinted by David Booth, who has been an automotive correspondent for Driving, a Canadian website, for the past 20 years.

Hutchinson acknowledges that the world is suffering from an overabundance of carbon emissions (many of them created by the millions upon millions of Toyota vehicles on the road worldwide). He notes that sales of battery electric cars in Canada have collapsed as government incentives have expired. He told his audience:

Here’s the reality: In order to achieve carbon reduction with a costly single technology, you have to incentivize that technology into the marketplace. No matter how motivated the consumer, there is a price point or premium beyond which people will not opt for the cleaner product because the payback is intangible, and it often requires compromises in comfort and convenience.

BEVs are expensive. So, to encourage their adoption, governments have had to offer significant financial incentives to would-be buyers. We’d also need to build expensive infrastructure to support that technology. So, there are enormous up-front capital costs that have to be paid by somebody. And so far, we’ve seen consumers alone are not prepared to pay those costs. The bottom line is this: To have any impact with a zero-emission vehicle mandate, the cost to government would be extremely high. And sadly, we’d still miss our overall carbon reduction targets.

There is a solution to this conundrum, of course, and the solution is the one Toyota has been trumpeting for the past 15 years — hybrid power. Here’s the meat of his remarks.

The average battery capacity in a BEV is about 60 kWh. The average battery capacity in a Toyota hybrid is 1.4 kWh. In practical terms, that means you could build 42 Priuses in place of the 60 kWh battery in one BEV. Forty-two Priuses — each reducing greenhouse gas emissions by 30 per cent — would have the impact of 12 ZEVs. So, the question is this: For the same resources — the same total number of battery cells — do you want the GHG reduction of one car? Or 12? And that’s 12 vehicles without range anxiety, government incentives, or even any infrastructure investment.

Toyota continues to make hybrid powertrains available in more models, including in its Lexus luxury division. It recently introduced the hybrid RAV4 compact SUV, which could certainly surprise quite a few owners with its 219 horsepower and combined fuel economy of 40 miles per gallon. There are precious few other SUVs on the road that squeeze that many miles out of a gallon of gasoline. It even has a 1,750 pound tow rating, something many battery electric cars lack.

“Governments have their environmental goals. So does Toyota. The government has a carbon reduction objective: 30 per cent by 2030. Toyota wants to get there, too. In fact, we want to go further. And we have a solid, practical plan to get there,” Hutchinson says, although careful readers will note the company has sided with the current US administration in its quest to roll back gas mileage standards to the 90s. If that strikes you as Toyota talking out of both sides of its corporate mouth, you’re not wrong. Toyota is promoting an “all of the above” scenario similar to what nuclear, coal, and natural gas advocates propose for the electricity generation industry.

If governments want to speed up the adoption of electrified vehicles, we need a comprehensive, long-term strategy geared toward overall carbon reduction. One that includes a variety of technology options and encourages consumers to make choices that drive meaningful reductions in carbon emissions across the entire fleet of vehicles on Canadian roads, not just a few niche vehicles. And, if we want to move sales of advanced technology vehicles beyond their natural demand curve, there is definitely a role for government incentives but they should be technology neutral. In other words, [governments] should incentivize emissions reduction — not specific technologies.

Done properly, zero emissions vehicles would then naturally enter the market, but would also join a much larger fleet of low and near zero emissions vehicles, each of which is doing its share of the heavy lifting.

Here’s the punchline of Hutchinson’s presentation:

In short, our message to government is this: Set the goal posts, but don’t call the play. Because we automakers know best how to drive down costs and get competitive [low-emissions] vehicles into the market.

If memory serves, the US government did precisely that. It set the goal posts in 2015 and 2016. Then Toyota and several other major car companies cried foul and begged the new government to save them from the very standards they agreed to. Hutchinson’s argument makes some sense, but it is hard to trust anything he or Toyota says.

And here’s something he should consider. Any EV, with its quiet, powerful ride, is far more pleasant to drive than any hybrid vehicle Toyota makes with its gasoline engines cutting in and out incessantly and the roar of its low tech continuously variable transmission filling the passenger cabin whenever the driver whistles down to the engine room for more power. (I owned a Prius for 3 years. I know whereof I speak.) When Toyota makes a hybrid that is as smooth and silent as a battery electric car, then and only then can it truly say it is offering consumers choices that are as good or better than an electric car.