Monday, September 17, 2012

#ENERGY: "Toyota EV On Back Burner"

Toyota has put the electric vehicle (EV) on the back burner, and is even downsizing the size of the battery in its best-selling Prius, opting instead for more conventional gas-saving measures to extend mileage: R. Colin Johnson

Toyota iQ EV will only be produced in pilot quantities in 2013 and may be cancelled altogether in favor of hybrids with even less electric capabilities. Wikipedia.

Here is what Lux Research says about Toyota and EVs: Toyota has triggered electric vehicle alarmism by announcing it will lower sales targets of its iQ EV hatchback to just 100 units of this all-electric vehicle (EV). The news came accompanied by some damning quotes, with Toyota head of vehicle development Takeshi Uchiyamada opining that the "capabilities of electric vehicles do not meet society’s needs." Many have been quick to misinterpret this as a new development – an unexpected vote of no confidence in EVs.

However, the reality is that Toyota has never pursued all-electric vehicles in earnest. While competitors were developing cars like the Nissan Leaf EV and Chevrolet Volt heavy plug-in hybrid (PHEV), Toyota instead opted to focus on more incremental hybrid electric vehicles (HEVs) and development of a light PHEV with a much smaller battery. It worked – the company hit a 2-million-unit home run with its Prius line of hybrids that now includes a light PHEV.

Lux Research predicted this EV disappointment three years ago in the report "Unplugging the Hype Around Electric Vehicles" and has held steady in that view. The reality is that HEVs and light PHEVs are simply far more economical now, given high battery costs, and will remain so for years to come. As a result, in 2020 sales of HEVs and light PHEVs will be 16 times greater than those of heavy PHEVs and EVs.

The announcement also reinforces that the world's largest carmaker’s strategy is a rebuke to the investment by the U.S. and other governments in EVs and subsidies. The political fallout could be severe, especially following flops like Solyndra in other areas. Companies can find strong opportunities in battery advances for light PHEVs and hybrids, as well as micro- and mild hybrids, but should remain cautious about the electric vehicle opportunity.
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