Hybrids: A "core technology" at Toyota.

Toyota's position on hybrid technology is simply stated by Irv Miller, group vice president, Corporate Communications: he calls it a "core technology." It is something, he explains that can be based on a number of powertrain types--gasoline, diesel, and even, eventually, fuel cells. (Toyota installed a hydrogen refueling station in Torrance, CA, three years ago, and while the company's hybrid activities have tremendous commercial exposure, with the Prius being arguably the poster child of hybrid vehicles, there is corporate-level research underway on fuel cell development. Apparently there are some practical synergies in this work as while the fuel cell developers are mainly working on the fuel cell stacks, they borrow components, such as the Prius battery, in order to build running cars.) The hybrid powertrain, which Toyota is going to continue to roll out in a number of vehicles, from economy cars like the Prius to the uber-lux Lexus LS 460, is one, Miller admits, that has some additional consumer benefit, in that it helps the customer "make a statement" as regards her or his feelings as regards air quality, global warming, and even national security (i.e., reduced oil purchases).

Dave Hermance, executive engineer, Advanced Technology Vehicles, Toyota Engineering and Manufacturing-North America, defines a "hybrid vehicle" as something that has "two or more energy storage systems, both of which must provide propulsion power." Note that this definition doesn't say anything about fuel efficiency. One of the knocks that Toyota has been receiving is that the Lexus RX 400h is a hybrid crossover SUV that isn't returning the sort of impressive miles per gallon that one might expect because the vehicle is setup for performance (as is the Lexus GS 450h, which is the fastest Lexus vehicle out there). The "hybrid" definition doesn't say anything about it being the Official Powertrain of Thrift. After all, if it was all about being parsimonious as regards fuel, can you imagine using a 292-hp engine and a rear-wheel-drive configuration as is the case with the GS 450h? However, on a comparative basis, Hermance points out that a hybrid does mean reduced fuel consumption (e.g., if you consider other cars that can do a 0 to 60 mph of ~5.2 seconds as the GS 450h can, then he says that the Lexus will save 160 gallons of fuel per year, which means a reduction in C[O.sub.2], as well as 10 fewer trips to the gas station).

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According to Hermance, those critics of the ostensible non-thriftiness of the Lexus hybrids are missing a point. With the point being that while there is undoubtedly a tipping point at some point vis-a-vis gasoline prices, so far U.S. consumers value performance more than fuel efficiency (according to the Toyota information, fuel economy is in the bottom third of issues of concern for car buyers and performance is in the top third). What's more, they'll buy a vehicle that would get a thumb's up from Al Gore if and only if it is equal to or better than one that is not as environmentally friendly (which could explain, in large part, why the Prius is a technological tour-deforce: what other car in any class offered Smart Key keyless entry (i.e., keep the fob in your pocket and as you approach the car, the driver's door is released) as it did when the current generation of the vehicle appeared in the fall of '03?). Perhaps it isn't an entirely bad thing that there are those persons who are holding out on getting their hybrids: Since making the Prius available in the U.S. in '01, the company has sold more than 250,000 of them, and even though they have upped their capacity year after year, demand outpaces supply. (There is a five- to six-day supply of the Prius; just imagine how many vehicle manufacturers would like to have that problem--probably more than five or six of them.)

But there is another knock against hybrids, which is that the "real world" fuel efficiency numbers don't relate very well to those found on the EPA stickers affixed to the window that indicate miles per gallon (MPGs). Hermance acknowledges that high-efficiency vehicles--including hybrids--do, indeed, show a larger fall in MPGs than less-efficient vehicles, but he argues that "the measuring stick is bent and provides misleading information." As he puts it: "Fuel used, not fuel economy, is key." According to Hermance, if fuel usage is used as the metric, then current claims will stand.

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Then there is the concern of cost. This is one area that Toyota undoubtedly has a leg-up on other vehicle manufacturers. Consider, for example, that in addition to having produced three generations of Prius vehicles (with the first, in '97 to 2000, being Japan-market only), they're producing the Highlander HV (since May '05), the Camry Hybrid (May '06), the RX 400h (April '05), the GS 450h (April '06), and have announced the Lexus LS 460h for '07. In other words, they have (1) experience and (2) scale (Toyota has sold more than 275,000 hybrid vehicles in the U.S., and more than 560,000 units globally). (For the Camry, they're going to be producing 4,000 hybrids per month in the Georgetown, KY, plant, so the numbers should rise fairly rapidly.) In addition to which, Toyota Motor Corp. president Katsuaki Watanabe has stated that he wants 50% of the cost of a hybrid system out by early next decade. (The battery is the single most expensive part of a hybrid system, with the power electronics coming in second. Those are the two areas where the biggest leap gains can be made as there is said to be continuous improvement being made in motors and control systems.)

By Gary S. Vasilash, Editor-In-Chief