Driving hybrids into the mainstream
By Matthew Rusling
OSAKA - Hybrid technology is gaining acceptance faster than any automotive
invention in recent memory. Far from being the latest short-lived automotive
trend, experts say the hybrid is here to stay.
Toyota is leading the way with its Prius model. Within the next decade, Toyota
aims to sell 1 million hybrids worldwide. By 2010, the Japanese auto giant
plans to provide the option of choosing a hybrid version of any of its cars.
Ford says it will be able to do this for half of its models by the same
deadline.
According to R L Polk & Co, a firm that collects and interprets automotive
data, a total of 83,153 hybrids were sold in the US last
year, with the Prius accounting for 53,761 of them.
Worldwide, the Prius has far surpassed competitors at DaimlerChrysler, Ford,
Honda and Hyundai. It has 64% of the hybrid market, a sizeable lead over the
Honda Civic, its main competitor, which has 31%.
Hybrids seem a natural solution in price-conscious Japan, where heavy traffic
in dense urban environments rapidly depletes gas tanks. By augmenting gas
engines with electric power, hybrids increase fuel economy significantly. And
as gas prices increase, Americans' wariness of spending too much at the pump
has played a part in hybrid sales there. With media attention galore and
celebrity endorsements to boot, hybrids are rapidly gaining popularity in the
US.
"No one thinks hybrids are a fad anymore," said Dan Benjamin of ABI Research.
"The question is, how far will they progress into the mainstream?"
The city of Clearwater in Florida purchased some Prius for its police and
municipal departments and reports that after a year-long test the hybrid got
more than 40 miles to the gallon, compared with 15 for a standard Ford Taurus.
The city estimates it saved more than $8,000 in gasoline costs per vehicle over
75,000 miles of driving.
Toyota wants to see the hybrid move further into the mainstream. Right now a
hybrid costs about $3,500 more than a gas-powered car. Toyota's goal is to cut
that extra cost in half. "If Toyota can cut that to about $1,000 more, they
will have mass-market technology," said Dan Sperling, director of the Institute
of Transportation Studies at the University of California at Davis.
The price of the 2006 models, which go on sale in the US this month, is $22,265
(including destination charge), an increase of 2.1% over this past year.
Competition
While Toyota's Prius is the most recognizable hybrid in the market, it is not
without competition. "Toyota and Honda are now using similar batteries, but we
think that Honda could get away with using cheaper ones because they use a
smaller electric motor than Toyota, [whereas] Toyota uses a complex system that
allows the engine and multiple electric motors to work independently," Benjamin
said. "Honda's system would be cheaper to make but not as powerful as
Toyota's."
Other companies are also trying their hand at developing new hybrid technology,
rather than buying it from Toyota. "Toyota had anticipated licensing technology
but GM and DaimlerChrysler have just put together a consortium to share
development," said Dan Sperling, director of he Institute of Transportation
Studies at the University of California at Davis. "Ford has recently licensed
technology from Toyota but it probably will not continue to do so in the
future." But one of Toyota's key advantages, say experts, is that it has
several more years experience than its competitors, which will give it a
significant lead.
History of the hybrid
While the hybrid concept was thought up around the turn of the century, it was
abandoned in favor of the cheaper internal combustion engine. This remained the
standard until the early 1970s when, jolted by the oil crisis of 1974, the
industrialized world saw a sudden clamoring for more fuel-efficient vehicles.
In 1992, Toyota set goals for increasing development and production of
environmentally friendly cars and, in September 1993, the company began to plan
the development of the Globe 21st Century, or G21. While the original plan was
to produce a car with 50% better fuel economy, the target was eventually raised
to 100%. Over the course of the project it became clear that simply modifying a
gas engine would not be enough, and the hybrid was once again conceptualized.
Toyota invested massive funds - some estimates are in the billions - in a huge
research and development project. Soon, improved batteries and more
sophisticated electronics to coordinate gas and electric power would make
profitability a realistic goal. In 1997, Toyota launched the Prius in Japan
and, three years later, it went on sale in the US.
Experts say government pressure has played a partial role in Toyota's interest
in pursuing hybrid technology. "It was clear that there would be increasing
pressure from government to improve fuel economy," said Sperling, pointing to
influences such as the Kyoto Protocol (which has set targets to reduce
greenhouse gas emissions) and the Partnership for a New Generation of Vehicles
(PNGV), a US government program to increase fuel economy.
"Japan, and the car companies specifically, feel more vulnerable to global oil
supply and climate change than the Detroit companies, who are immersed in the
US's more resource-rich history and experience," Sperling said. "This sense of
vulnerability, together with a corporate culture at Honda, Toyota and even
Nissan that seems more sensitive to societal responsibilities than the Detroit
companies, has resulted in the leading Japanese companies being more willing to
invest in risky environmental technologies, going back to Honda's CVCC engine
in the 1970s."
Looking forward
California recently passed legislation to reduce emissions of greenhouse gases
by 30% beginning in 2009. Automakers are expected to challenge this law, but if
it goes ahead, experts say it could contribute to US sales of hybrids,
especially if the law catches on in other US states.
Local and federal governments in the US are trying to promote fuel efficiency
as well. Boston Councilor Paul J Scapicchio recently proposed that hybrid
drivers be allowed to park at meters across the city for free and get discounts
of up to $10 at city-owned parking garages. And on January 1, 2006, hybrid
purchasers nationwide could be eligible for a tax credit. Japan has instituted
similar policies, granting tax breaks for smaller engines.
Experts say Toyota will be able to take advantage of these trends to reach and
even surpass its goals for the hybrid. "Toyota will maintain its lead in the
foreseeable future as far as market share [in hybrids] is concerned," Benjamin
said.
Matthew Rusling is a freelance writer in Osaka. He can be reached at
mjrjapan@yahoo.com
(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us
for information on
sales, syndication and
republishing .)
