Toyota plans to expand use of gas-electric vehicles

Detroit October 31, 2002; John Lippert writing for Bloomberg reported that Toyota Motor Corp., plans to expand use of gasoline-electric hybrid engines to vehicles ranging from sport-utilities to sports cars to increase fuel efficiency and reduce tailpipe emissions, an executive said.

The gasoline-electric system emits as much as 40 percent less carbon dioxide than traditional internal-combustion engines, said Masatami Takimoto, managing director for engine engineering, in an interview at a Detroit conference. Toyota was the first to sell a hybrid, with the Prius car in 1997.

Automakers want to cut emissions as governments tighten pollution rules, and some rivals such as General Motors Corp. are focusing on fuel cells rather than hybrids. Toyota is the only automaker capable of soon building enough hybrids to overcome the current $3,000-a-vehicle cost disadvantage against traditional cars and trucks, said Fitch Ratings analyst Chris Struve.

"The only way to bring costs down is to increase production," said Struve, who is based in Chicago and studies the effect of new technology and environmental rules on automakers. "If they can pull it off, their fuel economy would be beautiful and they'd never have to worry about emissions."

Hybrid Models

Toyota sold 5.9 million cars and trucks last year, including 36,928 hybrids. The Prius, sold in the U.S., Japan and Europe, combines an internal-combustion engine and an electric motor and gets about 50 miles per gallon of gasoline. Toyota also sells hybrid models of the Crown sedan, Estima minivan and Coaster bus in Japan.

Honda Motor Co. is the only other automaker to sell gasoline-electric models, with the two-seat Insight and a version of the Civic car.

Toyota plans to use much of the technology it's developing for hybrids on fuel-cell vehicles, which the automaker expects will be mass-produced by 2010, Takimoto said. Fuel cells generate electricity in a chemical reaction that combines hydrogen and oxygen, and under ideal conditions emit only water vapor.

"Hybrids are our core technology for the solution of environmental problems," Takimoto said. He didn't say how much the automaker expects to spend to expand its use of hybrids.

Selling to Rivals

Toyota expects to sell 300,000 hybrids annually through its own dealerships by 2007, Takimoto said. That's two years later than the company indicated in previous statements. That number could be doubled or tripled by sales of the technology to other companies, Takimoto said.

Nissan Motor Co., Japan's third-largest automaker, last month said it would buy hybrid-engine parts from Toyota starting in 2006. General Motors, the world's biggest automaker, also has asked about buying Toyota's technology, Takimoto said.

General Motors spokesman Scott Fosgard said the company has had talks with Toyota about buying hybrid engines. No decision has been made, he said.

General Motors Chief Executive Rick Wagoner said in an interview earlier this year that he decided to favor fuel cells in 1999, after his company pulled the plug on its $1 billion investment in the EV-1 electric car. He said he concluded that hybrids, with their gas-electric combination and expensive backup batteries, make more economic sense for Tokyo's stop-and-go driving and $4-a-gallon gasoline than for U.S. driving patterns.

More Hybrids Planned

Toyota expects to announce plans for more hybrid models in January at the North American International Auto Show in Detroit, Jim Press, chief operating officer of the automaker's North American sales unit, said in July.

Hybrids boost fuel economy and reduce emissions by meshing a gasoline engine and an electric motor. When the vehicle is accelerating rapidly, the electric motor supplements the gas engine. When the vehicle is slowing down, the gas engine shuts down and the energy generated during braking recharges the batteries for the electric motor.

The Prius had the best U.S. Environmental Protection Agency fuel-economy rating for 2002-model compact cars, with 52 miles per gallon in city driving and 45 mpg on the highway, the agency said. The Insight was highest among all vehicles, with 57 mpg in city driving and 56 mpg on the highway.