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Study Reveals Mass Market Not Ready for Electric Vehicles

31 May 2000

    TORRANCE, Calif. - In a study presented at today's California Air Resources Board 
workshop on California's electricvehicle (EV) mandate, U.C. Berkeley Professor 
Dr. Kenneth Train found that average consumers would demand that a 
battery-powered EV be approximately $28,000 less expensive than a comparable 
internal-combustion vehicle before they would agree to own and drive it.

    "Since the average retail transaction price of an internal-combustion
Toyota RAV4 is about $21,000, this would mean that in order to meet
California's EV mandate, Toyota would have to give the average consumer a free
RAV4-EV plus a check for approximately $7,000*," said Dr. Train.  "This would
be necessary to offset the shortcomings, such as limited range, that are
characteristic of EVs."

    Conducted by Dr. Train and National Economic Research Associates, an
internationally recognized economic consulting firm, the study also concluded
that the mass market is not ready to accept EVs as general use vehicles.

    Customers place a large negative valuation on EVs for reasons other than
their price, performance, and operating costs.  The negative valuation is
still significantly strong even when consumers are informed about the
potential positive effect of EVs on California air quality.

    "This would make it difficult for Toyota to find 6,400 customers a year
willing to drive battery-powered RAV4-EVs, the number required to fulfill our
annual sales obligation under the mandate which is scheduled to begin in
2003," said Jim Olson, senior vice president, external and regulatory affairs
for Toyota Motor North America.

    "We believe EVs may meet a niche-market need, such as shared-use community
vehicles," continued Olson, "and we are exploring that niche.  But, as this
study shows, there is not sufficient consumer demand to justify the mandate,
and the minimal real-world demand for EVs will assure that they have
negligible effect on the quality of California's air."

    The study, which examined the potential market for electric vehicles and
polled an unusually large sample of more than 1,000 California vehicle owners,
was commissioned by Toyota and General Motors.

    * assuming 100-mile EV range and the same operating cost and performance
as an internal-combustion RAV4.