If business is war is Toyota now letting others build a bridge it can later cross while it says BEVs are not ready for prime time?
Not sure, but that it’s gotten itself into some heat is more certain. But is it being punished for what other automakers only might have said behind closed doors?
Early last month Craig Scott, Toyota’s national manager of advanced technologies was largely pilloried by battery electric vehicle advocates for saying “no one” was asking Toyota to build EVs, but this, he says, was absolutely not what he meant.
The ire and backlash on green car websites and chat rooms came at a time when frustrations are high over the maker of the Prius otherwise sidestepping battery electric cars, branching into fuel cells, and drumming up publicity for its Mirai.
The full quote in paragraph three of an October 26 LA Times story that was then aggregated by several other publications, including this one, reads as follows:
Today, Toyota actually favors fuel cells over other zero-emission vehicles, like pure battery electric vehicles,” said Craig Scott, the company’s national manager of advanced technologies. “We would like to be still selling cars when there’s no more gas. And no one is coming to our door asking us to build a new electric car.
A couple weeks ago we caught up with Scott in Los Angeles, and asked what he thought now that his words had been called a “barefaced lie,” other unsavory things besides, and a Change.org petition had been started to formally ask Toyota to build EVs?
The whole thing was blown out of proportion, he said.
“That’s hyperbole, right? And unfortunately hyperbole gets me into some trouble sometimes,” said Scott of his statement that “no one” wants Toyota to build a battery electric car.
Examples of hyperbole might include expressions such as “If I don’t get that new iPhone, I will die.” It’s a manner of speech, understood not to be taken with literal intent.
Was the fact that some chose to interpret Scott’s statement literally merely proof of their own frustration, or did they really think he meant it?
Not sure on that, but to clarify, we asked whether he really meant “no one” wants Toyota to build an EV?
“No,” he said, and that was not the spirit and intent of what he was trying to impart.
“We’ve been very successful at selling the RAV EV, and I think that shows that people are very interested,” said Scott saying his hyperbolic meaning was taken “out of context” after a long interview.
The point he’d thought was understood when he said “no one” was not enough people are coming to Toyota’s door.
“There does not appear to be a large amount of mass market intenders,” said Scott of battery electric cars – and a “mass market” means volume far above what even the most successful battery electric cars now experience. Scott added he never thought he’d be taken at face value over an expression of speech.
“Obviously that’s crazy, that would be a foolish statement – not ‘one’ person – because we sell battery electric vehicles today,” said Scott. “That would be silly to say. That is not true.”
Toyota’s Actual Position
Scott didn’t say so, but allegedly anti-EV Toyota is actually hard at work on batteries in Japan, including solid state types that sources have projected might be available by the next model cycle, or around 2020.
Meanwhile, last year at its Hybrid World Tour in Ypsilanti Mich., Toyota said cars that sell in low volumes – (think Nissan Leaf) – are not enough to make a market it wants to go after at this point.
Last week Nissan’s CEO Carlos Ghosn did say it will more than double the Leaf’s range, but today things are where they are. It’s possible Nissan’s new chemistry would arrive in a 2017 or year later Leaf and a larger battery could enable an Infiniti EV that would compete in ways against Tesla, but true enough, Toyota is sitting it out for now.
And at this stage, Toyota is not without an argument. Last year the U.S. bought 15.5 million passenger vehicles, and the best selling Nissan Leaf accounted for 22,610 units.
Nissan is doing better this year with 27,098 to date, but that’s nothing like the best-selling alternative energy car, the Prius Liftback, which is at 114,000 year to date, and hybrids themselves are yet a niche market.
True enough, Toyota’s FCVs will start at far more humble volumes with maybe 3,200 U.S. sales projected by 2018, but give them a decade, says Toyota. The automaker sees potential to grow beyond with cars it says meets mainstream driver expectations today.
Scott indicated the initial profitability in the sales of hydrogen may also have fatter margins than the now-glutted gasoline market, but ultimately, Toyota is waiting like others to see what a per-kilogram price of H2 will be. Anecdotal estimates range from a future low of $2-3 according to one potential projection by the Department of Energy, to $10 per kg.
The $10 figure may be closer to the mark. At this higher price, a 4-kg fill-up would amount to $40 in a Mirai for 300 miles range – much more than a Leaf costs to go the same distance, however this, like much else, hasn’t been determined.
But while gads of debatable points besides remain, who really would make a convenient scapegoat is in question. Also on board with the fuel cell agenda – or “fool cells” as Tesla CEO Elon Musk has called them – include federal government agencies, government agencies around the world, and California.
At the Mirai press event in Newport Beach last month, it was said California – which awards nine ZEV credits to FCVs but only four to a Model S – proudly sees itself on the cusp of the fuel cell revolution – even if it’s a revolution in slow motion expected to unfold over the next decade and a half.
Last year the state that’s zealous for clean air passed AB 8 allocating $20 million per year to fund up to 100 hydrogen stations through 2023. It wants 20 by the end of 2015 when the Mirai is launched, and 40 by 2016 – so there’s your start of a market.
Eight other states have signed a memorandum of understanding to follow California’s lead, though their degree of readiness and commitment appears to trail behind.
Never Say Never
Toyota has meanwhile not said never to battery electric cars even if some angry BEV supporters have now said never to Toyota for standing on the sidelines. Toyota is abundantly aware of the wrath in some quarters levied its way. Like every automaker, its core motive is to profit. This is its business decision, and now the PR fallout, which goes hand in glove, is what it also aims to heal.
Beginning next year it will be reaching out more on a plan to share its message, it hopes, without upsetting people as much as it did when then vice-chariman, and now Chairman Takeshi Uchiyamada, canceled a small electric city car’s development in Japan.
“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge,” said Uchiyamada in September 2012.
Despite Uchiyamada’s statement, Toyota’s actual position is for now EVs can make sense for shorter range driving – unless you buy a Model S, of course. Within the mainstream sub $35,000 market, at this juncture, it’s sub-100 miles, and its $45,000 after federal and California subsidies FCV makes more sense, it says.
Nor does every “green car” advocate disapprove of fuel cells. Discussions over upstream CO2 – which one DoE rep not against fuel cells said is “easier to manage” – and well-to-wheel analysis have convinced many battery cars do make more sense, but not all agree.
The joke for years has been fuel cells are five years on the horizon and always will be five years on the horizon. Toyota is now launching a car as has Hyundai, Honda will have a new one too, and Toyota projects national proliferation, and this is no compliance car, says Scott.
Work began 22 years ago, he observes, before the Prius, and the company with somewhere over $60 billion in cash sees this as a long-term goal yet playing out.
The automaker is financing a dozen state-of-the-art hydrogen stations in five states in the New England – New York region, some of its brightest young engineers have spent their whole careers on fuel cell development, and it appears to be playing for keeps.
At least that’s what it says. But again, as frustrations flare, one U.S. manager, Craig Scott, did not really mean to say “no one” is asking Toyota to build a battery electric car.
His employer Toyota knows they are. It simply chooses not to, for now.