After leading the hybrid car market with its best-selling Prius, Toyota declined, quite publicly, to join the rush into all electric and plug-in electric vehicles.
Now, it would seem the world’s largest automaker is having a change of heart. In an announcement this week, Toyota said it planned to offer “several tens of thousands” of the plug-in version of the Prius, beginning in 2012.
The difference between a plug-in hybrid and a standard hybrid is the plug-in has a larger battery pack capable of propelling the car on its own for a certain distance. In the case of the plug-in Prius, the range is 14.5 miles (23.4 km).
Toyota has made the case that barriers to adoption of electric cars, including range anxiety and the cost and weight of batteries, make wide-spread adoption unlikely. In fact, the company has, or had until recently, put its hopes for the future on hydrogen fuel cells, which have fewer technological barriers, and thus the more logical next-gen power source.
But as Kirk might say to Spock, just because it’s logical doesn’t make it right. With nearly every major car maker, plus dozens of start-ups, entering the EV or plug-in EV space, Toyota must have decided it needed to be there too — even if it secretly believes it’s all a speculative bubble.
Now that it is entering the plug-in market in a serious way, Toyota may actually do fairly well. As one comment on Greentech Media put it:
Even with a $10K battery upgrade added to the $22K base sticker price, a Prius equipped that way is far cheaper than the expected $40K price tag for the Volt. If Toyota’s first production PHEV has a lower-capacity and lower-price battery, it could still cut the ground right out from under GM’s offering by way of a much lower price point with much greater reliability. As battery density and cost improve, Toyota could totally dominate the PHEV market.
EV Makers Will Need Extended Range on their Balance Sheets
Toyota’s seeming flip-flop came, ironically, just days before the release of a study from the National Research Institute which predicts that the mass adoption of plug-in and all-electric vehicles is decades away — seemingly reinforcing Toyota’s initial caution on electric vehicles.
In fact, despite the hype (or excitement, depending on how you look at it) surrounding the Chevy Volt and other EVs, it doesn’t take the National Research Institute to figure out electric cars have a long way to go. For instance, there were more than 7 million cars sold in the US in 2008. Chevy hopes to sell 60,000 Volts when it is introduced at the end of 2010. You do the math.
The question is what might happen with technology and price. The NRI analysis is fairly conservative on both, saying costs will decline only 35 percent by 2020 and even slower thereafter. That assumption also rules out the possibility of breakthroughs in batteries design, such as zinc-air, as well as the prospect that batteries prices could shrink dramatically as more companies make EVs.