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September 15, 2009 8:37 AM PDT

Toyota: Electric cars 'too expensive' for mainstream

by Martin LaMonica
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Electric vehicles are the clear favored technology for concept cars at the Frankfurt Motor Show this week. But Toyota, the leader in hybrid cars, thinks that the high cost of the lithium ion batteries will keep electric cars from penetrating the mass market for another decade.

Over the past three years, Toyota secretly tested lithium ion batteries as a potential replacement for the nickel metal hydride batteries now used in the Prius, according to a Bloomberg report

In its tests, Toyota concluded that lithium ion batteries were safe and reliable, but the higher cost doesn't justify a complete shift over for Toyota's hybrids, executives said. As a result, the company will remain with nickel-based batteries for most of its hybrid cars, according to the report.

Toyota will start testing plug-in Priuses that use lithium-ion batteries but is sticking with current nickel-based batteries for most of its hybrids.

(Credit: Toyota)

The lighter weight that lithium ion batteries offer over other battery types has led automakers to that technology for all-electric sedans such as the Nissan Leaf and the Chevy Volt extended-range electric vehicle.

Toyota, too, this week unveiled a plug-in Toyota Prius based on the 2010 model that uses a lithium ion battery. It expects to start leasing them to fleet operators early next year. But when it comes to the "mass market," the company still considers costs and range of battery-electric vehicles a barrier until 2020.

"Electric vehicles of today are less costly than in 1990s, but if you compare them with the other vehicles out there they are still too expensive," Executive Vice President Takeshi Uchiyamada said at a news conference at the Frankfurt show. "Unless there is a very big breakthrough in battery costs I don't think electric vehicles can take a large market share."

Among the many electric-vehicle concepts expected this week are four sedans from Renault, including the Fluence ZE which can work with Better Place's automated battery-switching stations.

Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld. E-mail Martin.
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by bildan2 September 15, 2009 9:22 AM PDT
"Unless there is a very big breakthrough in battery costs I don't think electric vehicles can take a large market share."

I think we knew that.
Reply to this comment
by Renegade Knight September 17, 2009 12:25 PM PDT
There is a very simple solution. Keep in mind a Volt is a hybrid with a larger battery. A Prius is a hybrid with a smaller one. Sell the Volt and other cars as a base model with the Hybrid ablity and give them the option to add batteries. They can add the barries now, or later as needed.
by skillydog September 15, 2009 9:30 AM PDT
And Americans will complain when all our tax dollars were spent on saving GM, only to see it fail again because GM was pressured to pursue immature technologies by the liberal environmental administration... It is a shame GM cannot or will not for whatever reason, make sound business decisions based on scientific and ecomonic evidence like Toyota, as opposed to chasing idyllic liberal dreams fostered in the falsehood of the global warming 'epidemic'.
Reply to this comment
by cerebral_but_dull September 15, 2009 9:46 AM PDT
C'mon. It wasn't liberalism that killed GM -- that's such a stretch that it's silly, considering their Hummers, Escalades, Suburbans, etc. The Volt will be a problem precisely because they were so far behind, and are trying to leapfrog to a new technology with no real experience in hybrid batteries, motor-generators, and the necessary software. The Prius has been around for a long time because Japanese companies are able to plan ahead rather than live quarter to quartrer.
by SiliconValleyJoe September 15, 2009 10:35 AM PDT
@skillydog : Liberal administration? As in building big HUMMERs, selling V8 trucks, making muscle cars, with GM's Wagoner openly showing disdain for the Prius and then laughed off the Highlander Hybrid? And as late as 2007, when the "liberal" administration under Bush was still in place, GM continued to resist any attempt to modernize its offering?

Do you mean THAT "liberal" administration? As in liberally bring oil executives to secret meetings in the WH? As in "liberally" offering incentive to oil and gas production and consumption, that administration?

You conveniently ignored Ford? Ford was the first to come out with a gas-electric hybrid called the Ford Escape. Ford's forward looking strategy made it the ONLY one of the three auto companies that did not seek government bail-out money. Ford is surviving on its own today.

This sort of blind and ignorant attitude is what will kill our industries. The inability to adapt to changing needs and changing reality. The inability to innovate, to compete and to take advantage of change.

Putting on blinders, however pretty they may be, will not change reality.
by Reza_Sadj September 15, 2009 12:40 PM PDT
Skillydog, your tax dollars were on the hook if GM failed, anyway. You'd have to pay for unemployment benefits, federal benefits (welfare, food stamps, grants, etc) to the state of Michigan, Ohio, and the like. The cheaper option for the taxpayer was the bailout, and a quick restructuring. The bond holders got the shaft, as did the dealerships, and the unions got the health care burden and a pile of stock-- which will be worthless if they continue their selfish ways. All in all, I think it was a overreach of federal power during normal times, but was the right move in a financial crisis. The administration you should be criticizing was the previous administration, which started an idiotic war which put a massive risk premium on the price of crude sending it to $150. No company can hedge against that kind of price swing .
I agree with you that the Volt will not rescue GM, and will probably not make money for them. However, do you think Toyota made money on its early Priuses? "Sound business decisions" mean planning for the oil-constrained future. Also, you should understand how much support Toyota gets from the Japanese government in terms of R&D subsidies and, more importantly, a weak Yen policy. You should also consider the tax breaks that the southern states in America give Toyota to attract manufacturing jobs-- states that are net beneficiaries of federal tax dollars. The credit you give to Toyota is only partially deserved because, unlike domestic auto companies, they have the tailwind of Japanese industrial policy, rather than the headwinds from high health-care costs and poor public education that our auto makers face.
You may not believe in climate change, but you should at least understand that it takes more than simply cutting taxes for the wealthy to improve the business climate of America. It's all about global competitiveness. Watch Ford during the next few years and you'll see how it is done right. I can assure you, Alan Mullaly is not "chasing idyllic liberal dreams fostered in the falsehood of the global warming epidemic"?
by C_Graboski September 15, 2009 9:35 AM PDT
The Chevy Volt is not an electric car. Don't be fooled.
Reply to this comment
by BadLikeYaas September 15, 2009 10:00 AM PDT
Please explain
by C_Graboski September 15, 2009 10:24 AM PDT
The Volt is a plug in hybrid. It still uses gasoline which means it still has tail pipe emissions.

Wikipedia: "With fully charged batteries, enough electrical energy will be stored to power the Volt up to 40 miles (64 km). This distance is capable of satisfying the daily commute for 75% of Americans, whose commute is on average 33 miles (53 km). After 40 miles (64 km), a small 4-cylinder gasoline internal combustion engine drives a 53 kW (71 hp) generator effectively extending the Volt's potential range to over 300 miles (483 km) on a single tank of gasoline."

On the other hand, the Nissan LEAF is 100% electric and has ZERO tail pipe emissions.
by iPhoneUser September 15, 2009 10:25 AM PDT
http://consumerguideauto.howstuffworks.com/2011-chevrolet-volt.htm

The Volt isn't a purely electric car, it's an ERV with a generator.

I personally worked in the auto industry in Detroit for the past 4 years. In response to skillydog saying GM cannot make sound business decisions...the problem is, they think they are! The American Auto industry is such a sea of red tape and is full of self-serving workers who are only in it to climb the corporate latter so they can be "awarded" with a bloated salary and golden parachute. I literally watched an executive order more fleets of an SUV 3 years ago that wasn't selling - his theory? Build it and they'll buy it. My company built so many of these huge SUVs that our company literally had to rent parking space at the Detroit airport to store the SUVs no one bought. Oh yeah, this guy's still employed, while thousands of good, hard working people suffered for his idiocy.

Also, when the US is forced to pay Union Laborers more than a teacher would make in an annual salary, you can start to understand why American car companies simply cannot build a smaller, more economical car. Especially when labor forces in other countries work for much cheaper wages. The American auto industry is dead and will not be resuscitated, no matter how much money Obama throws at it with both hands.
by open-mind September 15, 2009 11:41 AM PDT
It's an electric car if you don't put any gas in it.
by liveoilfree September 15, 2009 3:19 PM PDT
Actually, the VOLT-hoax doesn't exist AT ALL. It's just a GM public-relations ploy, and won't be produced in more than tiny quantities, if AT ALL.
GM is a liar; Lutz is a failure at all the things he tried, a three-time loser (chrysler, Exide and GM).
GM has some nerve, pretending to know anything about cars; they are BANKRUPT, that means FAILURES.
by mrcobbynot1 September 15, 2009 9:57 AM PDT
Its so amazing how theses conservative zombies see liberal brains everywhere. The sky is falling chicken little Republicans are just plain wacko. Everything is a political conspiracy caused by a liberal politician. Madison Ave really knows how to conditions a brainless mind with corporate propaganda.
Reply to this comment
by cp256 September 15, 2009 10:09 AM PDT
Bottom line, liberals will lie about anything, cheat anyone and steal from anyone at any time in order to increase their amount of control over the citizenry, pander to their special interest groups and enslave a larger share of the population to the Nanny State. At moment the U.S. is thoroughly in the grip of a tyranny of the "majority," but that's not going to last very long because the true majority is increasingly become aware of they fell for one of the biggest bait and switch scams in history. We will not allow the American Dream to be replaced by the Socialist Nightmare because we are a FREE people.

If we want electric cars we will buy them for ourselves if they are affordable, but we will not pay for YOUR overpriced electric car because some zealot with a messianic complex is good at reading off of a teleprompter.
by trboyden September 15, 2009 11:25 AM PDT
@cp256

What planet do you live on? I think your tinfoil hat is a bit tilted. But thanks for illustrating the wacked out right-wing point by mrcobbynot1.
by Joe Real September 15, 2009 10:29 AM PDT
Good move for the part of Toyota. NiMH is profitable for them, so why change to more expensive horses when it is raking in profits with their current platform? So indeed, it would be too expensive for Toyota to go with Lithium ion.

Unlike GM, Nissan, BYD, Aptera, Tesla, which have a clean slate for retooling, they can select whatever battery technology that makes more sense to them to base their vehicles on considering the unpredictability of oil in the coming days and the mass production of lithium. When the oil starts to get more expensive and the Lithium based batteries are produced en masse, prices of the batteries become cheaper and become more justifiable.

GM Volt provides excellent transition as it will allow the car owner to have a choice to go pure electric or in combo with high mpg flex fuel depending on prices. The pure electric have cornered themselves immediately into electric power source only, while the plug-in hybrids that have an option for pure electric mode and flex fuel will have the widest choices of vehicle fuel sources in the planet. So whatever fuel, be it biomass based, fossil based, or electric from wind, solar, coal, nuclear, are just among the few the choices you can get. And you'll select the one that make more sense to you during the transition when there are mood swings in the prices as both the oil, coal, and electric power plants does their pricing strategies in response to panic driven consumer base.
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by open-mind September 15, 2009 11:31 AM PDT
NiMH is profitable for Toyota? During the quarter which ended last June, Toyota lost $1.5 billion. Toyota also lost an amazing $7.7 billion the quarter before that ... more than any other company. Both facts well ignored.
by Joe Real September 15, 2009 1:28 PM PDT
Today, more than 50,000 people in the world who indicated that they wanted the Chevy-Volt. Average asking price is about $31K. The plug-in vehicles that can go pure electric and with extended range has pent-up demand:

http://gm-volt.com/2009/09/15/gm-voltcom-chevy-volt-want-list-tops-50000-members/
by Joe Real September 15, 2009 1:36 PM PDT
Prius has been in the market for at least 12 years and is one of the profit centers for Toyota. Investing in new manufacturing plant is added as cost while in fact it is an investment.

in 2007, Toyota sold 181,200 Prius's in North America, and 281,300 worldwide, that is close to $6.7 B in sales and will be growing some more as gasoline passes the $4/gallon mark again.
by iPhoneUser September 15, 2009 10:30 AM PDT
And electric cars...please. Our electric grid infrastructure is so pathetic and prone to brown outs I could just imagine what would happen should more than say 1,000 people try to charge their cars at one time. Electric cars are a stop gap to get to the next technology, they will never be as prevalent on the street as gas burning cars. Manufacturers can't build them cheap enough and they don't provide enough of an improvement in EPA mileage to justify buying one.
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by open-mind September 15, 2009 11:38 AM PDT
Most electric cars will charge at night when the grid is relatively idle. Studies have shown that capacity will not be a problem for many years. In the mean time, the grid can be improved. In ten years, batteries should be much cheaper too.
by iPhoneUser September 15, 2009 12:04 PM PDT
Care to site those studies? Here's a quick one I found in <30 sec on google:

http://www.engineersedge.com/technology_news/posts/910.html

There are many factors to consider when improving our electric grid, and we've done nothing to address any of them. There are issues now with trying to do grid tie-ins with wind and solar power installations. Yes, in the first few years, there probably won't be many issues with the grid, but what if gas jumps to $5 or $10 overnight? People clamor to buy electric, the grid isn't ready, and we've got issues. Ten years?? I hope we're still not talking about hybrids and batteries in 10 years or we're in serious trouble. I think that if there was going to be a big profound development in batteries, we'd have seen it by now, or at least a hint of it.
by open-mind September 15, 2009 1:49 PM PDT
Two studies:

http://www.nyiso.com/public/webdocs/newsroom/press_releases/2009/Alternate_Route_NYISO_PHEV_Paper_062909.pdf

http://www.pnl.gov/news/release.asp?id=204
by Drummer16161616 September 15, 2009 7:07 PM PDT
@open-mind, I disagree, most people will come home from work and plug in their cars at peak hours when everyone is at home using all their appliances, lights, consumer electronics, etc. Odds are, most cars will be charged by the time nightfall hits (assuming they have a reasonable recharge time).
by open-mind September 16, 2009 10:52 AM PDT
Folks may plug-in the car when they get home from work, but the on-board computer controls when it actually starts charging. With the Volt, the charge time can easily be configured for the middle of the night when rates are cheaper. From a normal 110V outlet, a full recharge (40 miles worth) should take 6 to 7 hours.

Clearly grid capacity/infrastructure is a long-term concern, and that's why it is being addressed by companies like GM. But it is not a short-term concern, nor is it a show-stopper.
by jabberwolf September 15, 2009 10:52 AM PDT
That's why.... an electric car that only gets 40 miles on 1 charge.. and charges via gas if it goes over this range makes sense.

This is why GM's Volt means so much... because it doesn't require the monstrous battery for an ALL and ONLY electric... and it doesnt require a complete infrastructure change across America!
Reply to this comment
by SactoGuy018 September 15, 2009 10:57 AM PDT
I think one battery technology that bears watching is ultracapacitors, which will soon have very high density storage and very fast recharge times. I think Toyota is looking at the possibility of using ultracapacitor battery packs for the Prius and other models with Hybrid Synergy Drive, and by 2015 we could see a Toyota hybrid vehicle go 80 km (49 miles) on battery power alone before the gasoline engine kicks in to provide battery charging.
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by iLikeMyiPhone September 15, 2009 11:29 AM PDT
This article just convinced me to vie for a Nissan Leaf! I wanted a Prius before but yeah, I want to go the greenest extent possible!
Reply to this comment
by rockodilered September 15, 2009 11:33 AM PDT
If EEStor ever delivers on their promised EESU ultracapacitor then there will be a big breakthrough in battery costs, it will make Li ion and every other battery technology obsolete.
Reply to this comment
by c_l_i_n_t September 15, 2009 12:13 PM PDT
How long can you hold your breath?
by tech_crazy September 15, 2009 12:56 PM PDT
@c_l_i_n_t

Good one!
by USDecliningDollar September 16, 2009 6:45 AM PDT
"If EEStor ever delivers ..."

Hey buddy, I have some magic beans in my pocket, wanna buy some?
by liveoilfree September 15, 2009 3:16 PM PDT
Idiot.
The existing Nickel Metal Hydride batteries are perfectly fine for all-electric no-gas, no-oil EVs, and are still running on pre-chevron-lawsuit NiMH batteries from before Nov., 2002.
Just because Lithium is too expensive, you draw the dumb idea that existing NiMH is too expensive.
No wonder the people realize journalists are liars.
Reply to this comment
by Allannde September 16, 2009 8:06 AM PDT
Come on, no need to get angry.

Toyota made a sensible decision.

I own a Prius with NiNH batteries and have a friend who owns a Porsche which has been converted to EV and uses Lithium-ion batteries.

L-ion batteries are a lot more expensive than NiMH batteries and will need to be replaced 2 or three time in the life of a car. EVs are a developing technology. It is not like there is an alternative. Oil is GOING to run out.

Well actually, there is an alternative. It is the horse and buggy or walking.

Energy spent getting mad is wasted. Besides it is no fun.
Reply to this comment
by namegame96 October 4, 2009 11:33 AM PDT
You guys should watch "Who killed the electric car" It is the arrogant oil corporations keeping battery technology creeping along at a snails pace. Car manufacture's are just their pawns.
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