Toyota: hybrids reduce CO2, not cost

Toyota has been toying with hybrid-drive vehicles for over 30 years, but has not seen the hybrid-drive vehicle as being a 'cost-accessible' vehicle for the masses.

When the company first began developing hybrids, back in the 1970s, it was intended to provide a means of reducing reliance on fossil fuels, but from the 1980s, the company began to consider the viability of hybrid-drive vehicles as a means of combating an almost unheard of syndrome: global climate change.

"At some stage as early as the 80s, [Toyota was] looking at scientific evidence and saying... 'We don't know whether global warming's right or not, but by the time we decide it is, it'll be too late'..." says Peter Evans, Toyota's Corporate Manager Product Planning.

Evans, engaged in conversation by the Carsales Network at Toyota's recent Environment and Technology conference (more here), freely admitted that hybrids are too expensive for buyers to justify the purchase on the basis of a pure cost-cutting exercise.

"[Hybrids] have never been justified [by Toyota] on saying 'well, this is a car which is aimed to reduce the cost of ownership'... it's never been sold on that.

"We acknowledge that the price premium for a hybrid is significant, so that if you just look at the cost -- at the moment -- the break-even is too far in the future for most people to make any kind of decision [in favour of a hybrid] -- unless you're driven by other motives which are more pure and environmental."

However, Toyota is committed to reducing the price of hybrids, Evans tells us.

"Every generation of hybrids will be more cost-accessible. The question is how long are the other guys going to wait until it becomes an economic argument, as opposed to a social and moral argument..."

But there are signs that hybrids and alternative-fuel vehicles are beginning to have an impact -- in the used car market. And once word-of-mouth and actual demand for used hybrid-drive vehicles starts to drive up resale values, at least one end of the purchasing rationale looks sound.

"What we're seeing now is resale values are improving," says Evans, "for hybrids, LPG, diesels, anything that improves fuel consumption in the used market -- so that helps ameliorate or offset some of the purchase price increases of some of those technologies. And as fuel prices go up that also ameliorates them.

"At some stage of the line, you cross over and -- depending on fuel prices -- it may be sooner rather than later."

Evans believes that the point where hybrid-drive Camrys start to outsell petrol-only models could be within seven years. The petrol/electric mid-size car will go into production at Toyota's Altona plant in 2010 and Evans' estimate could be quite conservative.

"I don't see it being that long -- particularly if we reduce the cost [of the hybrid Camry] -- before it becomes more than 15,000 hybrids and less than 15,000 petrol cars, so you could be looking at 2015... when hybrid Camry becomes the predominant powertrain."

Toyota Australia (TMCA) apparently had to fight hard to win the prize of building the hybrid Camry here, according to Evans and his colleague, Dave Buttner, who is the senior executive director of sales and marketing for the company.

"Hybrid Camry is a very high-precision vehicle -- more so than a normal hybrid," says Evans.

"And we've got a record of being the highest quality Camry plant outside Japan. We're a very dependable production location.

"The election of the Rudd government was one of the tipping points that showed the general public's commitment to the environment.

"We said 'Look, we've got a new government, strongly committed to the environment... signed the Kyoto Agreement. They're pushing through with the Green Car Fund...'

"All those kinds of actions demonstrate to our parent that we were the right customer to be the recipient of the opportunity to build [the hybrid Camry]."

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