Toyota Drops Electric Car (eQ) Sales Plans

We can afford $7,500 tax credit for plugin but we can't afford any for hybrids?

Come on, I don't buy it. How about distribute it evenly between plugins, hybrids, diesels, fuel cells and NGVs?

 

I just came back from Israel and gasoline over there is about $8 per gallon. I couldn't find an EV from Better Place to rent. I did not see a single EV or a charging station (or battery swapping station) while I was there for 8 days. I asked a resident there and he said EVs are not popular there.

 

lol well that's the theory, but EV and PIP sales are lower here on a percentage basis compared to the US!

One of the common questions on the UK EV forums is why EV's are more popular in the US than here despite you paying a third the cost we do for petrol and your commutes are further. Is it because you're mainly the offspring of immigrants and thus happier to accept or try new things? Who knows.

 

Being sarcastic there.

Hybrids and diesels don't need it. Their cost is already comparable to gasoline ICEs. They are established in the market. More would be better, but a tax credit isn't guarantee that more will buy them than already do.

If increasing fleet fuel economy and reducing carbon emissions is the goal, CAFE requirements have been raised. Manufacturers are going to have offer more fuel efficient models across their line up because of that, and the government doesn't have to bribe people to buy them. And it doesn't favor a single approach.

There are incentives for CNG.
Generous New Federal Incentives Could Put CNG Vehicles on the Map | Hybrid Cars

Same with fuel cells.
Drive Clean
This one expires in 2014, but I'm sure Toyota and Hyundai are lobbying for it, if there isn't more current laws already coming out.

 

where do we draw the line?

giving incentives to 14 mpg pickups just because "hybrid" was in their name was a joke. what about cars that get 40+ mpg that are not hybrids? why are they excluded?

i think the credit should be for plugs only. hybrids were subsidized in the early days to help get them off the ground. they dont need any more help (just like oil companies dont need help but since they bought congress and congress sets the laws...ya well, you know that story) it is good that the credit amount is based on "how much plug" but I helped man the EV Booth last weeekend at the Fair and the #1 thing holding back EV sales is the price. the $7500 fed tax credit should be an instant rebate applied at the time of sale. there is simply waaaay too much confusion and concern over the credit especially among retired people on fixed incomes who dont have that much tax liability.

most are perfectly suited for EVs as they do very few long distance trips anymore

 

Toyota is probably looking to make same % operating margin with PiP as they do with regular Hybrids... they have no incentives to subsidise the cost of PiP.

If they cant make them profitably, they probably wont make them - like eQ plans posted here.

Obviously it is very different from Volt as Toyota sells 1.2m hybrids per year and does not need PiP to sell in large numbers to prove anything or pay off the big investment.

 

from the op article -

There is no reason to assume that toyota has become short sighted when it comes to phevs. They don't need to be profitable this year, they have a longer term strategy. They are investing both in a next generation and a better sales strategy.

The eQ would be dead on arrival in the US. The iq doesn't sell well, and a more expensive electric version totally misses the plug-in market. This is a totally different case.

Really, you think toyota will ignore the phev technology and get a strategic disadvantage to honda, ford, gm, and vw? That doesn't sound like toyota to me.

 

Currently, US hybrids sales are 2% of all new vehicles sold. If we just count the cars (without trucks), perhaps it would be 4%.

In Japan with the hybrid incentives, hybrid cars are near 20%. Imagine the amount of gasoline they are/will be saving? That's a great bang for the buck. Government incentives should pay for itself (by not having to import more oil).

We can do the same in the US but we are not reaching for this low hanging fruit. I am not against the plugin tax credit. I think it is important for plugins to kickstart. We disagree on the plugin credit amount and lack of incentives for the regular hybrids.

Instead, we'll be spending 8x the amount (see calculation below) just on the plugins. Only if some of that funding is directed toward hybrids, we would be saving much more gas.

2005 Hybrid (diesel also qualified) tax credit maximum cost is about $330 millions per manufacturer.

Start - 60,000 x $3,150 = $189 millions
Phase out 1 - 60,000 x $1,575 = $94.5 millions
Phase out 2 - 60,000 x $878 = $47.25 millions

2010 Plugin tax credit (no diesel) maximum cost is $2,625 millions per manufacturer.

Start - 200,000 x $7,500 = $1,500 millions
Phase out 1 - 200,000 x $3,750 = $750 millions
Phase out 2 - 200,000 x 1,875 = $375 millions

 

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The difference in culture is also a major reason for this difference. Fuel prices make them more conscious of fuel use. Being an island nation without its own resources has made the populace aware of waste than us.

Most of the available hybrids were designed to their tastes, and they have a wider selection. The Prius has polarizing looks for the American market, and most of the other cars are on the small side. HSD isn't suitable for the large trucks that are popular here. That is likely true of our minivans also. The HiHy has good mileage, but its numbers aren't as eye catching as the Prius'. Coupled with a high price tag, the low sales aren't surprise.

Our hybrid options will be increasing though. Then pressure from CAFE will also help for lower cost to the government.

 

The Japanese incentive is a little over $3K per prius. It is feared that when the incentives end, car sales in Japan will drop a great deal. It is doubtful that hybrid sales would even double with that incentive in america with different car tastes, but it would be immensely expensive. If they did double it would cost $1.6B/year, with over half the money to import cars. Its likely that toyota would simply raise the price of its cars and a much smaller effect would be realized. This would not be a great bang per buck. There would be quite a backlash since hybrid cars are established. The politics against the prius would get pretty strong if we wrote a check of around $1B/year to import the cars from japan.

Its not low hanging fruit.

You need to understand the economics are to establish the technology. If you limit the same number of hybrids as plug-ins there would be almost no increase in hybrid sales. 200,000 toyota hybrids would be used in the first year. People would just move the purchases forward, then the incentive would end. You would need to keep funding purchases every year to have any impact at all.

They seemed to have under funded the hybrids early - 2004, and aren't making the same mistake with plug ins. You need a better model. If we gave $3K to the first 200,000 toyota hybrid buyers, and over 200,000 would buy toyota hybrids in a year, you won't sell one more toyota hybrid car. The money will just go to toyota and/or the person planning to buy the car anyway. We call that crony capitalism for a reason. A new 200K cap for hybrids will create very little reduction in gasoline consumption.

 

Whatever the culture or the size of the country, 4% is low. It needs to be expanded. I don't know of any other technology that can cut 3,000 gallons with about $3k incentive. We know the hybrid incentive works and Japan has proven it again by replicating it.

The current plugin tax credit wasn't based on its predecessor. There are big loopholes. The structure is totally different and it was written before we understood the effectiveness of the plugins.

Karma $7,500 tax credit is a loophole just like the tax incentive that H2 Hummer got. If GM throws in 16 kWh battery in a 14,000 lbs Hummer and it'll qualify for $7,500.

 

Really? Let's see the math. Bonus if you can compare the gas saving to a PHEV.

 

What makes you think GM could sell a $65,000 plug-in Tahoe(they sold Hummer) even with a $7500 credit? They couldn't sell a $53,000 hybrid one.

Technically, it isn't a loophole for the Karma. Efficiency and emissions weren't a goal of the credit. The H2 was loophole. The law was meant to cover actual work trucks for farmers and businesses, and it was more costly than the Karma's credit.

The Karma is a pure power plug-in, but I wish it wasn't eligible since anyone who could afford $100,000 on a car can afford to pay taxes. Probably at a lower rate than most of us too. The price tag, and their reputation means not many of their cars will benefit from the credit.

The hybrid subsidies might have started in Japan before the effectiveness was known. We've seen the effectiveness of the plug-in kits. With the goal of helping to cover the price of the battery, and likely hood of few models becoming available in the beginning, it appears they decide not to put too many limitations on it.

If your goal is to reduce fuel consumption, why limit incentives to hybrids? Why not any fuel efficient car? That was a complaint about the original hybrid incentives. We can set the mpg limit to exclude any Lexus or other luxury power hybrids.

Then manufacturers will start putting gear ratios into manuals not targeted to boy racers. We'll also start seeing those overseas diesels some have been lusting for. Why don't we just do that? Probably because it is cheaper just to raise the CAFE requirements, and include incentives there to encourage fuel saving technologies that don't help on the EPA test and alternate fuels.

If you are referring to converting the electric generation carbon emissions to theorectical gasoline consumption, that is misleading comparison. The natural gas or coal isn't fungible with imported gasoline.

Well, at least not until we start converting them to gasoline.

 

I love my Plug-in Prius. I wish it had 2x or 3x the battery capacity, but with my commute and busy lifestyle, an all-electric wouldn't work, unless it had a 250 mile freeway range.

 

Sure toyota will sell over 200,000 hybrids this year. The net effect would likely be to bring purchases forward, and then sales would drop when the credit ran out. This is one reason Japan is on their 3 rd round of incentives. The incentive on the prius is also likely a reason the phv has under performed expectations. People are buying prius and aqua instead of prius phvs in japan, since the difference in price looks bigger over there. Since the time period is so short, toyota won't invest one extra dime in making hybrids. If the cap was larger in the past when it was worthwhile they might have built north american manufacturing by now.

What about the other car makers? Fusion, sonata, malibu may steal camry hybrid sales since camry will have the subsidies run out. It may boost the market a little, but it won't be a high percentage of sales. Ford and hyundai are already investing. Honda and GM, I don't think it will help.

Plug in incentives actually have gotten companies to invest in new technology. Much of this reduces the costs of future hybrids. The ford hybrids are a good trickle down effect.

 

What makes you think having $3k incentive won't double that? 400,000 hybrids will save a lot of gas.

It is not like the investment that went into hybrids will not carry forward to the plugins. Give additional $3k incentives to plugins. I think it would've been a better structure as we'll get both the low hanging fruits and the seeds (plugin investment).

 

Huh. If you have a $3K incentive with a cap at 200,000 cars, how would it greatly increase the sales after the cap was reached? We have tried the experiment before. It normally moves sales foward. It may actual reduce sales after the cap as other manufacturers still have the credits, and buyers see that they are getting a worse deal.

The numbers don't work. You need to incentives at least 600,000 cars for toyota to have a measurable impact over multiple years. The bulk of these will be imported. That $1.8B in two years not low hanging fruit. In comparison the volt will get under $200M this year, the prius phv around $30M. The incentives work under multiple years to push the tech forward. They have gotten companies to invest in cars and factories.

The current incentives are not perfect, but they are effective. A 200,000 capped hybrid incentive would just be corporate welfare to import cars.

Getting the worst mileage cars off the road traded for hybrids would cause a great deal of good. Then the $2B to toyota may make sense, but if we simply sell the same people prii it doesn't do much good. Say something like the first 500,000 cars that get less than 25 mpg combined traded for cars that get more than 33 mpg combined get $2K, its $4K if over 38mpg (which happen to be hybrids) . That would save gas.

 

I see what you meant by the "cap". In that case, the cap would be 500,000 for hybrids for the same budget as 200,000 plugins.

Ford has great hybrids and they can sell a lot if we have such hybrid incentive.

The sales don't need to maintain momentum as the gas savings will accumulate for 10 years of the car's life.

 

the problem we have is lack of money (Big Oil says so!) for incentives to save gas, the economy or anything else for that matter. if allowed to pick and choose, there are a few EASY ways to increase plug in sales one of which is change the tax credit to an instant rebate.

i manned the Tacoma Assoc. EV booth at the Puyallup Fair (a real big deal around here!) and talked with people who were interested and by more than a 3 to 1 margin, the initial price was the major sticking point.

problem is most that were interested were retired, they had the money but not the tax liability so most could not fully take advantage of that $7500 savings.

another large segment is people who simply did not understand how the $7500 worked. so lets simplify the process.

it would really only be rewriting what is already there a bit. the proposal to increase the benefit to $10,000 failed (which was not surprising but would have benefited even less of the people that need it) so keep it at 7500 but make it guaranteed instead

 

A lease makes this simpler. The $7500 goes to the leasing company and they prorate it back into the lease for the folks without a tax liability. Works well for students and retirees, as well as non-profits.

If they want to own the vehicle, they can buy it at the end of the lease term, but it would be wise to get the balance of the $7500 tax credit as a cost reduction of the residual.

A lease can also be pre-paid if desired, all the payments made in one lump sum upfront, with the "rent" (interest) removed.