Toyota Faces Hybrid Drought

From the Wall Street Journal...

Toyota Faces New Hybrid Drought
By NORIHIKO SHIROUZU
August 9, 2007 5:54 p.m.

DETROIT -- As safety concerns drive Toyota Motor Corp. to delay the launches of high-mileage hybrids that tap lithium-ion battery technology, the Japanese auto maker will likely face a relatively long drought of new and redesigned hybrids in the U.S. from now through the end of 2010.

According to company executives who spoke on condition of anonymity, Toyota will likely launch only a few gasoline-electric hybrid vehicles during the period. One of the executives said Toyota will introduce just three new and redesigned hybrid models, including the redesigned Prius sedan and the next-generation Lexus RX hybrid crossover, in the U.S. market.

"It's going to be a long drought, and we don't look forward to it at all," the executive said. As a result, he and other knowledgeable executives said, Toyota won't likely be able to meet its goal of selling one million gas-electric hybrids a year globally by early next decade. That goal assumed Toyota to sell about 600,000 hybrids a year in the U.S., up from nearly 200,000 in 2006.

According to the same executives, Toyota's engineering division in Japan is currently scrambling to finalize a medium-term hybrid product plan by the end of this year, and that plan may clarify when the company is able to sell one million hybrids a year globally.

Tomomi Imai, a Toyota spokesman in Tokyo, declined to comment.

The Wall Street Journal reported this week1 that Toyota until recently was planning to launch a dozen new and redesigned hybrids using next-generation lithium-ion battery technology in the U.S. between 2008 and 2010. Its current hybrids use nickel-metal-hydride batteries. But safety concerns with lithium-ion technology, according to the newspaper, forced Toyota to back away from that timetable.

According to the executives, Toyota is delaying those planned launches -- intended as a big hybrid marketing push -- by one to two years. Most of those planned lithium-ion hybrids are now likely to hit the U.S. market in a two-year period starting in 2011, they said.

Lithium-ion batteries Toyota is trying to develop use particles of lithium cobalt oxide. But such batteries have shown a tendency to overheat, catch fire or explode in some cases when they are damaged in an accident or there is a flaw in their manufacturing. Similar problems bedeviled lithium-ion batteries for laptops made by Japan's Sony Corp.

They said Toyota had planned to use lithium-ion batteries starting with the redesigned Prius, originally scheduled for launch in late 2008. But as part of the delays precipitated by safety concerns about lithium-ion technology, the company has decided to not to. The company will instead use the conventional nickel-metal-hydride batteries it has been using in the Prius since its launch in the late 1990s in Japan. The next-generation Prius using conventional batteries is expected to hit U.S. dealer showrooms in early 2009, instead of late 2008.

Aside from the redesigned Prius using conventional hybrid batteries, the executives said, two other hybrids will likely use nickel-metal-hydride batteries even though they originally were planned to tap lithium-ion technology. Both of those hybrids -- the redesigned Lexus RX car-SUV crossover hybrid and a new hybrid-only Lexus model -- are currently due out in 2009.

The next big wave of hybrid launches, as a result, will not come until 2011, when an array of hybrid models using lithium-ion battery technology are expected to hit the market in the U.S. over a two-year period, they said.

The first Toyota hybrid that uses lithium-ion batteries will likely arrive in the U.S. in early 2011 when a derivative of the next-generation Prius, a wagon, comes out.

After the Prius wagon, one knowledgeable Toyota executive said Toyota plans to launch up to nine more new and redesigned hybrids using lithium-ion batteries in the 2011 and 2012 timeframe, although the timing could still change as the company firms up its medium-term hybrid product schedule. The executive said up to nine models are being planned for the U.S., but some models may drop out from the plan.

Among those currently planned are a new wagon-style crossover with three rows of seating based on the Asia-only Wish; a wagon derivative of the Camry; a sporty coupe currently code-named FT-HS, which was shown at the Detroit Auto Show earlier this year as a concept car; and possibly a hybrid version of the redesigned Corolla.

Toyota, according to the knowledgeable executives, is also mulling developing a lithium-ion-battery hybrid version of the RAV4 crossover SUV and the Estima minivan hybrid, currently sold only in Japan, launching them some time in 2012. But those projects are still "very fluid," one of the executives says.