In a brief story on Toyota's plans for future hybrid cars, a company official indicated that the cost of producing hybrids was coming down rapidly, so that by the time sales reach 1 million units per year, they would be as profitable as Toyota's non-hybrids. He went even further, suggesting that by 2020 all of Toyota's cars could be hybrids. That sounds very aggressive, but it's not really surprising. Toyota made a large investment in developing the hybrid technology, and now it's exercising the valuable option that created as their main strategy for dealing with high energy prices and higher fuel economy standards in the US and EU. At 2.5 million vehicles per year and growing, Toyota alone could make hybrids sufficiently mainstream to have a major impact on overall fuel fleet fuel economy and emissions. If this expectation can be met, it sets a very high bar for US carmakers, including Chrysler, which is back on life support.
However you read these sorts of comments, whether as a forecast or as competitive positioning, it suggests a very interesting future for the US car market. Toyota, which could shortly end up as the annual global sales leader, having outsold GM in the first quarter, is staking out its turf as the hybrid car company, built around the Hybrid Synergy Drive technology of the Prius. GM, on the other hand, is trying various hybrid configurations, including the "two-mode hybrid" on which it has partnered with Chrysler, a "mild hybrid" in pickup trucks, and its plug-in hybrid Chevy Volt prototype. Mercedes and VW will be pushing their advanced diesels, and I can't understand why Ford and GM haven't yet introduced their European diesels here. I don't know if these are the technologies that the folks crafting the revamped Corporate Average Fuel Economy Standards are counting on to deliver the 4% per year improvement in gas mileage they envision, but if all these more economical drivetrains together accounted for half the US market, we'd see the fleet mpg numbers start creeping upward again for the first time in many years.
I remember traveling with my colleagues in the late 1990s to present Texaco's corporate scenarios to a variety of company and public audiences. Part of our message on advanced technology vehicles emphasized the degree of consumer choice that was coming, after a hundred years of monopoly of one basic powertrain--a gasoline engine with power transmitted to the drive wheels mechanically. A decade later, we finally seem to be on the threshold of what we envisioned then, with consumers potentially being able to choose the same car with a conventional gasoline engine, diesel, or several levels of hybrid. We wanted to call this vision "Cool Green Wheels", but settled on "Multiple Choice Energy". Both seem apt, now.