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Race for First on PHEVs: Toyota Lags; GM Closes In; Honda Drops a Hybrid
Jun 17, 2007 (From the CalCars-News archive)
This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
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Ever since Toyota and GM said they intended to be first on PHEVs, everyone's been asking, "who will win?" Here's the news in that context:

Additional news reports confirm Toyota will slow its development on its next-generation Prius. On top of the Wall Street Journal's June 13 report­calcars-news/­766.html that the next-generation car would not include lithium-ion batteries, now we hear that Prius 4.0, expected in fall 2008, though it never had an announced date, will not arrive until spring 2009 at the earliest. As we said in commenting on the WSJ story, we hope, though it is unlikely, that Toyota will decide to build the next-generation Prius as a PHEV, even with nickel-metal hydride batteries -- still a great way to get PHEVs off the ground! Below we include two reports on the Toyota news.

On Friday, GM announced a massive reassignment of 500 engineers from R&D to production engineering and other areas -- all to speed development of its Volt PHEV. (This car, using GM's E-Flex strategy, is a series hybrid, where only the electric motor powers the wheels. It's modularized so any liquid fuel into an engine or hydrogen for a fuel cell can provide the range extension by recharging the battery.)

First reports indicated that this effort was for the Volt in general, but as the story evolved (the Bloomberg News report below went through three versions), GM's message emerged: its main aim is to bring the fuel cell version of the Volt to market quickly. In recent months, it looked like the realists in GM, proposing to electrify transportation starting with gasoline- or E85-powered PHEVs, were gaining ground. Yet it appears now that GM executives who can overlook the inefficiencies of hydrogen conversion processes and the technical and infrastructure challenges may now be prevailing.

The story includes other important milestones. GM is reported to hope to get 1,000 Volts on the road by 2010, and to sell one million within five years. (This timetable is contradicted by another interview that we excerpt below as well -- perhaps mirroring the conflicting strategies within GM about fuel cells.) This story positions the Volt as the next step after GM's 100-vehicle Project Driveway demonstration program with its Chevy Equinox fuel-cell vehicle. (The company will also move 150 engineers to global product development organization to work on integrating fuel cells into other future vehicles, leaving only 150 in research and development.)

Overall, we welcome this further acceleration of the Volt program, and we expect that another year of reality testing about the comparative feasibility of different range extension fuels will mean that GM will choose solutions using today's technologies rather than returning to what Forbes Magazine described in April 2005 as unwisely betting the company's future on hydrogen fuel cells, in a cover story called "Hydrogen Gas"­forbes/­2005/­0425/­078.html .

The same week that Toyota passed the
million-hybrids-sold (worldwide) milestone, Honda
announced it would no longer produce the Accord
Hybrid -- effectively conceding the mid-sized
passenger hybrid market to Toyota and Nissan.
This was generally taken by some observers as an
setback for hybrid technology.

In fact, Honda's Insight was the first mass-production hybrid, and its Civic has sold well. The Accord's problem was that it was designed and marketed as a "muscle hybrid" -- using the motor to turn a V6 into a V8 -- at a time when most peoples' expectations for hybrids were that they would provide greater efficiency and better MPG. (Honda's 28 city/35 highway was almost the same as its non-hybrid equivalent.) This has been validated by Toyota Winter 2007 survey­html/­hybridsynergyview/­2007/­winter/­question.html where when asked what they wanted in hybrids, 39% of respondents wanted PHEVs; a total of 94% wanted PHEVs/higher fuel economy/alternative fuel hybrids and only 6% wanted "higher power output." (Toyota's mostly-muscle Lexus hybrids have managed to prosper, though some buyers also complain.)

We're often asked why Honda's HEVs can't become PHEVs by after-market converters. Honda's basic hybrid design, called "Integrated Motor Assist," runs the gasoline engine whenever the electric motor runs. This design enabled the Insight to get 60+ MPG, but it means that after-market converters have a far greater challenge. And it means Honda itself would build primarily "blended" hybrids with this design (little or no electric-only driving.) If people had converted Honda hybrids, the company might now be experiencing more of the feedback Toyota gets from its customers. (See­wiki/­Insight_PHEV for experimenters' attempts to improve the Insight.)


Going Green Toyota holds back next Prius while GM amps up Volt engineering By EVAN MCCAUSLAND AND BOB GRITZINGER AutoWeek | Published 06/15/07, 11:52 am et­apps/­pbcs.dll/­article?AID=/­20070615/­FREE/­70615004/­1530/­FREE If you've been waiting for an all-new Prius, get ready to wait an extra six months. According to news reports, Toyota has delayed the launch of the third-generation hybrid to the spring of 2009.

This comes after the announcement in May that early versions of the new Prius will not be equipped with lithium-ion batteries. Toyota and battery supplier Panasonic EV claim issues pertaining to initial cost and thermal safety (read: fire hazard) have yet to be addressed.

Although the Prius launch has no official time frame, the debut is rumored for spring 2008 [reporter appears to have intended to say spring 2009]. Representatives from Toyota refuse to comment on the launch, stating it's impossible to delay a plan which has no set timing.

General Motors, meanwhile, is reportedly quite pleased at the Prius problems because it will likely mean that it can beat Toyota to market with a lithium-ion battery-based vehicle. GM is investing massive resources in development of lithium-ion batteries and the Volt, an electric vehicle that uses lithium-ion batteries charged by either a plug-in source or by an on-board generator or fuel-cell.

GM has set up a design staff with specific orders to focus on Volt design, and this week announced plans to redeploy hundreds of engineers from fuel-cell development work to fuel-cell car production engineering. GM has said it intends to have the Volt ready for production by 2010.

Launch of Next Toyota Prius Stalls­insideline/­do/­News/­articleId=121275 Date posted: 06-15-2007

TOKYO - Quality and safety concerns apparently are delaying the launch of the third-generation Toyota Prius hybrid by six months, to the spring of 2009, according to a report published in the Japanese newspaper Nikkan Kogyo Shimbun on Friday.

The industrial daily said Toyota is stalling the launch to ensure quality after it decided to forgo replacing the nickel-metal-hydride battery used in the hybrid system with a lithium-ion battery for the first version of the new model. Reuters reported that Toyota would not confirm the delay. The automaker typically does not announce the timetable for its vehicle launches, but the popular Prius had been expected to be remodeled by late 2008.

Toyota and battery partner Matsushita Electric Industrial are working on a lithium-ion battery that had been expected to power the next-generation Prius. Those plans reportedly were set back last month due to safety concerns.

On June 7, Toyota said its global cumulative sales of hybrid vehicles topped the 1 million mark, largely on the strength of the Prius.

What this means to you: You apparently won't be able to get your hands on the new Prius until spring 2009, as Toyota works out the bugs.


GM Shifts Engineers to Speed Creation of Electric Car (Update3)­apps/­news?pid=20601087&sid=abR.mR3rTSuQ&refer=home Bloomberg News By Jeff Green Last Updated: June 15, 2007 16:10 EDT

General Motors Corp. is reassigning 500 engineers to speed up the creation of the Chevrolet Volt, an electric car designed to close the automaker's technology gap with Toyota Motor Corp.

The engineers will transfer from research and development to production engineering and other areas aimed at preparing the Volt for sale, said Larry Burns, vice president of R&D at the Detroit automaker. The Volt and its fuel-cell powerplant are moving from ``theory'' to ``reality,'' he said in an interview.

The moves accelerate Chief Executive Officer Rick Wagoner's multibillion-dollar gamble to power more vehicles with unproven technologies that use less gasoline. GM is trying to catch Toyota, which has a decadelong lead in gasoline-electric cars and whose hybrids outsold GM's 100-to-1 in the U.S. last year.

``This would leapfrog the current hybrid technology,'' said Kim Hill, an associate director at the Center for Automotive Research in Ann Arbor, Michigan. ``Right now, you still have to go to a gas station to drive your hybrid. With the Volt, you can avoid that.''

GM's initial goal of selling 1,000 Volts by the end of the decade hinges on developing a reliable, long-lasting battery. If that target is met, the largest U.S. automaker expects to sell 1 million within five years to make the model profitable.

Not Your Father's Hybrid

The Volt differs from a traditional hybrid because it is initially charged at an electric outlet and then uses an onboard engine to recharge the batteries after the primary charge from the outlet is exhausted.

The vehicle would travel 40 miles before tapping the engine, which could be powered by gasoline or diesel fuel or hydrogen fuel cells. Toyota's Prius, the world's best-selling hybrid, uses friction from braking and the gasoline engine to recharge its battery and travels only short distances on battery power alone.

U.S. hybrid sales last year rose 23 percent to 253,652. Toyota, led by its Prius model, accounted for about three of every four hybrids delivered. GM sold 1,788 hybrids -- all of them Saturn sport-utility vehicles.

GM's initiative faces skepticism because the company scrapped an earlier electric-car program and resisted gasoline- electric hybrid technology, said Dan Becker, director of the global warming program at the Sierra Club in Washington.

Follow Through?

``It would be nice of GM to keep its word and actually produce a large number of clean vehicles,'' said Becker, who drives a Prius. ``If they do, people will probably buy them. The question is whether they have the will to follow this through.''

Transferring fuel-cell engineers to the production side of the company means GM can focus all efforts, from all different propulsion types, toward getting the Volt to the market, Burns said.

GM also said today it would shift 100 engineers to its global product development organization to work on integrating fuel cells into other future vehicles. The automaker said 150 scientists and program support staff will remain at GM's research and development center to research hydrogen storage and ``program commercialization.''

The biggest obstacle for the Volt's plug-in technology is building a lithium ion battery that can last at least a decade and have the reliability carmakers expect from current gasoline models, Vice Chairman Bob Lutz and other executives have said.

``We've run the fuel-cell program as a skunk works up until now,'' Burns said. ``Now we need to tap in to the production and marketing expertise of the company to get this developed as quickly as possible. We have our A Team on this.''

An advisory board including Burns, Lutz and other key executives for the Volt is meeting every two weeks, Burns said.

Sign of Progress

Signaling progress on the Volt, Wagoner said last week GM awarded battery-research contracts to Michigan-based Compact Power Inc., a subsidiary of South Korea's LG Chem Ltd. and another to Continental Automotive Systems, a Continental AG unit. Burns said 13 companies bid for the two contracts.

The Volt would be superior to GM's last electric car, the EV-1, because the onboard engine can be tapped for long trips, giving it a maximum range of about 640 miles, Lutz said earlier this year. The EV-1 traveled about 60 miles to 90 miles before it needed to be plugged in and recharged.

GM invested more than $1 billion on the EV-1 a decade ago. It abandoned the technology because of the car's expense and need for frequent recharging. GM has already invested $1 billion on fuel cells and plans to invest another $1 billion.

Demonstration Fleet

GM will build more than 100 Chevy Equinox fuel-cell models starting this year as part of a demonstration fleet of the technology, which converts hydrogen into electricity with only water as a byproduct. In addition, GM is developing a plug-in hybrid-electric version of the Saturn Vue.

Those two models are interim steps before the Volt goes on sale, Burns said. The Sequel prototype, which GM has used to demonstrate fuel-cell technology, will be supplanted by the Volt, he said.

Shares of GM gained $1.09, or 3.2 percent, to $34.69 at 4 p.m. in New York Stock Exchange composite trading. They have climbed 13 percent this year.

GM's 8.375 percent note due July 2033 rose 0.56 cent to 91.56 cents on the dollar, yielding 9.24 percent, according to Trace, the NASD's bond-price reporting service.

To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@...

Somewhat contradicting the Blomberg story, in the Associated Press via the Chicago Sun Times­autos/­news/­430336,srch-auto-AP061507.article, we see different dates:

Hydrogen-powered fuel-cell vehicles could be on the road with regular drivers behind the wheel in a few test areas within five or six years, according to a top General Motors Corp. official. Larry Burns, vice president of research and development, offered the prediction this week as GM announced it has moved 500 fuel cell engineers and scientists from the laboratory side of the company into the chain of command that actually produces cars. Burns said he's not yet willing to say exactly when hydrogen vehicles will be mass produced, but he said it should happen before 2020, the year many experts have predicted.

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