Toyota takes modest approach to EV rollout

While some global automakers such as Volkswagen Group and General Motors plan to go big on battery-electric vehicles, the world's largest — Toyota — is hedging its bets on a broad array of powertrains, at least in the U.S.

Last week, Toyota Motor North America said two new Japan-built battery-electric vehicles and another plug-in hybrid will be unveiled this year and go on sale in the U.S. next year. The two EVs will be the first in the automaker's U.S. lineup in nearly a decade, but Toyota executives are saying upfront that they won't be for everybody.

Unlike its big competitors, Toyota is not convinced that EVs are the best way to quickly reduce global automotive carbon emissions. Instead, the Japanese automaker believes hybrids and especially plug-in hybrids — in concert with EVs — show the best promise for curbing greenhouse gases because such a portfolio will appeal to a broader range of U.S. consumers.

"The big idea here is that there are different solutions for different conditions for different needs," explained Gill Pratt, a former Massachusetts Institute of Technology professor who is chief scientist at Toyota Motor Corp. and CEO of the Toyota Research Institute.

For example, Pratt explained, for someone who lives in a city where the local power generation is still carbon-intensive and has access only to on-street parking and little access to charging, a standard hybrid offers the greatest opportunity for that person to reduce their CO2 emissions. Another person with a daily commute of 32 miles — the national average — and access to a garage may find a plug-in hybrid offers the best opportunity to green up their transportation, he said.

In fact, Pratt said, because of the large battery packs in today's EVs relative to their average use, the only consumers for whom they make the best sense are those who live where local power generation is primarily from renewable sources.

"If you purchase a [battery-electric] that has substantially more range than average, you end up carrying around a lot of extra battery mass," Pratt said. "In other words, the car weighs more, and you may as well have bricks in the trunk that you're carrying around — and they're actually very expensive bricks, because not only do they cost a lot, but they create greenhouse gases themselves" when they are manufactured.Even hydrogen fuel cell vehicles have a role in lowering emissions, Pratt said, because they would work best as short-haul fleet vehicles where they can be refueled regularly, requiring less added infrastructure. Toyota last year unveiled its second-generation Mirai fuel cell sedan. Meanwhile, Honda Motor Co. and GM are collaborating on fuel cell technology.

Toyota executives didn't give many details about the EVs the automaker will bring to the U.S., or about the added plug-in hybrid. One of the two BEVs will be Toyota branded and one will be a crossover or SUV, said Bob Carter, head of sales for Toyota Motor North America. Both will be imported from Japan, initially.

Dealers have told Automotive News that a battery-electric also is coming to the Lexus brand.

Toyota may seem late to the EV party, but it makes at least 10 different battery-powered autos worldwide.

Carter said the company's "efforts in electrification began more than 50 years ago" with research on electrification of powertrains — which ultimately led to the Prius hybrid, the bestselling alternative powertrain model in history. He said the two new BEVs "will be the first of many" coming to U.S. showrooms.

The automaker last offered an electric model in the U.S. in the middle of the last decade, when it sold a few thousand RAV4 EVs that it made with Tesla.

Toyota's hybrid-centric strategy has paid off so far in terms of sales. Last year, 16 percent of its U.S. sales were hybrids — 337,036 — up 23 percent from the previous year, and Carter said he expects that number to reach 70 percent of the company's total U.S. sales by 2030.

"We're not ignoring the long-term [EV] trend. We agree with the goal," he said. "We are approaching this as a diversified portfolio to let the customer select the right vehicle for them."

When the EVs do arrive, Carter said the cost incurred by most dealers to sell and service them "will be somewhat minimal," though he declined to provide further details.

"The goal is how can we, as an industry, reduce the emissions of greenhouse gases the quickest," Carter said. "One solution may not be the best solution. I want to be the Macy's department store of powertrains, and by doing that, we can continue to reduce the greenhouse gas emissions of our customers."