Electric shock: green Prius fails to pay its way

The Times
December 23, 2008

Leo Lewis: Commentary

Apple has the iPod. Nintendo has the Wii. This year’s must-have item was supposed to have been Toyota’s Prius: the hybrid petrol and electric car bristling with gadgetry and sophistication, and built for a world of $120-a-barrel crude oil.
The early signs were excellent. Before Bear Sterns, Lehman Brothers and the global system of credit had taken their tumble, Americans – particularly Californians – were buying the low-emission, high-efficiency Prius at lightning pace. In May Toyota proudly announced that it had sold its one millionth Prius since the hybrid concept leapt from conceptual drawing boards to real-life traffic jams in 1997.
With Toyota’s hybrid sales charging along nicely at 450,000 for the year, the company’s president was even able to set himself a bullish sales target of one million annually by about 2010.
These figures were not pulled out of the air. As oil prices flew into the stratosphere, and Middle America began to swoon at the price of petrol the mathematics of fuel efficiency started to look compelling, and Toyota was ready with the natty solution and the advertisement campaign with Leonardo DiCaprio.

The great problem with the Prius – and it is the same problem that dogs the development of hydrogen fuel-cell vehicles and other magical-sounding car technologies – is that the companies need to be building and selling an awful lot of them before the cost comes down to the point where anyone and everyone can imagine paying the higher price of going “green”.
Without the credit crunch, the sudden onset of global downturn and the loss of confidence among US consumers, Toyota might have reached that critical point this year.
The company was certainly well prepared for that moment and fondly believed that it was coming. Toyota had designated factories in Mississippi where the Prius would be built by Americans on American soil – a critical shift that would have hastened a descent in the price of the car and very possibly ensured its future dominance of the roads.
It was not to be, at least this year. In its attempt to cut costs, Toyota has scaled back production of many of its vehicle lines, including the Prius, and postponed the new factory investment in Mississippi. Also, even Toyota, which has strived relentlessly to establish its image as an environmentally conscious carmaker, can see that with crude prices back in double digits, the consumers are cheerfully postponing their need to go green.
All eyes will be on the unveiling of the mark III model of the Prius at the Detroit car show next month. Although the new version is rumoured to be larger than previous models, it has been suggested that improved efficiency will mark a drop in fuel consumption. There are also suggestions that Mark III will throw out more carbon dioxide than its predecessors, although with such a heavy emphasis on its green credentials such a development would be surprising to many.