Toyota to Sell Plug-In Hybrids Globally

By Yoshio Takahashi and Kate Linebaugh
Toyota Motor Corp. said Monday it would sell plug-in hybrid cars globally in about two years, as the Japanese auto maker seeks to retain its dominance in the market for cars powered by alternative technologies.
Initially, Toyota expects sales of plug-in hybrids to account only for several tens of thousands of cars a year. Still, "Toyota believes that plug-in hybrids are a realistic solution among vehicles using electricity," Toyota Executive Vice President Takeshi Uchiyamada said at a Tokyo news conference, where the company displayed a plug-in version of its Prius, the top-selling hybrid vehicle globally.

As with today's hybrids, Toyota's plug-in models will be powered by electric motors and a gasoline engine that kicks in to drive the wheels when the batteries run low or more power is needed. But compared to today's hybrids, the batteries will have higher capacity to hold electricity and can be recharged by plugging the car into a standard electrical outlet. That means they can go a longer distance on battery power alone before the gasoline engine starts.
Toyota has said that conventional hybrids are the auto maker's core alternative technology and has set a goal to have that option in all its models by 2020. But Toyota has pushed ahead with plug-in hybrids as its competitors race to release similar models or to build zero-emission, all-electric vehicles.
General Motors Co. plans to begin selling the Chevrolet Volt in 2011. Nissan Motor Co. seeks to roll out an all-electric car next year. Mitsubishi Motors Corp. introduced the world's first mass-market electric model, the i-MiEV, in Japan earlier this year. And Daimler AG aims to start a pilot program for an electric version of its Smart minicar in China next year.
But the cost of such cars may be prohibitive, analysts warn. The U.S. National Research Council in a new report Monday said the current high cost of the lithium-ion batteries used in plug-in hybrids exceeds the fuel savings reaped over a vehicle's lifetime. The NRC estimates it would cost $18,000 more to produce a plug-in hybrid electric vehicle next year than a regular gas-powered car.
"While these costs will come down, a fundamental breakthrough in battery technology, unforeseen at present, would be needed to make plug-ins widely affordable in the near future," the group said.
And many auto makers are reluctant to begin investing in electric-car technology before a recharging infrastructure is in place. Audi of America Inc. President Johan de Nysschen said Monday the U.S. car market won't be able to support plug-in all-electric vehicles on a mass scale for at least 20 years.
He criticized the U.S. government's multibillion-dollar investment in the technology, contending that other technologies could offer more immediate benefits. "I fear right now that government investment is essentially prejudging winning and losing technologies," Mr. de Nysschen said in a speech at the National Press Club.
Toyota's Mr. Uchiyamada said the price of his company's plug-in hybrid hasn't been set. He said he hopes to limit the extra charge for the plug-in to less than 1 million yen, or about $11,000. While that surcharge is about half the cost of the cheapest non-plug-in Prius, he noted that some U.S. customers spend about that amount to have their Priuses turned into plug-in versions.
The third-generation Prius, which had its debut earlier this year, was a hit in Japan, helped by government incentives.
In the U.S., though, Toyota seems to be falling short of its goal. In January, Toyota said it was aiming to sell 160,000 Priuses to Americans this year but it sold only 127,907 in the year's first 11 months.
At the big Detroit auto show next month, the company plans to show a new dedicated hybrid concept car that would be part of the Toyota line. Earlier this year, the company released a hybrid version of its luxury Lexus and it has sold 4,719 of the vehicles so far.
The plug-in version of the Prius which boasts fuel-efficiency of 57 kilometers a liter,can run about 14 miles on a fully charged battery. With the aid of its combustion engine, it can travel up to 870 miles.
Ahead of the mass-market introduction of the plug-in Prius, Toyota said that in the first half of 2010 it will lease about 450 of the cars in Japan, Europe and elsewhere, and will offer about 150 in a free program in the U.S. to gather data to improve the model. he first vehicles were delivered in Japan and Europe, and are coming to the U.S. early next year. —Joshua Mitchell and Norihiko Shirouzu contributed to this article.
Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com