Go Green!
Rekha is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Global warming and changing climate seems to be a hot topic. On one hand we find people becoming aware and going for eco-friendly products while on the other we have automakers launching “green cars” to woo such customers. Toyota Motor (NYSE: TM), Nissan Motors, and General Motors Company (NYSE: GM) all had been working on “green offerings” but the market does not seem to be very productive. Toyota said that the company has scrapped the plans for widespread sales of new all-electric mini car.
In 2010 when the company unveiled the eQ as a pure electric variant of its iQ mini car Toyota had plans to sell several thousands of the vehicles per year, but two years later they faced many difficulties and taking more conservative view of the market for battery powered cars, it will now sell only about 100 battery-powered eQ vehicles in US and Japan.
As the company drops plans for widespread sales of electric cars, it cast doubt on the alternative to the combustion engines that were appreciated for its oil-saving potential, but was criticized for its dependence on government subsidies in markets like the US.
Uchiyamada, the pioneer and engineer, also known as “father of Prius” said “The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the car can run or the costs or how it takes a long time to change.” Toyota expects to have 21 hybrid gas-electric models like the Prius in its line-up by 2015. Fourteen of the new hybrids are claimed to be all new.
The company is gearing like other Japanese automakers for expansion after being battered by financial crisis as well as disasters in Japan and Thailand that had disrupted the production. They expect that their reputation for green technology that it built with world’s leading gas-electric hybrid, Prius, will help it a lot to woo the customers and fix its brand battered by the massive recall scandal in the US a few years ago.
In Prius, the gas-electric hybrid, the captures the energy from the brakes and provides supplement to the combustion engine which boosts overall mileage whereas pure electric vehicles like those of Nissan Leaf, have only Lithium-ion batteries. The decline in consumer demands for these vehicles was because of their limited range and high costs of the powerful batteries.
Toyota is left with just single pure EV in its lineup as it made decision to drop plans for extensive rollout of its eQ city cars. An all-electric RAV 4 model which Toyota jointly developed with Tesla Motors will be launched in the US this month.
The company had sold 37,000 Camry sedans in August alone in the US and expects to sell 2,600 of the electric powered sports utility vehicle over next three years. They had planned to sell 35,000 and 40,000 Prius plug-in hybrids in Japan in 2012 but so far it sold only 20% of the target which is far from the plug-in hybrid sales.
The plug-in Prius is so designed that its battery can be charged for 12.4 miles for battery-powered driving. After that the vehicle relies on its gas engine for extended large. The faces challenges in emerging markets where the demand for the autos is in rise but they are still not interested in hybrids and other fancy expensive technologies.
Plug-in cars account for only single-digit percentage of the total global sales over the next decade. Nissan forecasts that by 2020 one-tenth of all the cars sold will be electric. The company has globally sold about 38,000 Leaf electric cars since the vehicles launch at the end of 2010.
Uchiyamada said that the positive reception of the hybrid is possibly due to the deep interest people have shown in reducing emissions and protecting the environment.
In 1997 when Prius first went on sale the annual hybrid sales was tiny but they have grown to more than one million a year worldwide, comprising 10% of Toyota’s global sales. In Japan, the hybrids make up nearly half of Toyota’s sales.
While most automakers geared up with new hybrids and electric vehicles, GM which remains the largest US manufacturer with a projected 18.4 percent market share in September, is canceling all its launches in this genre. Though the 2013 Chevy and GMC trucks and SUVs are making their debut the company is not focusing on developing the hybrid variants of these models. The fact that the company shows no priority to hybrids could be because the models have not been selling as well as the standard gasoline models. Yet GM plans to launch new hybrid SUV by 2014 which will give the company a good time to develop a brand new hybrid variant of popular luxury SUV. GM plans to increase prices of all its models from October 1, in India, to offset the impact of rising input costs and currency fluctuation. The company seems to be focusing on something more important. GM had been bailed out by US government in 2009 and was given aid amounting to $49.5 billion; the government still holds 32 percent of the company's stocks. A deal that had helped the company settle its financial obligation could now cost the company more than $900 million if the lawsuit in progress succeeded. Though GM is not the target of the lawsuit the company would be liable to pay because there aren't enough assets left in Motor Liquidation. The company's shares fell 21 cents to close at $23.18 Thursday on NYSE.
Is it appropriate to scrap out the plans of hybrid cars by the automakers? Rising pollution and deteriorating levels of petroleum reserves on earth need immediate attention. President Obama has set a goal of getting one million electric vehicles on the road by 2015. The analysts, however, think that this may be impossible. But one never knows this might be the start of the “GREEN” age that the scientists have been thinking of for a very long time. You might never know this turned out to be the vehicle of the future which will solve the problems related to not only high fuel prices but may help reducing pollution.
rekhamarwah has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend General Motors Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
