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"And the Prius is only a preview of Toyota’s ambitious plans for the new hybrid technology. By the end of this year, the automaker plans to sell a luxury sport utility vehicle using the technology—a hybrid Lexus—in the United States. Within a decade, say Toyota executives, the gas-electric combination could be offered in every category of vehicle the automaker sells, from subcompacts to heavy-duty pickup trucks. “When Toyota’s SUVs hit the market, and people see what a really powerful hybrid electric vehicle can do, I think it’s going to rattle a few cages,” says former General Motors chairman Robert Stempel, who chairs Rochester Hills, MI-based technology developer Energy Conversion Devices.
You can be forgiven for thinking that fuel cells, which use hydrogen to produce electricity, were the auto industry’s next new thing. GM and other automakers have for years shown off various versions of fuel cell prototypes that do away entirely with the internal-combustion engine (see “Electricity-Producing Vehicles,” TR December 2002/January 2003). But it will be at least five years—and more like a decade, according to many experts—before a fuel cell car is cheap enough for the mass market. Then there’s the challenge of storing sufficient hydrogen, the lack of hydrogen filling stations, and the problem of producing hydrogen in the first place. In contrast, hybrids are available now, and they fuel up at the local pump. Toyota alone expects to sell 130,000 Prius hybrids in 2004. Throw in the hybrid Lexus slated for export and a handful of Japan-only hybrid models, and the company’s sales of gas-electric vehicles should easily top 150,000—a figure that Toyota says could double by 2006. While that is a small fraction of Toyota’s total sales—which hit nearly 6.8 million in 2003—it is still a big number for an unconventional automotive technology.
Indeed, gas-electric hybrids are the first significant break with carmakers’ total reliance on the internal-combustion engine in nearly a century. And the implications of a widespread switchover to gas-electric hybrids are immense for both consumers and the auto industry. Even bumping up the average gas mileage of U.S. vehicles to a modest 40 miles per gallon by 2012 would mean the United States could trim its oil consumption by three million barrels per day—more than it imports from all the Persian Gulf countries. And though buyers would have to pay more initially for gas-electric hybrids, they could save, on average, $5,000 at the gas pump over the 15-year life of a vehicle.
From a business perspective, if hybrids take off in the marketplace, Toyota will almost certainly emerge as the player to beat, thanks to its hefty investment in the technology over the last decade. “They have seized the high ground,” says Rich Schaum, a former chief engineer at Chrysler. “It’s a long-term strategy which may force the hands of their competitors.” Indeed, as recently as three or four years ago, GM, the world’s largest automaker, was characterizing hybrid cars as a pit stop on the road to fuel cells. But last year GM announced it would have the manufacturing capability to build as many as one million hybrids by 2007, if buyers want them, and that by 2008, it would build three basic hybrid architectures—the platforms for as many as a dozen hybrid car and truck models. Most major automakers plan to bring hybrids to market in the next five years (see “Hybrids Head for Showrooms,” sidebar); still, these other manufacturers are badly trailing Toyota, and some competitors are even turning to Toyota’s technology: GM and Ford Motor are buying key hybrid parts, such as nickel-metal-hydride batteries and sophisticated transmissions, that were developed by Japanese suppliers in partnership with Toyota."
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http://www.technologyreview.com/articles/fairley0404.asp