Why is the most cost-effective plug-in hated by most plug-in advocates?

It’s simply time to get real about battery-powered potential

In the last couple of days there has been a ton of news about the Facebook IPO. It’s the Internet boom all over again. Others say that Chinese investors helped stoke the fire, as they also did in the few years preceding the mortgage crisis.

Ironically, these themes are also woven into the plug-in revolution that is currently hurting America more than it is helping.

I’m not much of an investor outside of my 401k, and I really don’t know what to make of the Facebook IPO, except that for the last year or so there have been many that have called the IPO process, minimally, scandalous. Insiders, some claim, know how to hype the process to their advantage, and then everyone else gets burned — at least goes the theory.

Oh how Americans seem to love hype, and the plug-in revolution is another sad example.

I remember being in Detroit just before the launch of the Chevy Volt concept. While GM had provided embargoed details regarding the Volt, much was still unknown, and the crew of Who Killed the Electric Car was in attendance to find out if GM really had killed the electric car or not.

Thus, electric cars were a big topic at NAIAS that year. Plug-in advocates at the Detroit show insisted that all GM had to do was sell the EV1 on the open market and the program would have been a success. LOL! I think today’s plug-in sales, built on technologies far superior to the EV1, prove that such an idea was complete BS. Complete fricken BS.

Unlike the EV1, which cost an arm and a leg per car, the Volt would be different claimed then GM Vice-Chairman Bob Lutz. In fact, Lutz originally suggested that the Volt would probably only cost a few thousand more than the car Lutz has hated since day 1, the Toyota Prius.

Suddenly, the Prius and hybrid cars no longer really mattered. And, it wasn’t long before other mainstream automakers jumped into the plug-in game — all the while selling as many gas-guzzlers as possible.

Over time, especially as cost projections started rising, I worried that the Volt and plug-ins were becoming an excuse not to to do more in the near term. I couldn’t help but wonder that since, as Lutz claimed, it would only take a fraction of one year’s marketing budget for GM to build its own Prius, why not just do so? Wouldn’t a non-plug-in Volt be the perfect complement to the Volt? Besides, even GM suggested the idea of a non-plug-in Volt in the early days.

But why? The Prius had just been leap-frogged, at least in terms of hype.

Fast forward some 5 years and Toyota has now sold more than 4 million hybrid cars. For the last few months the Prius family has been Toyota’s second best selling lineup of vehicles in the US, accounting for nearly 20 percent of all Toyota sales. Yet, according to Toyota, the Prius family — and hybrid cars –  is poised for far greater market penetration.

Sadly, with rise of plug-in hype, I have heard many claim that hybrid cars had become passe.  That even Toyota is passe, including its plug-in Prius. Unfortunately, numerous studies have continued to suggest otherwise.

The latest is a Canadian study that finds from well-to-wheel, when driving conditions are fully accounted into the equation, hybrid cars are pretty much on par with plug-in hybrids and range extended electric vehicles in terms of overall energy use and CO2 emissions. In fact, non-plug-in hybrids might even be better. Even more troublesome, they are far cheaper, particularly upfront. And cheaper means more sales and greater impact.

But what does the real world matter?

Pathetically, at least in my opinion, this type of data has now been around for several years. For instance, in recent years studies from Carnegie Melon and Oxford University, to name just a few,  have suggested the same.

But America had to leapfrog an idea like the Prius, and we had to beat the Chinese.

Deja vu?

The Chinese helping to stoke another American hype-powered bubble that benefits the rich at the expense of the poor?

Maybe that’s going too far, but it’s hard to understand just how plug-ins are really helping America. Massive subsidies are being pumped into this space to rush into a technology that many experts claim simply isn’t ready for primetime, at least not based upon the demands and expectations of mainstream consumers. So just what are we rushing towards? Hype? For example, recently the head of advanced products at Mercedes echoed what many mainstream auto execs — easily the majority –  have been claiming for years. There is NO major battery breakthough coming within the next decade.

DECADE!

Then shouldn’t we being do more in the interim? And again, at least in my opinion, that’s just what mainstream automakers have been using plug-ins to avoid, just as they did with fuel cell vehicles. It’s a sad pattern. Doing as little as possible today, while pretending that the future is just around the corner.

I mean, why can’t lithium hybrids, for example, be a good step towards such a breakthrough? You can make far more hybrids with the same amount of resources and you can make them far cheaper — while basically achieving the same savings in energy and even greater emission’s reductions compared to plug-in hybrids.

Achieve more for less? Is that really so anti-American? Why do we let hype supersede logic? It has the right political resonation?

As I’ve argued before, hybrid cars are a great way to introduce consumers to electrification. That occasional burst of EV silence is powerful, and it makes many consumers want more of it. That’s a good start. A great opening to the full benefits of pure electrification. More noteworthy, if there was a small incentive for such vehicles — much smaller than for plug-ins — cars like the Prius would become Toyota’s top-selling vehicles.

That offers real impact today.

And imagine if GM had used a fraction of one year’s marketing budget to build their own Prius, even before Toyota, according to Lutz. Would that mean 8 million hybrid sales to date between the two? Spread that across the entire mainstream auto industry and things look very different today than they do currently, in terms of fuel efficient offerings, at least I believe.

But competition is bad. Instead, regulation is the answer to everything. Please.

Instead, it might still be a decade, probably more, before the Volt and the Nissan Leaf truly find their groove. And, even then according to many studies, conventional hybrids might still dominate sales for some time for numerous reasons, such as limited recharging capabilities, etc.

Like Facebook and the Internet Bubble, plug-in hype is only good for a handful of rich people. While plug-ins will have their time and will leapfrog ICE-based hybrids eventually, it’s going to take time, significant time unfortunately. Hype simply isn’t going to change that reality, just as it didn’t for the Internet bubble, nor for Facebook. It’ll only keep America dependent upon foreign oil longer while leading to even greater CO2 emissions.

At the end of the day, it’s time for plug-ins to stop being an excuse for not doing more today. Likewise, it’s time for the government to stop enabling automakers to continue to be so complacent. With the proper incentives, we could achieve 2025 CAFE requirements many years earlier, in a way that mainstream consumers will embrace and that will be good for the country. Plus, accepting this hybrid opportunity creates a much better foundation for plug-in electrification to build upon.

The rest is just hype and BS. But that’s what sells in America these days. Enjoy the smell.

The best compact utility vehicle?

Particularly in terms of Ford’s overall hybrid effort

The upcoming Ford C-Max hybrid is easily Ford’s best hybrid offering, and I believe, one of the best overall new vehicles coming on the market. Akin to the Toyota Prius V, the C-Max utility hybrid promises a better and more powerful driving experience, better fuel economy and a lower price compared to V. Perfect, right? Yes.

But the V isn’t driving Toyota’s stellar hybrid sales, the conventional Prius still is, and the conventional Prius — or at least the Prius family — is the metric, the benchmark, the standard. Thus, this ‘we’re better than Toyota’ angle, unfortunately, feels a little contrived and begs a few questions.

For instance, if Ford’s new lithium-powered hybrid powertrain, set to power the C-Max is so much more cost-effective than Toyota’s, why isn’t Ford taking on the entire Prius family, or at least the Prius that offers the most sales? Consequently, is Ford subsidizing the costs of the C-Max a bit to ensure some advertising buzz? Because, ultimately, Ford’s hybrid goals — at least for now — appear to be more about buzz than sales.

Regardless, the C-Max is an impressive offering, and at $500 less than the Prius V, the C-Max is a great buy. Aside from superior fuel economy and horsepower compared to the V, the C-Max also offers more interior volume, and lots of hot Ford technologies, such as SYNC® with MyFord Touch®, SmartGauge® with EcoGuide, and a cool new hands-free liftgate. By every measure the C-Max isn’t just a great offering compared to the Prius V, but compared to all vehicles in the compact utility segment.

Ultimately, Ford’s hybrid goals might be too conservative and perhaps even a contrived effort to create a halo product, at the expense of profits, but that’s not an issue for C-Max buyers. Instead, C-Max buyers should focus on the fact that this is a great product at a great price. If you are in the market for a crossover or small SUV, the C-Max could be a ride above the competition.

Un oh. My wife's new passion.

And she doesn’t give one crap about plug-in technologies

I can still remember the debut of the original Chevy Volt concept. The long front end, like the Camaro and the Corvette. I had mixed feelings about that design, but in terms of a concept that form worked well I think. It drove the right kind of buzz. Nevertheless, it was the powertrain that I was focused upon. The design was largely irrelevant.

That sporty Volt design; however, meant a lot to many early fans of the Volt, and when GM reshaped the Volt to its current self after wind tunnel testing proved a real drag, many howled. For me, it was still all about the powertrain.

In hindsight though, I think the current Volt is exactly right, because my wife just fell in love with the Chevy Volt.

My wife isn’t much of a car person, nor does she really care about foreign oil dependence. She likes cars for one reason. Looks.

For Mother’s Day I tried talking my wife into dinner at one of our normal Old Town Pasadena favorites. Since I try to drive as little as possible, Old Town works well because it’s only a few stops away on the Metro Goldline, my preferred mode of transportation. But my wife wasn’t going for it. So I offered up Little Tokyo or downtown — both only a few more stops in the opposite direction.

Still, no. She wanted to go somewhere we rarely go. Somewhere different. Somewhere the train doesn’t go, at least not yet. So we ended up in Santa Monica.

Since it was Mother’s Day, I drove both ways. Now my wife believes she’s in the market for a new car — she’s not. Thus, whenever she sees a car she really likes, she points it out. “I think that’s the car I want.” Thus, it wasn’t surprising when we were driving down the 10 towards Santa Monica and she pointed out a car she liked. However, I was surprised when that car turned out to be the Nissan Leaf.

Of course, my wife is interested in a small car. Parking is a nightmare where she works, so a small car would make the job easier and provide more options. Nevertheless, since my wife doesn’t like the styling of the Toyota Prius all that much, I was a little surprised that she was impressed with the looks of the Leaf.

But what really shocked me was when she came home last night. “I know which car I want,” she said.”A Chevy Volt was parked next me. What a great looking car. Isn’t that the plug-in car you always talk about?”

For about 5 years now I’ve been telling her about the Volt, even going to Detroit a few times to follow the development of the Volt from concept to reality. I don’t know if she ever heard a word I said — and it hasn’t always been a good story. None of it would have mattered anyway. All it took was one look, a full visual inspection, and my wife fell in love with the Chevy Volt.

In terms of visual appeal, I have to conclude that both Nissan and GM did good. My wife’s stamp of approval is fashion gold in my opinion.

Unfortunately, I can see it now. If we trade our hybrid in for a plug-in, she’ll soon start telling me, maybe we could drive a little more and not have to take the subway everywhere since we’ll be using electricity rather than gas. If only GM had left the Volt looking more like a Camaro — my wife hates sport’s cars — I might have converted her into full subway submission. Now she has new tools to work me over. Ohhh, the irony.

If you're rich and green, the Tesla Model S is THE statement car, by far

It’s crunch time for this EV maker

Last quarter Tesla lost $89 million dollars. The quarter before, $48.9 million. But Tesla CEO Elon Musk isn’t worried, as long as Tesla can perfectly deliver 5000 Model S’s this year and head into 2013 with the ability to produce 20,000 S’s every year — and sell most of them — the company will soon be profitable.

And, while the financial loses and the lofty sale’s projections have many believing that Tesla is now climbing a very slippery slope, I believe Tesla has a legitimate shot for success, and here’s why.

In a nutshell, it’s really pretty simple. Great design and almost 300 miles of range. The Tesla Model S is the ultimate green stamp. The foreign-oil crusader’s bat mobile.

Sure a Nissan Leaf is a nice plug-in electric car, but this is a gorgeous car with 3 times as much electric range. If you buy the top end Model S there is no range anxiety. People that can afford to drop $100,000 on a car don’t ever drive more than hundred miles in a day, at least not much more. OK. Maybe you drive from LA to Vegas to show off your ride every now and again. With the Model S you can make that trip without using 1 drop of gasoline, or stopping for a night to recharge. No other car comes close to that capability. The S stands well above the crowd.

Compared to the Fisker Karma, the Model S is just far superior. Yes, Fisker also has great design, but their technology is, possibly, questionable. Moreover, the Karma is still a gas-guzzler, at least potentially. The Model S is pure electric. The S is the best, by far. That will mean something to those with money and discerning tastes. For the money, the Model S is superior by every technological measure.

Ultimately, if you’re a 1 percenter — and there’s a lot of them throughout the world — that wants green or energy independent credentials, then the very best car you can buy — and that I’m sure that you’ll also love to drive — is the top of line Model S. Anything else is a distant second place today, DISTANT. The Tesla Model S is THE car.

You have to give it to Musk. Until plug-in prices decline rather significantly, there is only one potentially profitable niche in the plug-in car space and that’s luxury, particularly high end luxury. And Musk has put together the perfect package for this space. That doesn’t guarantee success, but if there is success to be found in the start-up electric car space today, Musk has nailed it.

Still, he needs to read my earlier article Any Smart automaker should have an electric bike. Throwing in a free electric bike for the rich dude’s kid could help create a whole new plug-in niche for Tesla that might help Musk take plug-ins to the mainstream much sooner.

If you ask me, I think the Model S is primed to live up to its original code name: White Star, as the Model S is set to become the big bright star in the plug-in space.

Smart's two-wheeled plug-in aresenal

Could be a good way to train the kids to love electrification

The other day I facetiously called the plug-in revolution dead. I should have restricted that death mask to cars and other four wheeled vehicles. China alone proves that the plug-in revolution is alive and well, but only on two wheels. And automakers are noticing.

Consequently, Smart will add a new electric scooter to their electric two-wheeled vehicle portfolio that already includes an electric bike.

Believe me, I know, in America we mock this stuff. But the kids might not.

Moreover, there are tantalizing opportunities. Here in LA, where I’m a regular Metro Goldline user, bicycle rentals could be the next big thing as bike sharing moves to the city of devilish angels. While bikes are cool, an electric bike and/or an electric scooter, might even in resonate in “nobody walks in LA.” Even lazy people can be bike-cool.

If your office and/or home is just a few miles from the train station, such vehicles might be the perfect connections.  For many, for instance, taking the subway is cool, but the bus? Not so much. Now if you want to hit a hot spot a few miles from the closest subway station, you might be able to rent an electric scooter for a few bucks to complete the journey.

Unfortunately, ebike makers like Smart aren’t trying to drive such a vision forward just yet. Instead, their focus is on drivers that don’t yet have a driver’s license. While I believe that is only scratching the surface of two-wheeled electrification potential, even here in America, it is still a good way to indoctrinate the kids to the virtues of electrification.

Electrification is on a snail’s pace right now. Eventually, like the tortoise it will win, but it’s going to take significant time. In order to pick up the pace, real out-of-the-box change will be required and electric bikes and scooters could be a smart way to help change personal mobility psychology.

Source: Insideline

The king of cheap rides?

Can a hybrid or plug-in ever be the most cost-effective new car buy?

In this sluggish economy, many new car buyers want to spend less on a new ride, plus they want to save money on their monthly fuel bill. Obviously, saving money on a fuel bill makes you think of hybrid and electric cars. Of course, MSRP and total costs of ownership are also part of this equation.

Thus, when it comes to the cheapest rides — the total cost of ownership after 5 years — can hybrid and plug-in cars compete?

To start with I’m going to use data provided by Forbes regarding the cheapest cars to own considering total cost of ownership after 5 years. In terms of all cars, the Nissan Versa is the cheapest car. After 5 years, the Versa’s total cost of ownership is $25,868, or $.34 cents per mile to own. The cheapest hybrid or plug-in, on the other hand is the Honda Insight, at a total cost of $30,659, or $.41 cents per mile.

So, did hybrid cars and plug-ins just get crushed?

To start with, a base Honda Insight offers more standard equipment than a base Versa, plus the base Versa is a manual. To upgrade to an automatic transmission, you have to add $2100. The next level Versa costs around $4,000 more than the base model and includes a manual transmission and some of the extra features the Insight offers compared to the base, but it also offers more upgrades than the Insight. So, after 5 years, the Insight can’t compete with the cheapest conventional car. All things considered, I’m going to give the Versa a $1,000 advantage. But just to be generous, let’s say its $2000 (Assuming automatic transmission. If you want a manual, hybrids and plug-ins can’t compete.).

As a result, after 10 years the Insight wins. Saving an extra $500 in fuel per year provides the Insight with another $2500 in fuel savings after another 5 years. Thus, if you think long term, a hybrid purchase is a very cost-effective purchase. Nevertheless, it’s a lot easier for most ‘cheap’ buyers to spend less upfront.

And that has me thinking about a hybrid like the Toyota Prius c. The c hybrid costs a bit over $1,000 more than the Insight, which is probably why the Insight still wins after 5 years. But the c’s better fuel economy has to make the numbers pretty close. Over time, however, the fuel economy of the Prius c would enable the C to offer an even greater long term value compared to the Insight, especially for urban drivers. And if gasoline prices rise above $4.00 per gallon, all the better.

Of course, even if the Prius c can offer a $1,000 cost-effective advantage compared to the Versa after 10 years, I doubt most drivers are going to fork out several thousand extra up front to save even a $1000 after 10 years.

What about plug-ins?

Take the base MSRP — after the federal tax credit — of the Mitsubishi i, the cheapest plug-in, add state fees and taxes, insurance and financing and the Versa already holds a significant advantage in terms of 5 year costs. In fact, those costs alone push the i to about the same cost per mile of the Insight. Thus, repairs, maintenance, and fueling would have to be almost $0 for the i to be cheaper to own than the Insight after 5 years. After 10 years; however, the i could overtake both the Insight and the c in terms of total cost of ownership, thanks to its cheaper fueling costs.

Of course, the i doesn’t just require an even bigger upfront payment compared to the Versa to save money long term, but it also requires buyers to give up a significant amount of range. An even bigger obstacle for car buyers to overcome.

Also on the plus side, none of this cost-effectiveness takes into consideration depreciation. Long term there might be a point where total cost of ownership is equal, however, both the Insight and the i could be worth more. That’s often the case with old Prius hybrids. That’s cash in pocket on a trade-in.

When it comes to the cheapest rides, if 5 years is the metric, hybrids and plug-ins can’t compete just yet, but over the life of these vehicles, hybrids and plug-ins might actually be the best overall deals if you drive 15,000 miles per year and gas is in the high $3.00’s. Unfortunately, the need for long term thinking, tax incentives and limited range are a set of variables that most consumers simply can’t overcome. Regardless, when you think about total cost-ownership based on the average lifespan of a vehicle, hybrids and plug-ins can compete.

Source: Forbes

Another plug-in related fire is bad news for the plug-in revolution.

OK. It’s not dead, but the plug-in revolution is on life support

I have one metric in life when it comes to transportation. OK. It’s one metric, but it’s split into two parts. The basic metric — the main part — is simply US foreign oil independence, but the critical first part is OPEC independence, ASAP. If biodiesel can make that happen, I’m in. Batteries, I’m in. Natural gas, etc., I’m in. Ultimately, I don’t care which technology makes it happen, only that it happen.

However, one thing is clear. If ending OPEC dependence is dependent upon plug-ins, oil companies can bank on some huge profits over the next few decades because the plug-in revolution is barely alive. And the recent Fisker Karma fire is about to cause even further asphyxiation.

Before I go any further; however, let me make one thing clear: Electrification is the future of the automobile, and electrification already makes far more sense than most believe, today. The problem is, consumers don’t make sense. We never have, and we probably never will. In a nutshell, American consumerism is self-destructive. It has been for decades. And it might continue to be forever.

Honestly, small electric cars make a ton of sense if all factors were honestly considered. But, today, the same small cars that would make electric cars viable would also wipe out OPEC– as well as huge chunks of overall foreign oil dependence — if the norm today using only ICE at a far cheaper cost than electric ones, at least upfront.

Again, it’s not that electric cars don’t make sense. It’s consumers that don’t make sense, and decades of senselessness simply aren’t overturned overnight.

Did a Fisker Karma plug-in cause a house fire?

No one cares. The association is all that matters, especially before an audience that is already extremely skeptical of plug-ins, that is already mostly nonsensical.

The plug-in revolution isn’t dead, but for all intents and purposes — if foreign oil dependence is your metric — plug-ins are dead. Outside of personal foreign oil independence, plug-ins have little to offer. After more than a decade on the market, even hybrid cars have proven very little, but hybrids are getting close — after more than a decade on the market, and plug-ins will follow the same long term trajectory. Still, it’s going to take more than hybrids and plug-ins.

At some point, it must be asked, what is the point of hybrid cars and plug-in vehicles? What are the goals? Then make the goals the priority, not the path — the technologies — to achieving those goals.

Sadly, in my opinion, an overt plug-in strategy is simply code for status quo. The real fight is about changing, challenging the consumer — the voter — to think bigger. It’s more about psychology than technology, followed up with cheap-up-front solutions. Without such a zeitgeist, hybrids and plug-ins won’t really change anything for decades. That’s simply a fact.

A focus on the battery is better than nothing, but isn’t it time to ask, can’t we do better? Unfortunately, those in power for the last several decades, regardless of party, seem to think not. It’s all about a perfect solution, a cake-eater solution. Yet, how often in life are things perfect?

How soon can Toyota increase Prius supplies?

New hybrids ordered for the growing US market

Toyota’s best year of US Prius sales was 2007, when the automaker sold 181,221 units according to Bloomberg. This year, thanks to the growing Prius family, Toyota aimed for 220,000 units. However, the Prius is now on a pace to blow past 250,000 sales in 2012.

And Toyota aims to ramp up production to meet this demand.

Fortunately and unfortunately, more demand than expected isn’t just a problem limited to the US. Thanks to incentives Japanese demand for the new c hybrid is several months ahead of supplies there as well. Therefore, it’s going to be interesting to see how Toyota responds, and whether or not Toyota is actually capable of meeting demand.

Ultimately, I continue to wonder just how much more production Toyota can squeeze out of its NiMH battery supply chains? Throughout the storied history of the Prius, production has always been capped by battery supplies. If lithium Prius hybrids are just around the corner via the 2015 fourth generation Prius, how much more is Toyota willing to expend on NiMH?

Even more interesting, might Toyota keep NiMH around for some percentage of hybrid cars?

Today, Toyota claims that lithium is still just too expensive compared to NiMH for hybrids. Even as those economics better match up, might it still be advantageous for Toyota to continue NiMH production for some hybrids, such as the C, as a way to make the C hybrid even cheaper? Or maybe NiMH will work for some markets, such as emerging automotive markets?

Anyway, can’t wait to see just how much Toyota can increase Prius production. Toyota seems to be at a point of critical mass regarding hybrid penetration. Are they ready to roll with it, or do the technologies still need to evolve a bit more before Toyota will take the full leap of faith into the hybrid future they’ve been predicting?

Source: Bloomberg

2012 Camry updates were worth the effort

According to Total Car Score

Do hybrid cars save consumers money? Some do and some don’t, and which ones depends on whom is asked. Ask JD Power, Consumer Reports, Kipplingers, etc that question and they all come up with different results.

Car ratings themselves are similar. Edmunds says one thing. Consumers Digest another. Thus, Total Car Score averages all those ratings for, well, their Total Car Score.

And of the most improved cars for 2012, there was only one hybrid according Total Car Score: The Toyota Camry hybrid.

Total Car Score isn’t the definitive guide to car ratings and reviews, but it does give consumers a simple way to assess what the professional car reviewers are saying, without much effort.

Source: Forbes on MSNBC

Still just an electric experiment?

Toyota and Tesla electric car partnership very limited

While the Toyota RAV4 electric crossover is debuting at EVS26, the reality of its limited role in Toyota’s alternative powertrain arsenal has now become obvious. Over the next 3 years, Toyota plans to sell just 2,600 RAV4 EVs according to the DetroitNews.

At a smudge below $50,000, the RAV4 EV is definitely more expensive than the most popular plug-ins on the road today, which would undoubtedly limit sales. But I’d bet Toyota could sell more than 2,600 of these EVs through the rest of 2012, which might suggest the partnership between Toyota and Tesla is quite tenuous.

Of course, maybe it’s just about costs.

Unlike GM and Nissan, for instance, plug-ins aren’t really a halo product for Toyota. The Prius still fits that role, including the plug-in version. And in Toyota’s opinion, the plug-in Prius offers far more potential than any electric car until either a major revolution in battery science occurs, or consumers undergo a massive revolution in automotive expectations and demands.

And, no one outside of each automaker knows just how much it really costs to produce an electric car today, at a real world profit. Numerous automakers have suggested the numbers just don’t add up. Chrysler’s Sergio Marchionne has suggested that Fiat electric cars will still require a $10,000 per vehicle subsidy despite healthy government incentives. So, what’s Toyota’s rush?

Nissan, on the other hand, is still trying to leapfrog hybrid cars, at least for now, especially in terms of perception. For Nissan, the Leaf and electric cars are worth subsidizing and the automaker is ready to back EV subsidies with $5 billion. Some of this cost can help create positive PR and marketing — the halo effect –  that will help recover some of these costs. A new Nissan hybrid; however, wouldn’t easily accomplish such a task. Plus, if Nissan can make the Leaf as synonymous with electric cars as is the Prius is with hybrid cars, then the aggressive Leaf investment becomes an even better idea.

Still, just 2,600 RAV4 EVs in the next 3 years?

To me, that’s bigger than just being cautious. Instead, it seems to suggest that the Toyota/Tesla partnership is still a very carefully controlled experiment. Maybe Tesla struggles over the next few years and Toyota buys a bigger chunk of the company on the cheap. Or, maybe Toyota realizes there just isn’t enough value in a long term Tesla relationship. Either way, in terms of mainstream electrification, the RAV4 electric vehicle is much ado about nothing — at least for the next 3 years.

Source: DetroitNews