President Obama visited Holland, Michigan on Thursday to celebrate a potential success story for both the stimulus package and his auto bailout — the groundbreaking of a factory that will produce the lithium-ion batteries necessary to power thousands of new green vehicles built by Ford and General Motors.
So why does the world’s most successful maker of eco-friendly cars believe that Detroit is once again on its way to peddling products that Americans don’t want to buy?
Toyota Motor Corp., which in 2009 sold more hybrid vehicles in the U.S. than all other auto manufacturers combined, has spent more than a decade developing its own lithium-ion technology. Yet, where Detroit and apparently the Obama administration see a market for nearly-emissionless automobiles, Toyota sees demand for cheaper, low-emissions products. Its first lithium-ion electric vehicle, a version of the Prius, will only have an average range of 13 miles per charge before the standard hybrid engine takes over. GM and Ford are both preparing to launch vehicles designed to rely mostly upon massive batteries that boast an average range of over 30 miles per charge.
The range disparity is no accident on Toyota’s part.
“Consumers have to pay a premium for plug-in capability,” said John Hanson, Toyota’s National Manager of Environmental, Safety, and Quality Communications, in an interview with The Daily Caller. “If we’re trying to create mainstream acceptability, cost is a huge factor, and small batteries are the way to go.”
In other words, the stimulus-sponsored push for rangy electric cars is useless without customers. Dr. Menahem Anderman, president of Advanced Automotive Batteries, explained via email that the White House is getting its own way by ignoring economic reality.
“Rushing to build multiple plug-in battery plants is misguided,” Anderman wrote. “Neither the plug-in battery technology nor the plug-in market are proven and both carry significant risks.”
Independent research verifies the cost concerns. A 2009 study by Carnegie Mellon University comparing the effectiveness of vehicles powered by large plug-in batteries to those powered by small plug-in batteries and conventional hybrid engines found that the lifetime costs of the small-battery vehicles, with ranges similar to the new Prius line, were lower than those of their large-battery counterparts under every tested scenario. The study also found that the largest battery tested, which offered a range of 60 miles per charge, actually produced 10% more greenhouse gases than a battery with a range of only 7 miles when regular recharging was possible, as would be expected with urban driving.
Toyota has come to a similar conclusion about overall pollution.
“Keeping the battery as small as possible is not just a cost issue, it’s a total greenhouse gas issue,” said Hanson. “The environmental effect of producing and charging the batteries, as well as their additional weight, has to be considered.”
Congress, meanwhile, has been considering the problem of price for Detroit’s government-sponsored long-range electric vehicles, and will attempt to bridge the bottom-line gap with more federal money on the consumer end. Cars sporting bigger lithium-ion batteries will receive an environmental tax credit nearly twice as large as that granted to the Prius, despite questions about the difference between their respective carbon footprints.
But Hanson remains confident in the business sense behind Toyota’s strategy.
“Incentives won’t be there forever, they can’t be,” he said. “The Prius has been so successful because of its appeal to mainstream buyers.”
WATCH: STIMULUS FRUSTRATION CONTINUES