GM and Toyota Face Off on Future of Hybrids

By · September 20, 2007

The nuances of hybrid car technology —such as the difference between a series and parallel plug-in hybrid—are almost completely lost to the average car buyer. But those distinctions have led to an escalating battle of words between Toyota and General Motors regarding their competing visions for the next generation of hybrid cars.

Writing in Toyota’s “Open Road Blog,” Irv Miller, group vice president of corporate communications, took direct aim at GM’s Chevy Volt series hybrid concept. Miller accused GM of using “hyperbole” to overstate the benefits of the technology, and advised customers who want a series hybrid to “cross their fingers and wait.” In bold type, Miller wrote, “There are no automotive series hybrids in mass production that actually work. They simply don’t exist.”

In basic terms, a parallel hybrid uses power from the gasoline engine an electric motor, in combination or each separately, to drive the axle. In a series hybrid, the gasoline engine is used exclusively to power the electric motor and batteries, which in turn, drive the axle. (Technically, Toyota systems are series/parallel.) Many industry observers believe that a series hybrid design makes sense only in hybrids with plug-in capabilities and next-generation lithium ion batteries.

It’s entirely uncharacteristic for Toyota to publicly comment on future products—its own plans or those of its competitors. But GM’s vision of a plug-in electric vehicle that can travel 40 miles without using a drop of gasoline and a driving range of more than 500 miles—supported by ads for the Chevy Volt on television, on the sides of buildings, in print and on AM radio— has apparently provoked Toyota into a response.

Winning Hearts and Minds, Feasibility Notwithstanding

Toyota began selling hybrids ten years ago and has sold more than one million hybrid cars globally. General Motors only recently became convinced of the merits of hybrids, and has managed only a few thousand hybrid sales. With virtually nothing to lose, GM has devised a more speculative series hybrid plug-in vehicle in the form of the Chevy Volt—and is running ads even before the underpinning technology has been proven and at least a few years before the vehicle hits the market.

Puneet Manchanda, associate professor of marketing at the University of Michigan's Ross School of Business, told the Detroit Free Press that the ads are premature. “These kinds of things have a way of coming back to haunt you."

But that’s all in the future. For now, GM’s strategy has transformed the company’s public persona from fuel efficiency Neanderthal to visionary leader. Without selling a single plug-in series hybrid, or even knowing if/when it will be able to, GM has put Toyota on the defensive on hybrids, making the Japanese company look conservative and plodding.

40 Miles or Nothing

Earlier this month, Kazuo Okamoto, Toyota executive vice-president, was defending the company’s parallel hybrid system. Okamoto explained that the driving range, battery size, and charge time for Toyota’s parallel hybrid system was superior to a series hybrid design. A few days later, Miller’s blog characterized the Chevy Volt as an all-or-nothing gamble completely dependent on a major breakthrough in battery technology. “The 40 miles between charges that the Volt’s engineers talk about, and that have so many people fired up, are purely theoretical.”

According to Miller, Toyota can keep selling its current hybrid models until advances in battery technology materialize. If advances come slowly, Toyota can gradually enhance the company’s current system rather than waiting for some point in the future when 40-miles of all-electric range is finally feasible. And if batteries do progress rapidly, so will Toyota’s hybrids.

Revolution Is More Fun than Evolution

All the defensive talk makes Toyota look, well, defensive. Meanwhile, GM Vice Chairman Bob Lutz appeared calm and in-charge when he told the Wall Street Journal that he was “100% confident” that the company and its partners had resolved heat-related safety issues in the Volt’s lithium ion batteries. Several months ago, Toyota cited safety issues as the reason for the company to delay the use of lithium ion batteries in the next release of the runaway hybrid hit, the Toyota Prius. Lutz implied that GM had pulled ahead of Toyota in lithium ion battery development, adding that eventually “Toyota will get this technology, too.”

The duel between Toyota and GM reveals the differences between how the two companies are approaching hybrids. Toyota has been selling parallel hybrids for a decade, and is focused on steady, evolutionary improvement of its hybrid systems, incorporation of the technology across a wider range of products, and driving down the costs of hybrids. Meanwhile, General Motors is concentrating both its engineering and marketing efforts on the revolutionary series hybrid architecture of one vehicle, the Chevy Volt. (GM has other hybrids that are not well-supported by marketing.)

The success of the Volt’s engineering will take years to determine. But as long as Toyota feels compelled to contrast its existing hybrids with the stunning vision of the Volt, GM will continue to win the battle for the hearts and minds of consumers wanting the next great thing.

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