Toyota Rolls Out 21 Hybrids, Looks to Fuel Cells; Germans Go for Electric Instead

While some car manufacturers are placing their bets on electric cars, Toyota has decided to continue its focus on hybrids, and will introduce 21 updated or full model change hybrids in the next three years.

It expects to sell a million hybrids each year through 2015. This year, the Prius family became the third top sellling cars in the world.

The company is looking to reduce the cost of producing hybrids to increase sales and bring profits in line with conventional cars.

Toyota sold 310,000 hybrids in Japan last year, making up 26% of its sales there, but it sold about half that (178,590) in the US – a tiny percentage of the 1.64 million vehicles sold. So far, it’s sold 8400 Prius plug-ins (Prius PHV) in Japan and 6100 in the US since it debutted this year. 

This week in the US, Toyota launches sales of RAV4 EV – a small SUV that has an electric motor made by Tesla. The car sells for $49,800 – its goal is to sell just 2,600 in the next three years in California.

Because of the use of proprietary technology, the company sees a brighter future for fuel-cell powered cars than electric, which the company says "can be made by any company." It plans to introduce a fuel cell sedan and a bus in about three years.

Honda Agrees on Fuel Cells

Calling fuel cells the "ultimate environmentally responsible vehicle," Honda plans to introduce a fuel-cell electric vehicle for sale in the US in 2015. 

Honda CEO, Takanobu Ito, made the announcement in a speech this week in Japan where he set the company’s sales goals for the next five years.

"This new fuel cell vehicle will showcase further technological advancement and significant cost reduction that Honda has accomplished," he said.

The company has been working on the technology for a decade in its FCX Clarity – it’s three times as fuel-efficient as a conventional vehicle and twice that of a hybrid, Honda claims.

Honda is hedging its bets however, also producing electric vehicles, like the electric version of the Fit. 

Hyundai Goes Straight to Fuel Cells

Hyundai has also been slow to move on electric cars and is focused on fuel cells instead.

Electric cars are slow to win consumer acceptance, Hyundai says, because the cars take too long to charge, have short driving ranges and expensive batteries, which boost the price.

Fuel cells have their own problems, of course, such as very high production costs and just a few scattered hydrogen fueling stations.

But Hyundai wants to get a jump on that market, and is introducing its first car at the Paris Motor Show. The fuel cell version of its Tuscon crossover goes on limited sale this year – just 1000 cars – as the company works on halving production costs, reports Reuters. The initial price is a hefty $88,000 from a manufacturer known for less expensive models.

Hyundai thinks it can make fuel cell cars for the same price as electric by 2020-25, says Reuters.

BMW, VW, Mercedes, Daimler Go For Electric

So far, German car manufacturers have been quiet on advanced vehicles, preferring to fine tune conventional models, but BMW, VW, Mercedes and Daimler are all ready to push into electric.

"German manufacturers slept through the hybrid trend, which eroded their image as technology leaders," auto analyst Peter de Haan of Switzerland-based Ernst Basler + Partner told Bloomberg. "Electric drives give them the opportunity to recover."

In the next few weeks, Daimler will debut an electric version of the Smart Car and Mercedes is showing off it SLS AMG E-CELL at the Paris Motor Show this week, in advance of sales next year. The "supercar" has four electric motors that achieve acceleration to 62 mph in just 4 seconds, about the same as the gas-powered version. 

VW is readying electric versions of the Up! city car and the Golf for next year; Audi’s R8 e-tron two-seater and the Porsche 918 Spyder plug-in arrive in 2013. BMW has the i3, the the first car in a new "i"electric sub-brand. Nissan is moving beyond the Leaf to Zoe, a compact made by partner Renault.

Market research firm IHS Automotive expects 102,000 electric vehicles to sell worldwide this year and to more than triple in 2014 to 384,000 cars.

Will Electric or Fuel Cell Win?

"The great thing about a battery powered electric car is that power sockets can be found anywhere," Andreas Winckler told Reuters. He’s managing director of a German conference organizer that’s leased both kinds of cars. "Before we installed the first charging stations here, we just opened a window and ran an extension cord out to the car." In contrast, the one hydrogen fueling station in the entire region hasn’t been working for weeks, he says.

"Battery electric car makers entered the market too early without resolving problems such as range anxiety and costs," Lim Tae-won, director of Hyundai’s fuel cell research told Reuters. "It was a hasty approach. The battery electric cars may have helped raise brand value for a couple of years, but ended up slowing down the take-off in the market."

Hyundai’s plans start small with just 10,000 fuel cell sales by 2015, but they rise to 100,000 in 2020 when it sees reaching economies of scale.