On Saturday, October 30, 2005 the Prius Club San Diego and members of the Orange County Prius Club met at the Ford Alternative Fuel Depot at El Cajon Blvd and I-15 to hear Dave Hermance from the Toyota Technical Center The following are some rough notes of the presentation.

Toyota decided that the best way to sell cars for a very long time is to build cars that have the least impact on the environment.

Toyota has always built cars that have met to the utmost the current environmental standards. You can either build cars that have fuel economy or that have high performance. U.S. market doesn't’t care much about the environment.

Potential Hybrid benefits

-Improved fuel economy
-Reduced exhaust emissions
-Improved power performance
-Combinations of the above.

Basically you can’t do all of everything on any system.

List of Toyota US market hybrids.

There will be a 2007 GS 450h but that won’t be a fuel economy vehicle but a performance vehicle.

Toyota will stand by their record, any day, any where re: the environmental groups unhappiness over the HighlanderH and the RXH.

There will be a range until Toyota knows what the market wants. The market doesn't’t even know what the market wants yet.

Neither the EPA nor Toyota promised 60/51/55 Your Mileage MAY Vary

Prius saves about 352 gallon a year versus average midsize.

Sept. 150,00 sold

Over 200,000 overall.

About 30% of the US Market is in California.

Dealers had almost worked off backlog when Katrina hit. There are waiting lists again. Increased model demands. Nov 1 is beginning of 2006 run. Est. tax CREDIT for the 2006 is $3150 unless you’re subject to the AMT.

Prius 55.3 mpg saves 346 per year midsize car
diesel 30.9 -saves 214 gallons per year
mid size 28.3

A significant and growing percentage of the customers indicate a willingness to buy an environmentally friendly vehicle. (exhaust emissions.)

IF and only IF they don’t have to give up anything, all other attributes are equal or better.

It's why alternative technology has had a real hurdle to get into the market.

Prius 1998-2000 LEV subcompact, sold in Japan only, 42 mpg combined, accel: 0-60 14.5
Prius 2001-2003 SULEV compact, 50,000 over 3 years, 49 mpg combined, accel: 0-60 12.5
Prius 2004- AT-PZEV midsize, 50,000 sold first year, 100,000 sold for 2005, 55 mpg combined, accel: 0-60 10.1

Prius isn't’t even the smallest midsize car.

With three successive generations of Prius they’re bigger, faster, cleaner and get better mileage with each generation.

Toyota site has a ticker that shows how many gallons hybrid sales have saved to date. (There is now a billboard in L.A. next to the freeway)

Lexus RX 400H; Better location is UNDER the back seat rather than behind. Better redesign. V6 and more compact transmission. Otto cycle. 2006 SULEV 31-27-29 YMMV. Saves 350-450 gal a year versus a comparable luxury SUV. $48,5353 MSRP 12,621 through August 2005 (5 months)

Selling a bout 2,500 a month. Sales of both the Lexus and the Highlander are exceeding predicted sales.

Highlander is midsize SUV. mpg: 33-28-30. Saves 280 gal year versus sid size SUV. $33,030-$34.430 MSRP 2 wheel/ 4 wheel drive. 8,311 sales through August 2005 (3 months)

Not all the Lexus options are available on the Toyota. Bun warmers are standard on Highlander and option on Lexus.

Electric all wheel drive will become more standard.

GS450H is a 6 cylinder vehicle. rear wheel drive, luxury sports sedan. Most expensive and best performance. 0-60 in less than the GS 430 (<4.8) First rear wheel drive full hybrid. 3.5 liter V-6

Issue soft hybrids:

Target selection
Most US buyers value performance over the fuel economy
Additional segments must be covered
Mitigation of Price Premium-
learning will lowering premium
increased volume will lower premium
unique attributes offset some premium
Market confusion over Types and Benefits
not all hybrids created equal
but they may be marketed as if were equal.

Drive train for Prius is 50% less to produce than the original 2000. Instead of subsidizing they are now making a small profit.

You have to crawl before you can walk before you can run.

Performance mitigates the price premium.

New Honda Civic no longer avail in a manual. Insight only one in manual now.

Global Toyota sales:

300,000 hybrids total by 2005

300,000 per year rate by mid-decade
1,000,000 per year rate by the end of the decade/early next decade

The Chinese construction is tiny, it’s an appeaser.

25,000 hybrid units a month are being built.

Selling 60% of the product being sold (in us?)

Toyota is the hybrid seller both US and globally.

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Fuel Efficiency Communications

Dave Hermance
Toyota Technical Center, USA

Prius only produced in Japan. Have not reached the full capacity of the two shift, line in the Japanese factory yet.

For knowledgeable audiences

Fuel economy is misleading

Fuel economy is non-linear versus all issues of interest

-cost of fuel-
-gallon of fuel used
- CO2 emitted

Fuel consumption is the better metric and is a European thing. -not likely in U.S. due to cultural inertia

Gallons saved has significant merit

Every 100 gallons of gasoline saved has the following impact:

$300 in owners pocket
One ton of CO2 not emitted
4 barrels of crude not consumed.

Each additional 100 gallons saved has the same impacts (the metric is linear)

Gallons saved:

Civic hybrid saves 238 per year compact car
Prius saves 346 per year midsize car
Escape saves 314 per year midsize SUV
GM PHT saves 94 per year large pickup truck

Urban Legend

Everyone knows the EPA test is no good.

Consumer’s Union uses their own on-road tests.

The data certainly suggest that the Prius has a larger shortfall, right?

But if you convert that to gallons used per year basis. The Prius shortfall is the same as all of the other cars if you used gallons consumed over the year.

We should use fuel consumption rather than fuel economy.

On a gallons saved per year basis, the EPA ratings are a good comparison. The CU comes out the same when you compare gallons saved per year comparing the cars.

Another Urban Legend.

High efficiency vehicles suffer more in extreme operation. Cold, hot, aggressive.

Again, the data certainly suggest that a Prius has a larger shortfall, right?

When converted to gallons consumed, the Prius average increase in gallons is less than the other cars by 25 gallons or more. One comparison has Prius 40 gallons less.

The Prius is less effected by adverse driving conditions than other cars.

On a gallon saved per year basis, the EPA ratings are a good comparison and perhaps too conservative.

EPA plans to change the calculation of the label mpg values, but they must keep the mpg metric by law.

However , they could provide useful information on fuel use and savings within class to improve customer knowledge.

They could use something like the diamond star labels they use on appliances to show energy consumption and savings over a year.

Phone: 619-280-6662