Perhaps Toyota's massive edge with hybrids means that PHEVs will lead the way, at least initially.

Recently, Toyota had a press release discussing its future electrification plans. I’ll go ahead and post the chart here to help refresh your memory. I realize the BEV portion of this plan is somewhat disappointing to most readers of InsideEVs. In fact, it is clear that Toyota believes that they will be selling more fuel-cell powered vehicles than BEVs. The good news is, they have at least confirmed that they will be rolling out some BEVs starting next year.  

But, when I saw this chart, I still had a lot of optimism. First of all, it’s very clear that by 2050, Toyota plans to essentially eliminate traditional gasoline-powered vehicles, and the bulk of their sales will be split evenly between hybrids and plug-in hybrids. I’m very confident they can pull that off. In fact, this chart caught me somewhat off guard.

I looked at the blue segment for hybrids and noticed that the 2020 mark (basically where we are now) shows a very healthy chunk of their sales are already hybrid. I was thinking, surely that couldn’t be all Prius. So, I had to grab last month's sales results for Toyota. Keep in mind, this is USA sales only. These are all of the hybrids they sold last month. I think the one that blew me away was the RAV4 hybrid. They sold almost 11,000 of them in a single month here in the USA.  That’s almost twice as many Priuses. Again, this is USA sales only. I’m sure the worldwide number for these is much higher.

And, it’s no wonder either. I looked up the starting MSRP of the RAV4 and found it costs $25,650 and gets 26/35 mpg. The hybrid version costs $27,850 and gets 41/38. So, you only have to pay an additional $2,200 to get the hybrid. And the hybrid version gets you AWD. It’s really no wonder why so many people opt for the hybrid. Toyota has finally managed to get the economies of scale on these hybrids to the point that they are inexpensive and profitable.  

And, that’s what brings me to the main point of this article. I know that BEV purists don’t like to talk about plug-in hybrids.  But, that’s the focus from here on out. One problem we’ve seen over and over with BEVs and PHEVs by other car manufacturers is that they weren’t profitable. Take the Chevrolet Volt, for example. I honestly believe it is the best PHEV ever made. It was designed ground-up to be a PHEV. Nobody besides GM really knows if the Volt actually made any sort of gross margin on the vehicles sold. But even if it did, it’s widely speculated that GM never recouped the research and development costs of designing the car.

Now, take the Prius Prime. Toyota took a very different approach. They took a car that was already profitable and sold in high volumes, the Prius. All they really had to add on the car was:

  • A larger battery pack, using the exact same Lithium-Ion cell modules that they already manufactured for the regular Prius, only instead of 2 modules the Prime has 5.

  • A charge door on the side of the car.

  • A 1-way clutch between the engine and transaxle so that both MG-1 and MG-2 can drive the car without the engine spinning (very similar to the 2nd-gen Volt)

  • A 3.3Kw battery charger

  • Remove the boost-converter since it is not needed due to the battery having a higher voltage.

Granted, they made some other cosmetic changes to the car, but this was essentially what was required to turn it into a decent PHEV. Virtually all of the rest of the drivetrain, and, in fact, the whole car is based on an existing, mass-produced, profitable design.

The key word to take away from all of this is profitable. Without any doubt at all, the main reason most manufacturers, outside of Tesla, are not pushing their BEVs or PHEVs is that they are not profitable, or at least not profitable enough to compete with the other products they sell.  However, I believe that Toyota is able to sell the Prius Prime at a profit.

That brings up the questions, why aren’t they selling more of them? Why are there huge areas of the USA that do not even have the Prius Prime available for sale? There are many theories to this. One theory is that they don’t yet have enough battery capacity for the Lithium-Ion cells.  Most of their hybrids, including the popular RAV4 are still using NiMh. Another theory is that they are testing the waters, so to speak, to see how people use these vehicles and how they hold up. 

Based on the chart showing their PHEV ambitions, I tend to think this could be the case. Which means, Toyota is getting ready to ramp up their PHEV products. That means we may be seeing other vehicles such as the RAV4 being offered as PHEV in the next year or two. After all, according to the chart, 10 years from now they plan to be selling as many PHEVs as they are selling hybrids today. That means, expect to see numerous PHEVs from Toyota, with sales as high as 30,000 units per month or 360,000 units per year.

As far as vehicles of any sort with a plug on them, I don’t expect anyone outside of Tesla to be selling that many in the next few years. One possible reason is the lack of battery cells. Tesla stated in their recent stockholder meeting that they are supply-constrained on cell manufacturing. It even said this is one reason they are not in a hurry to introduce new models since they won’t have cells for them and they are selling every Model 3 they can produce at the moment.  

Being that Toyota will likely be producing PHEVs that fall in the lower-end of the sweet-spot for EV range, they will likely be using approx. 10 KWh battery packs or less. That means it needs only about one-eighth the battery production as Tesla for a similar amount of cars.

Let’s talk about some of the technology that Toyota already possesses and manufactures now. First and foremost, the Prius Prime gets 133 MPGE when running in EV mode. This is extremely efficient and the only car that matches it is the Tesla Model 3 and is slightly exceeded by the Hyundai Ioniq EV. For example, the Chevy Volt only got 109 MPGE. That is one of the reasons the Prius Prime can do 25 miles of range on an 8.8 kWh battery, yet many other cars such as offerings from BMW have much larger batteries and yet still get much less range. For example, the BMW 530e only gets 72 MPGE.

The other thing they have is their gas-injection heat-pump system, which is amazingly efficient.  Since I do own one of these vehicles, I can attest to the fact that it is extremely efficient. Whether hot or cold outside, I never lose more than about 2 miles of range for using it. Just to be clear, the car still typically gets 25 miles of range even with the AC or heater running. It gets even more with it off.

Needless to say, Toyota excels at efficiency in its drive motors, inverters, and heat pump systems. Much of this technology is a result of decades of experience in hybrid vehicle design. So, for those that are fans of PHEV technology, I have good news. Toyota is probably planning on selling these in very large numbers, and they will be very efficient. They may not be as exciting as a Tesla, but I think they will be a very important transition technology.

I expect to see PHEV versions of the RAV4 coming soon, and possibly even the Tundra since we know a hybrid version is already on the way. The larger vehicles may allow for better packaging of the batteries. With the prices of these vehicles being intrinsically higher, the cost of the batteries won’t be as much of a problem, thus you might expect to see more EV range in a RAV4 PHEV than the Prius Prime.  

I also believe Toyota is mistaken on their stance with BEVs. At an absolute minimum, they will be selling more BEVs than they are selling FCEV.  I truly do not believe the market exists for FCEV. If they do end up selling more FCEV than BEV, the only reason will be lack of desire on their part.

At any rate, these are my opinions. I'd love to know what you think. Leave us some comments below.