Toyota: Greenest Car Company?

The runaway success of the Prius gasoline-electric hybrid vehicles, with real-world fuel efficiency reported between 45-60mpg, probably has something to do with it. Toyota has maintained a strong green image that consumers are broadly aware of. Interestingly, the survey also found that consumers consider friendliness to the environment (35% respondents) to be more significant than styling (23% respondents).

However, my guess is that by 2010, the green leadership will be thrown wide-open. Just look at the energy around green that Jody encountered at the NAIAS conference. With all the major automakers jumping into the fray of green technology, surely at least several will succeed in bringing viable green cars to the market. The Consumer Report list may look very different two years from now!

Still, it is good to know that the leader of the pack, Toyota, is not resting on its laurels. In fact, Toyota has upped the ante in this race. Masatami Takimoto, its VP of powertrain development, boldly declared that by 2020, Toyota will be all-hybrid. Takimoto said that cost cutting on the electric motor, battery and inverter were all showing positive results and by the time Toyota’s sales goal of one million hybrids annually is reached, it “expect margins to be equal to gasoline cars”. (Currently Toyota has sold around 400,000 cars.)
The company expects cost-savings to come from improved quality, reduced waste and human resources development, in addition to their new “Value Innovation” (VI) plan. The goal? A lofty $2.9B per year starting 2008.

Given that the last time they tried, they saved $9B over 5 years, the cost savings goal seems quite achievable. If you haven’t read “The Toyota Way: 14 Management Principles”, check it out. It eloquently describes how Toyota pioneers the lean manufacturing concept which allowed it to cut cost by improving processes and quality. Today, newer cost reduction processes will be needed, perhaps along the line of car companies sharing parts under the same label.

I am excited by news that Toyota plans to release a plug-in hybrid by 2010, around the same time as GM Chevy Volt PHEV release. One caveat to note: according to LA Times, GM has unfortunately, cautioned that the Chevy Volt may be delayed. So it remains to be seen which, if any, major automaker will successfully bring such a vehicle to market, beyond marketing. I am curious where Toyota will be too. All in all, I am pretty vowed by Toyota’s leadership so far as a green company. Apparently Toyota is not resting on its laurel and is working to make the economics of hybrids more compelling.

Who will move forward into the leadership position as a green car company in the next two years. Will it be Toyota retaining its lead? Or will it be Honda, Ford or GM? Or will it be some upstarts we haven’t heard of that surprise us? This is an excitingly innovative time indeed for automobiles. They say necessity is the mother of invention. Well, tackling climate change is a necessity. Apparently it is already helping us think out of the box with cars. As one reader commented, in the past, no one used to talk about car this way. Now everybody is concerned about mpg!

Go green! Go automakers. Surprise us with your innovation and capability, and let us buy some real cars that solve the real problem of climate change -- in several years, not decades...!

Marn-Yee Lee
Contributing Editor
AskPatty.com

Marn-Yee Lee is pursuing an MBA in Sustainability at the Presidio School of Management in San Francisco. After spending a decade in I.T. and on Wall Street, she is now pursuing her passion for the environment. She sees business as a partner for creating innovative solutions to pressing environmental issues. In her spare time, she writes a blog to inspire others to consider the impact of their daily lives on the environment at busythinking.blogspot.com.

Flickr photo by ~dabbler~ (formerly jowo)