Skip to Content

Toyota Plans a Hybrid Strategy

As Nissan and GM prepare to ship flagship electric vehicles, Toyota is taking another road.
November 29, 2010

Nissan and GM will start shipping their flagship electric cars—the Leaf and the Volt—next month. Toyota also recently unveiled a new version of its RAV4 electric SUV at the Los Angeles Auto Show. But unlike Nissan and GM, which have put considerable effort behind the marketing of their electric cars, Toyota has made it clear that it regards electric cars as niche vehicles, and is pinning its hopes on hybrids instead.

Also ran: Toyota recently unveiled its new electric RAV4 at the Los Angeles Auto Show. The vehicle will go on sale a year later than Nissan’s electric Leaf.

Toyota will make just 35 test versions RAV4s next year before rolling out a production version of the car to customers in 2012.

Carlos Ghosn, the CEO of Nissan and Renault, with which Nissan formed an alliance last year, has said that 10 percent of all models sold by these two companies will be electric by 2015 (about 820,000 vehicles, according to sales projections by J.D. Power). This will start with the electric Leaf, a car with a 73-mile range, according to the EPA. Nissan plans to introduce hybrids, but at nothing near these levels.

In contrast, Toyota says that by 2015, 10 percent of its cars will be hybrids, or about 990,000 units, based on sales projections. Toyota sells more hybrids than any other automaker. Toyota is focusing on hybrids in part because it knows the technology works (it has years of real-world testing with the Prius).

The lithium-ion battery technology for the Volt and Leaf has been tested in the lab, and briefly in cars on the road—but no one knows how it will perform over the life of the vehicles. And the success of the Prius has enabled Toyota to drive down costs with high-volume production. These factors have led J.D. Power to predict that hybrids will be more successful than electric vehicles, outselling them three to one.

Many automakers are spreading their attention among several options. They are “doing a little bit of everything, because no one really knows what technology will be the winner,” says Michael Omotoso, J.D. Power’s senior manager of power-train forecasting. This means these automakers are making all-electric vehicles, ordinary hybrids, and plug-in hybrids, which contain larger batteries than ordinary hybrids and can be charged via an ordinary electric outlet. Plug-in hybrids can use less gasoline than conventional hybrids.

GM is marketing the Volt as an electric car although technically it is an extreme example of a plug-in hybrid. It runs entirely on electricity for about 40 miles, but can use gasoline for longer trips. GM plans to make 10,000 Volts in 2011, and 30,000 to 40,000 in following years. It’s also planning a plug-in hybrid with a shorter electric range than the Volt, as well as a number of hybrids.

Toyota downplayed the significance of the electric RAV4 at its announcement last week. It began with a reminder that the last time Toyota tried to sell an electric RAV4—for five years starting in 1998—it was a dismal failure in the market. Toyota sold or leased just 1,484 vehicles, said Jim Lentz, president of Toyota Motor Sales, USA. “Enthusiasts loved it. Mainstream buyers, not so much,” he said.

Lentz said that attitudes toward electric vehicles have changed since then, but the car itself hardly has. It is still limited to about a 100-mile range, like the original electric RAV4. Lentz went on to speak about the hybrid Prius, which came out at about the same time as the RAV4 EV but was much more successful. “At less than half the price and with no loss of convenience, Prius was able to convince millions of mainstream consumers that the electrification of the automobile was possible, reliable, and affordable,” he said.

The electric RAV4 is part of a strategy to address niche markets. “A mobility system in Los Angeles will probably look very different from one in Dallas or New York or London or Shanghai,” Lentz said.

The day after the RAV4 was demoed, Toyota held a seminar in Japan outlining its plans for “eco-cars.” Front and center are hybrids, with a total of 11 models set to go on sale in 2012. Toyota also plans to produce a plug-in hybrid in 2012, and sell 50,000 of them a year. These plug-in hybrids are basically modified Priuses with larger battery packs that give a 14-mile electric range. “Toyota is the worldwide leader in hybrids right now,” Omotoso says. “It wants to maintain that position.”

Keep Reading

Most Popular

It’s time to retire the term “user”

The proliferation of AI means we need a new word.

The problem with plug-in hybrids? Their drivers.

Plug-in hybrids are often sold as a transition to EVs, but new data from Europe shows we’re still underestimating the emissions they produce.

Sam Altman says helpful agents are poised to become AI’s killer function

Open AI’s CEO says we won’t need new hardware or lots more training data to get there.

A brief, weird history of brainwashing

L. Ron Hubbard, Operation Midnight Climax, and stochastic terrorism—the race for mind control changed America forever.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.