Sunday, February 14, 2016

OPINION: The Future of Prius


We stand at beginning of the fourth generation of what was once Toyota's prime real estate, Prius. Their halo. The vehicle that, arguably, made Toyota more than just a Japanese company who makes reliable, vanilla sedans that sell like crazy.

I've been part of this story since April of 2005, almost eleven years. I bought a Prius, well, I ordered a Prius and was considered lucky to get whatever came off the boat, at the time, it was the way Prius sales worked back in those days. Since then I've owned a 2010 third generation Prius and the first iteration of the Prius c, a 2012. I've driven most of the model year examples and most of the variants. I've got a good idea where Prius is at as a brand, from an owner/enthusiast perspective.

The stage, in which the Prius is but one player, has changed significantly over the years. When I got my second generation Prius in 2005 I was, more often than not, stopped and questioned about the car. The Prius was still unusual then. Most people really didn't understand what it was. My regular joke was, and I would tell people this with a deadpan stare, "It's a great car but it only goes 35MPH" and their eyes would get big. They would glance from the car to me and back to the car and ask, "Really?" And I would reply, of course not, it's a regular car, it's just very efficient with fuel.

But it's 2016 and in the intervening decade Toyota has intentionally and consciously moved the Prius away from being a green car leader to being just another mainstream sedan that happens to get good gas mileage. I can't read the minds of Toyota executives but I would guess that the idea was to widen the base of ownership and supplant Corolla and Camry sales with Prius sales, making Prius the sales leader. Toyota US executives have said as much going back five years. It was their announced goal when they created and announced the Prius family of vehicles.

While things at Toyota have gone along their planned path, the landscape, the other car companies, the world in which Toyota inhabits, has not been static, far from it.

--The Players and Their Roles

Chevy finally launched the Volt, their version of a hybrid powertrain. Because of the design of the Volt it works more like an EV than a gas hybrid. While, initially, Chevy did a lot of questionable things with Volt, including allowing Buzz Lightyear...errr..."Maximum" Bob Lutz to be involved, in the end what Chevrolet has accomplished with Volt has been impressive. The records, the real word experience of thousands of Volt owners proves out the concept and that even though the Volt is essentially a hybrid, it uses much less gasoline than hybrids of the Prius design use. Meanwhile, Chevy is promising to ship the Bolt, a reputed 200 mile pure EV later this year that will sell in the mid thirties and is now shipping Volt 2.0, a significantly improved Volt with increased range.

Nissan launched the Leaf, a pure EV, which met with a lot of stumbles and questions initially. Some battery management issues plagued some Leafs in warm weather states but Nissan appears to have dealt with those issues and can boast of having a lot of happy Leaf owners.

And then there is Tesla. Formed in 2003, Tesla started by making their tiny, pure EV Roadster from bodies supplied by English motoring legend, Lotus. Since then they have introduced and sold more the 100,000 Model S sedans in various configurations one of which, the P90D is one of, if not the fastest production vehicles on the road. And, I would add, for much less than most of the other supercars the S competes with and in a form factor, a four door sedan, that almost legitimizes their "ludicrous mode" designation.

Tesla has also recently launch the Model X, another pure EV in SUV form. It's a little too soon to say the X is a success but it seems to be doing well and, as yet, we've seen no major manufacturing issues. Considering Tesla is a company less than fifteen years and they've built two vehicles, from the ground up, that's impressive. GM still can't avoid annual recalls in the six and seven figure level and they’ve been doing this car building thing for more than a century.

Now Tesla is set to move forward with the Model 3, another pure EV which has Tesla cache and is set to be priced starting where the top end of Prius line ends, in other words, around the same price. This is a dangerous time for Prius as it could easily eclipsed technologically and environmentally by the Tesla Model 3. Tesla's Supercharger network is a free bonus that Toyota can’t match (Toyota can’t even build H2 stations to support the embarrassing, fuel cell flop called Mirai).

--The Play

This could be a bad time for Toyota. Toyota has decided to leave their home since their introduction in the US, California. California is a state perceived globally as a technology leader. The new Toyota corporate home, Texas, is a place better known for big trucks and bad legislation.

Finally, Saudi Arabia has been extremely aggressive in wanting to own the energy market and have systematically depressed gas prices far below where they have been in decades. Much of the nation now sees retail gasoline prices between one dollar and two dollars per gallon. While the only argument to own a Prius has never been, because gas is expensive, it's always been a big and very popular one. Gasoline prices being this low only further blunt the message of Prius, well, wait. Actually, this is a fun car and has nothing to do with gas mileage. Uh, but, everything for the last fourteen years about Prius has been about fuel efficiency and environmental impact, oh hell, this marketing game gets confusing doesn't it? Suffice to say, one of the main selling points of Prius ain't what it once was and until the Saudi's relent, that won't change.

While the Prius was touted as a technology leader throughout its history, that leadership has lagged in recent years. The Prius is getting a little long in the tooth as other vehicles, similar in aim but different in technology, do more than leapfrog Prius whose biggest bragging points in this new generation have been safety and drifting. If the Tesla Model 3 comes out with a legitimate package of performance that slaughters the competition as its level as the Model S already has, Toyota and the Prius are in a world of hurt. Which sort of gives potential background to the obvious hedging of Prius bets by Toyota executives of late. Where, not too many years ago those executives were all but building Prius into its own brand, now, they're talking about ending at least one model and that maybe Prius isn't the future for Toyota.

In music, this is called the “sophomore curse” where a musical artist who had a big debut album flops on the second album. 

So, your humble narrator heaves a heavy sigh and wonders, what next? Well, that's a very good question. Toyota, much like Apple, isn't big on sharing their plans for the long term or even most of their short terms projects. They generally announce projects when they are near completion. It avoids the embarrassment that, say, Chevy suffered when it had to totally redesign the Volt because it performed better in the wind tunnel facing backwards, than forwards (allegedly). Toyota has strenuously avoided EVs to the point where the last generation Prius Plug-In was really just a Prius with a bigger battery and some limited EV functionality. We hear rumblings the new Prius Plug-in may offer more but, well, given Toyota's track record on electric vehicles, it's better to wait and see. Toyota killed the RAV4EV project, a collaboration with Tesla, to produce one of the most exciting to drive SUVs I've ever driven. Granted, the RAV electric project was limited from the start but why? I think it all comes back to Toyota's corporate reticence to make electric vehicles. Toyota has launched a RAV4 hybrid which seems to be doing well initially. It's the shape everyone loves and it's a hybrid. So yay, that’s a victory of sorts, assuming you think killing off an EV and adding a hybrid is a step forward.

For myself, I think Toyota's almost pathological anxiety over electric vehicles is, well, it's weird. Toyota has sunk hundreds of millions, maybe billions of dollars, into their Mirai fuel cell vehicle a car being made, by hand, only in Japan, in limited numbers. We're talking dozens at a time here, not even hundreds. Yet, not long ago Toyota asked the handful of dealers selling Mirai in a very limited area to wait, and not sell them because the infrastructure for refueling is still not in place.

And yet, no EV from Toyota.


Finally, back to Prius. Where does all this leave a gas/electric hybrid? My guess, and I preface this in that manner intentionally, my guess is that we're going to see Prius continue to fade from being a technology leader as other car companies make other vehicles that use zero gasoline and that have more innovative features. Even if gas prices do go back up, which they will, with a vengeance I think, at some point, it's clear that the Saudi strategy is one of long term market dominance and we might see cheap gas for another year, maybe more. Which may mean more stagnation for Prius sales. It means Prius recedes further in the mental rear view mirror of the public as others things, Chevy Bolt, Tesla Model 3, take center stage. It doesn't make me happy to say this but, from what I know now, it's what I think could easily happen.

My 2005 Prius the day I got it, in April of 2005.

Thank you to my PEX friends who helped with suggestions on the first draft of this piece.


Toyota Japan has introduced a new type of paint, as an option on the new Prius, which will reduce the amount of solar heat the car will absorb. The option costs about an additional $380 and has been dubbed, "Thermo-Tect Lime Green".

Here's how it works. Most car paint contains particles of carbon black (no matter what the actual paint color is). This carbon black is very good at absorbing heat from sun thus heating your vehicle up. In ThermoTect paint, Totoya has replaced the carbon black with titanium oxide and the new paint reflect most solar heat than most. Toyota claims that the new paint reflects more sun than their standard white paint.

Now, say what you will about the "Lime Green" part of Thermo-Tect paint but do know that Toyota could use this titanium oxide base with any color thus making it more reflective to solar heat, or so the theory goes.

While lots of outlets have no love for the green, I like it.

And to be clear, for now, this option is only available in Japan. So you'll only confuse your dealer if you ask for it here.

I've included some of the graphics from the Toyota Japan press release for those of you who like graphics or read Japanese.