Toyota EV guru Bill Reinert not keen on pure electric; China government would agree for now.

Toyota rules the hybrid market here in the U.S.—sales of its Prius account for about half of all hybrids sold here. And the Prius family is growing – it now includes a larger Prius than the original model, a smaller Prius, and a plug-in hybrid Prius. http://www.toyota.com/upcoming-vehicles/prius-family/?srchid=K610_p3074941791  So it might surprise you to learn that Bill Reinert, Toyota’s advanced technology guru, is pessimistic about the potential for plug-in hybrid and pure electric cars.  Hell, he is even pessimistic about the future for hybrids.  His reasons are familiar—the battery is too expensive and thus the vehicles themselves.  Consumers are most concerned about fuel efficiency, he said, and if they can get that in a car with an internal combustion engine that costs less than an electric vehicle of any kind, they will go with the ICE-powered vehicle.

Bill Reinert, Toyota's advanced technology guru, figures electric vehicles will only be a niche in 2020. And he figures fuel cell is the really promising technology.

Reinert’s remarks seem to validate the decision by China’s government to focus more on hybrids and PHEVs in the near term while they wait for battery electric vehicle technology to mature.  His comments also add fuel to the fire currently raging in Washington, DC about the Department of Energy’s program https://lpo.energy.gov/?page_id=43 to provide loan guarantees and outright loans to companies developing EV technology. http://www.autonews.com/article/20120409/OEM01/304099974/1424/doe-auto-loan-program-was-badly-bungled

I think Reinert would agree, however, that those programs, and the Chinese government’s continued support of BEVs in the longer term, make sense.  Remember when mobile phones were as big as a bread box?  Only more research created the tiny mobile phones we use today. And only more research will improve battery technology.  Just who will fund that, at least in the U.S., is up in the air, however. China seems to be forging ahead. Hey, maybe China will fulfill its dream of being a first mover in BEVs after all. With help from many U.S. and European companies’ technology….

But I digress.  Bill had too many valuable things to say for me to simply pull some comments and write a story. Below are edited comments from our conversation. Good stuff.

China-EV:  Your title is National Manager, Advanced Technology Group at Toyota. What does that encompass?

Reinert:  We look 20 to 30 years out to determine what are the trends and technologies coming along, when will they likely be mature, what does that mean to our fleet and our business model and brand,

China-EV:  When did you start to look at the future of the battery electric vehicle?

Reinert:  About 1999, when the RAV4 battery electric vehicle was offered for leasing,   we did a deep dive and saw that even though there were a lot of hand raisers (who said they were interested in a pure EV), there weren’t a lot of wallets on the table.   We were 100% subsidizing that product.   Events in  2006,7 and 8 led us to believe there was not a first mover advantage to electric cars.  The sales numbers bear that out.

China-EV:  Why are other automakers seemingly rushing to offer pure electric vehicles?

Reinert:  Sometimes you get wishful thinking marketing caught up in the reality of engineering.  We could see right away there wasn’t the strongest business case in the world for a bigger battery in the car.   The business case got upside down.

China-EV:  Toyota pretty much rules the hybrid segment in the U.S., but sales in that segment in general haven’t shown much strength. Why not?

Reinert:  Because the economic conditions in the U.S. and other economically developed countries,  don’t favor spending a lot of money on fuel economy. The hybrid is still misunderstood,  (and) if you can get a small 4 cylinder car that gets 40 miles to the gallon that meets your needs, why pay a premium for a hybrid?

China-EV:  What don’t people understand about hybrids?

Reinert:   People believe the technology might have a shorter life than gas engines (and that) battery replacement costs are high.

China-EV:  What should automakers do to create demand for alternative fuel vehicles? Is it possible to “create” a market or does it have to emerge organically?

Reinert:   I don’t know why you would want to create demand that would be supposing there is some kind of market out there.   Alternative fuel vehicles are the result of regulatory push.   Manufacturers should create a market for the best fuel economy cars that fit the buyers’ needs.  There is a market for efficient cars.

China-EV:  Must automakers have electric vehicles as part of their portfolio?

Reinert:  Automakers see the need and desire to provide electrification of the powertrain, not the pure electric vehicle. A lot of that is from regulatory push. Start stop will become a bigger part of the mix, five years from now almost all cars will have start stop.

China-EV:  What percentage of light vehicle sales in the U.S. will be alternative fuel vehicles in 2020?

Reinert:  I’m a little pessimistic on compressed natural gas in light duty cars.  It needs tanks that are light weight, have more pressure, etc. I think CNG is going to be problem. There are a wide variety of fuels that come out of natural gas such as methanol, gas to liquid, etc.   By the late 2020’s you might have a substantial number of liquid fuels being made from non-petroleum fuels. Could be hybrid or traditional internal combustion engines.  As internal combustion engines become much more efficient, hybrids and all the other alternative fuels will struggle to compete against ICEs.

China-EV:  What about hybrids and pure electric vehicles?  What is your prediction?

Reinert:  I look at hybrids as 8-10% of the market by 2020,  including advanced start-stop.    Of that maybe 2% may be plug in hybrids. Battery electric cars by 2020 — .5% of the market.   Fuel cells maybe .5% by 2020ish.   I expect fuel cells over time to outsell BEVs but that won’t’ start until the late 20’s.

China-EV:  What about the global market?

Reinert:  It depends on how governments act.

China-EV:  What country will have the largest market in the world for alternative fuel light vehicles in 2020?

Reinert:  That is hard to say. It might be India, it might be China.   The vehicles might be bicycles.   Pure hybrids are probably going to be the domain of Canada and the U.S., as will plug-in hybrid electric vehicles.   Battery electric vehicles (will do well in) managed economies (that do it for political reasons).

China-EV:  You said at the Meeting of the Minds confab in last November that PHEVs didn’t make a lot of sense for consumers. Why is that? It seems PHEVs are being touted as the perfect answer to range anxiety….

Reinert:  If you are going to put a bigger battery in a car than a PHEV is what you want to do.  But the payback could be long.  If you care about the numbers,  then your motivation for buying a PHEV has to be different then motivation for buying a hybrid.

China-EV:  How big a problem will EV battery disposal be for Toyota and other automakers in another 5 years? 10 years?

Reinert:  It absolutely will be a problem.  We know Nickel-Metal Hydride batteries.   We can recycle everything except the battery case economically.  But getting the lithium out of a battery is complex. We are talking more about battery disposal.  We have an internal deal that we want 100% of our car to be recycled in the longer term.  We have experimental factories to show how to recycle the cars, to develop recycling for the cars.  Now you have these batteries (as well).    http://tinyurl.com/79vnwwk   We are looking for solutions. How can we keep them from ending up in landfills?   In lieu of for-profit recycling, it looks like it is a manufacturer or societal burden.

China-EV:  What other EV-specific issues do you see arising down the road?

Reinert:  We can work the expectations on hybrids, but they are overblown on plug-ins and pure electric vehicles.  (There is also) a lot of work to do on reducing auxiliary loads (on the battery), such as heating, cooling, windshields demisting, all that stuff.  Is on a per-mile load, it goes up in heavier traffic.   If you reduce those loads and manage them it is not range anxiety it is range repeatability.   The load on battery makes range unpredictable.

China-EV:  How to reduce auxiliary loads? Lighter-weight materials? Better technology? A Combination?

Reiner:  Work occurs everywhere—it might be better bearings on the air conditioner band, moving heaters, new materials, etc.

China-EV:  Is it worth the investment?

Reinert:  Yes. Most of these improvements spread across board—they also help internal combustion engines. Improved telematics will also help EV drivers.  We also need bigger recharge infrastructure, and need to allow a for-profit charge infrastructure.

China-EV:  What is coming in the future for the electric vehicle?

Reinert:  Electric vehicles will move toward a shorter range, around 100 miles.  Then (the market) will just jump right into fuel cells.   We can get the cost down on a hydrogen fuel cell car.

China-EV:  What does Toyota have in the fuel-cell segment?

Reinert:  We have the FCHV – Adv.  There are about  160 on the road.   Hydrogen infrastructure modeling is being done at UC Irvine; they seeing how that overlaps with electric vehicle infrastructure.  In pure electric cars there will be distributed mass transit—that means share cars, etc. It is not about selling the car, it is about taking out a monthly subscription to use one.

China-EV:  So do you think the lower-cost Mitsubishi “i”, which Mitsu is marketing as a city car, is the future? http://i.mitsubishicars.com/

Reinert:  At Toyota we have the IQ Scion EVs.  http://www.youtube.com/watch?v=vlkT4-1WVkY We are studying how to take them to market in a non-traditional manner.   Urban is the market, urban is a high rise environment. They are coming to market tests.  The model is an extension of work Toyota did in 1999. But then telematics were on desktop computers (and so not convenient).   That is solved now.