Political Insight | Editorials from the Habledash Team

Social Demand Not Enough for Toyota to Launch Second All Electric Vehicle

One thing that the Chevy Volt has certainly done is open the eyes of executives in the automotive world.  The Volt, while a great piece of engineering and innovation, has been a complete and utter failure from a business perspective.  Taking notice of the difficulties, a top Toyota executive announced they were killing plans for a volume launch of their second all-electric car: the eQ.  Citing lack of demand financial concerns, reality has sunk in for the Japanese automaker.

 

This topic has been long discussed on Habledash, particularly because it’s a purchase that some Americans have made based on emotion.  Are hybrids better for the environment?  Yes, but only if they never had to be manufactured and simply appeared out of thin air.

Toyota now hopes to sell only 2,600 electric cars worldwide over the next three years, destroying the hopes of enviro-Nazi’s everywhere.  This is purely a business decision that comes on the heels of General Motors (GM) struggling to make money on their Volt - the vehicle is sold at a considerable loss to the company, thus to the taxpayer.

Here are some details from Forbes:

“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge,” Uchiyamada said.

Uchiyamada thereby concisely captured the three main arguments against EVs: They still have very limited range after development efforts worthy of a moon shot behind that very challenge; they remain extremely pricey, even with massive government tax credits on their purchase; and they take too long to be ready to run.

The forthright Toyota executive didn’t even mention what surely has become an increasingly relevant factor in Toyota’s EV calculations: Even at a time when $4-a-gallon gasoline seems to have settled in for a long run in the U.S. market, the changing mid- and long-term prospects for greater oil production in the United States and elsewhere, combined with huge leaps in fuel economy by internal-combustion engines, mean there’s even less of an imperative for auto companies to field EVs.

Toyota even remains disappointed in consumer acceptance of plug-in hybrids like its own Plug-In Prius and the original, GM’s Chevrolet Volt. “We believe that there is social demand for the plug-in hybrid,” Uchiyamada said. “But our efforts to let the customers know what it is have not been enough.”

On cue, Toyota also has just begun a new advertising campaign for its four-member Prius family of hybrids in the United States, showing them traversing a Candyland-like landscape and emphasizing that there’s a right Prius for everyone.

And, by implication, a right EV for just about no one.

Social demand does not translate into consumer demand.  Consumers do not want to pay $40,000 for a vehicle that’s as high maintenance as a hot girlfriend.  They have to be charged; a charging station typically has to be installed; there are fewer creature comforts.  Screw social demand - that’s no different that the Occupy Wall Street murdering rapists, which, if it had become reality, America would be an anarchy. 

Consumer demand trumps everything else and the opportunity ends up costing automakers more than they make on the segment.  Demand cannot be dictated.  The Chevy Volt is a perfect example of a government trying to dictate demand.  Toyota at least has the sense to understand that opportunity ends up becoming a financial burden in this instance. 

Electric cars are not the solution, yet so many Americans seem to think that the energy used by these vehicles comes out of thin air.

Chuck Justice is the editor-in-chief for Habledash.

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