A Brief History of Everything Wireless Blog: Toyota vs. the World

Toyota vs. the World

2024-07-02 [Petri]

I’ve been researching the advancements in battery technologies, especially from the aviation perspective, and it has been a fascinating journey: the speed of which we are progressing on this particular field is truly amazing.

This is happening mostly thanks to the ever-expanding market of electric vehicles (EVs), with China in the lead of the mass-market category entries.

Even the very forward-leaning battery capacity vs. price predictions, like the ones made by the the notorious futurist, Tony Seba, have been undercut in terms of the cost per kilowatt-hour. And his initial comments were even laughed at.

Tesla was the trailblazer that showed the World what could be achieved by going all electric, and due to their market positioning, Tesla forced the European luxury manufacturers to speed up their electrification plans considerably.

Now the Chinese are in the middle of a classical step-down approach, as was beautifully described by the late Clayton Christensen during his Harvard Business School lectures. Other Asians and some Europeans are trying their best to keep up.

Apart from Tesla, America seems to be the odd one out, with one of their current presidential candidates being hell-bent to ensure that the USA will be left behind in this incoming inflection point.

But even on the established vehicle market, there’s been one dissonant voice from a very prominent manufacturer which, oddly enough, itself single-handedly pioneered the hybrid cars:

Toyota.

I just can’t wrap my head around their future predictions.

Personally, I have been a Toyota-fan: I have owned a handful of their products, and was always happy to find myself behind the wheel of a Toyota Camry when renting cars around the world.

When you look for reliability, being considered “dull” is of no consequence: those looking for thrills can spend their time waiting for the road-side assistance that eventually will be needed.

I never had a major failure to report on, just normal wear and tear.

Once, I slid into a ditch on a frozen country road and had to call a tow truck to pull me out. The tow truck driver faced a dilemma: he did not know where to attach the tow, as he "had never before needed to tow a Toyota".

As mentioned, what makes Toyota's aversion to electric power train so strange is the fact that Toyota was the true father of the hybrid era.

Toyota's Prius, the early concept prototype of which is in the attached picture, together with their luxury brand Lexus, paved the way to the hybrid explosion that we saw in the past ten years or so.

Personally, already almost 20 years ago, I heard the hilarious story of my colleague beating a Porsche at traffic lights with his heavy Lexus 400h SUV, thanks to the immense torque that its electric motors had at a stationary start.

Hence, after two decades or so, Toyota should be very much up-to-date with electric motors and batteries.

But when it comes to fully electric cars, Toyota has been far from the forefront: instead, they have burned literally billions in hydrogen technology, only to end up selling their remaining Mirai models with deep discounts in the US just lately.

In terms of EVs, Toyota seems to think that despite the fact of electric cars are having far less moving parts, and most of the components having a very long life expectancy, internal combustion engine (ICE) would still be a big thing in 15-20 years from now.

All this despite the continuously more stringent pollution regulations around the world, as cities try to combat the poor air quality caused by the conventional ICE technology.

Personally I could witness this problem in real life while living some 20 km off the center of a major city: during the still winter evenings, with the repeating temperature inversions that occur, it was possible to see the yellowish layer of smog hovering over the city.

So the facts against Toyota's predictions, as I see them, are as follows:

Switching into a hydrogen-based economy is hard, as you have to build a comprehensive distribution network from scratch.

This is extremely costly, and has much stricter safety requirements than the conventional gasoline supply structure: being the smallest of atoms, hydrogen is pretty hard to keep in one place. And mixed with the surrounding oxygen in the air, a huge explosion is just one spark away.

Another huge obstacle is the chicken-and-egg issue of demand and supply. For example, as far as I know, at the time of writing this, there is only one hydrogen charging station in the whole Bay Area, which is not really luring in new users, even if you have the greenest of hearts regarding new tech.

It is so much cheaper to just install a sturdy power cable to feed charging stations in locations that can be nothing more complicated than existing parking lots off shopping centers or whatnot.

No special building permits or security measures are needed, and the World is awash with companies making standard-based chargers.

As for the reported cases of EV fires, with the ongoing shift to Sodium-ion, followed by Solid State batteries, the potential for uncontrollable fires that are possible with current Lithium-ion batteries is becoming a thing of the past.

You can hit a nail into these new cells without any major consequences.

On top of that, you get better temperature and charge/discharge properties, and the prices just keep on falling.

We are already seeing the first sub-10K electric cars entering the market, inducing the ever-so-familiar hockey stick curve of exploding demand. And as always, the larger production runs push prices down even further, while the perceived huge market potential feeds capital to R&D.

It is hard to ignore these facts that clearly work against the traditional Internal Combustion Engine. Replacing it with something that is cheaper and more reliable, has 95% energy effectiveness vs. the 30-40% of ICE, and which produces zero local pollution, just makes sense.

One of the claims against this trend is that for rural cases for example somewhere in Africa, you just can't get the power grid up to the required shape to handle electrification.

But many of those areas are on the sunbelt of the World, and solar panel technology prices have also plummeted by 50% just during the last year alone. Since 2000, the prices have dropped by 90%, and there is seemingly no end for this development.

This is another quiet revolution that is going through its inflection point right now: just today during my morning walk, I noticed how a nearby 20-30 year old hotel was installing solar panels over its entire 400 square meter roof area.

You would not do that kind of upgrade in the highly competitive hospitality industry without having carefully calculated the expected return on investment.

And the exploding demand has been feeding R&D in this area as well: the efficiency of solar cells is improving via new technologies like Perovskites, multi-layer cells and Quantum Dots.

So the question remains: why it looks like Toyota is voluntarily pushing itself into a corner, despite their long history in hybrids? What do they know better than the rest of the World?

At least we do not need to wait for too long to see who eventually ends up being right.

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