Someone at Toyota told The Nikkei [sub] today that the company “received about 120,000 orders for its new Aqua compact hybrid between its Dec. 26 release and Jan. 31, 10 times the monthly sales target of 12,000 vehicles.” Toyota markets the car as the Aqua in Japan. In the U.S. and other markets, it will be called Prius C.

These orders go on an already big pile. When the car was formally launched on December 26 in Tokyo, Toyota “had received orders for 60,000 Aqua hybrid cars ahead of its launch,” says the Wall Street Journal. At that time, the waiting period for the car after an order was placed was said to be four months.

The onslaught of orders puts Toyota in a quandary. Not only have they planned for 12,000 units a month.These plans are also hard to, well, change. As Prius C Project Manager, Masahiko Yanagihara, had patiently explained to this reporter, the Aqua/Prius C is being built in the Iwate plant of subsidiary Kanto Auto Works in Kanegasaki. This plant has a maximum capacity of 30,000 units a month, if Toyota pulls out all the stops and works overtime. However, the plant also makes “other cars, such as the Ractis, Belta, Blade etc.” Until Toyota finds ways to expand its production capacity, the car will remain in short supply.

This shortage will only be exacerbated when the car is launched worldwide this year, while production remains back in Japan. Dubbed as “the world’s most fuel efficient hybrid car,” the Prius C is slated for sale in 50 countries, including the U.S. In Europe, Toyota will release a new small hybrid based on the Yaris compact. It will use the same hybrid system as the Aqua. Timing for the overseas launch has not been released. In the U.S., the Prius C is said to have a starting price of around $19,000. A look at gasoline prices and world news says that an affordable 53 mpg (EPA, city) car could not have come at a better time. If there would not be that bottleneck called Iwate. And the Yen.

Toyota has been hesitant in establishing hybrid production outside of Japan. The numbers seem to back this up. The Prius is Japan’s best selling car. This year, the title could go to the Aqua/Prius C. Outside of Japan, hybrids are still a niche play. The market share of hybrids in the U.S. was 2.11 percent in 2011, down from 2.78 percent in 2009. The Prius C is the little car that could change that.

A Chevrolet Volt owner in Ottawa, Ontario has been blocked by his condominium board from charging his Chevrolet Volt – even though he has offered to reimburse the board for the $1 (approximately) in electricity it takes to charge the Volt at local rates.

Mike Nemat, who bought a Volt a couple months back, lives in a high-rise condominium building where tenants collectively share the cost of things like electricity bills. Nemat has an electrical outlet near his parking spot, originally intended for an engine block heater, that he’s been using to charge his Volt.

Under the condo’s rules, Nemat is allowed to use a block heater, which consumes almost as much electricity as a Volt. But if Nemat wants to use his outlet for charging purposes, the board says he must install a separate electrical meter, at a cost of $3,000. The board claims that they do not subsidize the fueling of other vehicles, and therefore shouldn’t be paying for electricity for the Volt – Nemat offered to reimburse the board for any electricity used, but the board still declined (though without a meter, a precise figure couldn’t be determined), and will disable that particular outlet.

One of Nemat’s neighbors had a pragmatic take on it, suggesting that someone using a toaster or leaving the lights on all night is just as much of a drain on electricity as Nemat’s Volt. Increasing numbers of Canadians in urban areas live in these buildings, and some are friendlier than others – one Toronto condo even hosts Tesla Toronto’s vehicles and allows them use of a 240V charging station. Nemat and his Volt are likely the tip of the iceberg with respect to this issue – as plug-in vehicles and higher density housing take root (and really, a downtown condo owner is the kind of person that a Nissan Leaf is perfectly suited for), there will be increased demand for charging stations.

Disclaimer: The above photo is not Nemat’s Volt. I tested a Volt for a week in December, and parked it at a public garage which has a 240V EV charging station. One day, a Durango took my spot, and so I parked it next to a standard 110V outlet and used the factory trickle charger. I came back to find the unit unplugged, thus ruining my 4-day streak of not using a single drop of gasoline. In typical Canadian fashion, the cord was neatly drapped across the side-mirror, the charge port door had been closed and the trickle charger unit placed off to the side and out of harm’s way. I can only assume it was done by a security guard who thought I was “stealing electricity” from the garage.

Obama! Socialism! Taxes! Jesus! Faith! Guns! Now that you’re paying attention, it’s time for our regularly scheduled programming. A Detroit News article claims that NHTSA is denying any interference on the part of the White House with respect to the Chevrolet Volt fires that resulted from government crash test procedures.

News of the fires only came to light in November, despite the fires occurring in June. NHTSA head David Strickland claims that the White House wasn’t informed until September. A letter sent to three Republican congressmen states that

“shortly thereafter informed the Executive Office of the President regarding the June fire and NHTSA’s test plans to determine if the fire indicated that there is a risk of post-crash fires in Chevrolet Volts. No one from the Executive Office of the President requested or in any way suggested that NHTSA delay public release of information related to the Volt fire,” 

GM previously announced a fix for the Volt’s battery pack and leaky coolant, which is said to have caused the fires. GM has yet to restart production of the Volt since the line went idle in December, and won’t be able to apply the new safety measures to the Volt until some time in February of this year.

Wamp wamp! That’s the sound of the sad trombone playing for the Chevrolet Volt, which missed its 2011 sales target by 2,329 units. General Motors hoped that the Volt would sell 10,000 units in 2011, but it was not to be.

Bloomberg reports that the bow tie brand sold only 7,671 Volts in 2011, but has plants to increase annual production to 60,000 units annually. 45,000 of those will be sold in the United States. The Volt had only been on sale nationwide for the final three months of 2011.

Adding insult to injury is the fact that the Nissan Leaf  had sold 8,720 units through November, compared to 6,142 Volts (according to data from Automotive News). Despite being hyped up as an electric car devoid of range anxiety, consumers evidently didn’t care, opting for the little Nissan instead.

While the Volt was helped by GM authorizing the sale of 2,300 demonstrator units in November, the Leaf, unlike the Volt, has still not been launched in all 50 states, instead remaining on sale solely in the coastal regions and the Chicago metropolitan area. It’s still to early to tell how the NHTSA investigation into the Volt’s battery-related fires has impacted sales, as our data only extends to the month of November, and the NHTSA announcement came on November 25th.

There was ample hand-wringing when Volvo announced the death of their iconic station wagon in North America. While enthusiasts mourned the death of a cult classic, Volvo also announced a plug-in hybrid version of their V60 wagon, powered by a diesel engine and a hybrid drivetrain. Naturally, this vehicle was not destined for sale in North America.

The non-available V60 plug-in constituted the ultimate slap in the face for the Volvo faithful. Here was the newest generation of Volvo wagon (as opposed to the warmed over XC70 offered recently) with an environmental bent and the Euro-cachet of a diesel engine – but where was it? As Jamie Kitman of Automobile magazine rightfully pointed out, their core buyer is “green” but refusing to import such a vehicle may not be “lunacy”, because the Swedes have something more suited for American tastes – the same hybrid goodness, packaged as a gasoline-powered crossover.

Rather than the V60 diesel-hybrid, North Americans are being treated to a plug-in hybrid based on the XC60. Set to be unveiled at the North American International Auto Show next week, the XC60 plug-in will use a 280 horsepower 4-cylinder gasoline engine and a 70 horsepower electric motor for a total output of 350 horsepower. The gasoline engine will drive the front wheels, while the electric motor will power the rear wheels. Volvo claims that the vehicle can be driven in electric mode for up to 35 miles and return up to 50 mpg. Stefan Jacoby, Volvo’s CEO, noted that the gasoline powered version will be an important car for China and Russia as well as the United States, as this likely has as much to do with the crossover body style as it does the gasoline engine.

On a personal note, my folks bought an XC60 T6 this summer, and I have spent ample time in it. While perpetually ignored in the marketplace, the XC60 is a car I’m fond of, with a powerful engine, a well-appointed cabin and good driving dynamics. At the time of purchase, I urged my parents to look at the XC70 T6, but it cost a few thousand dollars more and offered little appreciable difference to them. If a couple of upper-middle class car enthusiasts saw little value in opting for a wagon over a crossover, then what chance would a station wagon have with more conventional buyers, who are likely to be even more image-conscious and resistant to the idea of a wagon? On the other hand, my parents have a 5.4 mile commute through a downtown core to their office, and something like this would be right up their alley. Hopefully pricing won’t be so exorbitant that it cancels out any economic benefit for buying the XC60 plug-in.

The Volt’s battery woes are having an effect on its European sibling. Automotive News [sub] reports that Opel/Vauxhall will delay delivery of the Volt’s sister-model Ampera, while investigations by U.S. authorities into battery fires following government crash tests of the Volt continue. An Opel spokesman told AN:

”We are not currently delivering the cars to customers while we set up the process to deal with these highly charged batteries to make sure they are safe.”

Opel had already started deliveries of the Ampera to dealerships in Germany, France, Switzerland, Belgium and Holland for y year-end launch. European sales of the Volt were officially kicked-off last week as two Amperas were delivered to the U.S. embassy in Paris.

Built with the Volt at GM’s Hamtramck plant near Detroit, the Ampera shares the Volt’s technology including the lithium-ion batteries. The styling is slightly different.

Meanwhile, even battery suppliers deem it necessary to keep a tweeting distance.

The National Legal and Policy Center (NLPC) filed a Freedom of Information Act request with the National Highway Traffic Safety Administration (NHTSA), seeking:

“All records, documents, internal and external documentations between the National Highway Traffic Safety Administration and General Motors between June 1, 2009 and December 1, 2011. These requested records shall include communication regarding the Chevrolet Volt, also known as the Chevy Volt.”

That’s a lot of paper if the request will be granted.

The NHTSA is investigating three fires in the battery packs of GM’s Chevy Volt following collision tests. The NLPC alleges that the NHTSA “may have withheld information of this potential safety problem from the public for several months.”

Says a NLPC statement:

“The United States government still owns a significant stake in GM. There’s an obvious conflict of interest in a government agency investigating a government-owned company. Moreover, the NHTSA cannot be impartial because it has become a cheerleader for electric vehicles.”

According to its website, the “NLPC promotes ethics in public life through research, investigation, education and legal action.”

GM is close to having a fix for the Volt battery that had a tendency to go up in flames after a crash. Meanwhile in Washington, senators are getting the grill ready.

Reuter’s Detroit bureau reports that repairs under consideration involve laminating circuitry in the battery pack, a reinforced case for the battery, and leakproofing the coolant system.

The good part is that the fix could be performed at GM dealerships, which, says Reuters, “could spare the automaker the cost and reputation damage from a more involved safety recall.” In other words, GM would not have to take the car back. Currently, Volt customers drive around with loaners while their Volts remain parked.

Reuters heard the solution before GM senior management did. Management will be shown the fix by the end of the week. The cost is said to be less than $9 million for GM, or about $1,000 per Volt. If NHTSA regulators want a more involved solution, it will be more expensive.

GM spokesman Rob Peterson had not heard of the fix: “To the best of my knowledge, we’re not discussing exact solutions at this point,” he told Reuters.

While GM is dousing the flames, DC is preparing a grilling.

The regulatory subcommittee of the House Oversight panel wants to hold a hearing next month. It wants to know why it took nearly six months for the matter to become public and whether the committee should have been advised. The National Highway Traffic Safety Administration opened a probe of the Volt’s battery pack last month.

In the comments section of yesterday’s post on the ongoing Chevy Volt fire investigation, I noted that GM might

retrofit Volts with crash protection that can maintain battery integrity in all crash conditions… Mary Barra has said that GM is

“continuing to work with NHTSA to investigate additional actions to reduce or eliminate the potential of a post-crash electrical fire.”

I think some kind of update on the battery integrity front is inevitable, but we shall see…

Sure enough, today Reuters is running an interview with GM CEO Dan Akerson, who says that European deliveries of Opel-branded Volts (called Ampera) would be delayed pending NHTSA’s investigation, and that maybe, just possibly, the Volt’s battery might have to be redesigned. Says Akerson:

We want to assure the safety of our customers, of our buyers, and so we’re just going to take a time out, if you will, in terms of redesigning the battery possibly

Unfortunately, Akerson’s mangled syntax makes it tough to know if GM is really going to redesign the Volt’s battery, or what the “time out” in question means. He does tell the AP [via The WSJ [sub]] that a recall or buyback are options as well. Though redesigning the Volt’s battery could be expensive and devastating for sales, GM’s current post-crash safety protocol is incredibly human resources-intensive, and likely very costly as well. And the fact that GM is even considering redesigning the Volt for safety a year after its release is going to create a huge sales and marketing challenge anyway. Volt production edged down by 199 units in November, and now GM’s sales boss Don Johnson tells the Detroit News that the Volt will miss its 10,000 unit 2011 sales goal. At this point, GM may just want to take a mulligan on the Volt’s first year, redesign the battery, and relaunch the thing.

TTAC has received the following protocol, developed by GM in the wake of the June Volt fire at a NHTSA facility in Wisconsin, from a GM source and has confirmed its legitimacy with a second GM source. Though the procedure may be refined based on the findings of NHTSA’s latest round of tests, it gives a good picture of what GM currently does to ensure the safety of Volt driver and passengers as well as rescue workers, towing company workers and salvage yards. And, I have to say, it puts some of my fears about this safety scare to rest. It hadn’t occurred to me that GM’s Onstar system could provide opportunities to respond to crashes in real time, and apparently the system provides a wide variety of data with which GM’s “corporate SWAT team” can tailor its response to any Volt crash event. Hit the jump for the full procedure.

• Chevy Volt sends Onstar message of just occurred crash event.
• Onstar team notified of Volt crash and immediately implements standard crash protocol to assist vehicle operator
• Onstar immediately pulls key crash criteria from crash notification, i.e. vehicle speed, vehicles conditions (rollover), etc
• Onstar team notifies Volt Battery Team Leader of crash event including key vehicle conditions
• Volt Battery team leader works with Onstar to ping Volt and check additional data if appropriate (higher severity crash events, battery data, etc)
• Volt Battery team Leader determines if high crash severity standards met for depowering or if there is any question about battery severity level.  If yes to either, Battery team representative is sent to crash site
• Volt Battery team works with Volt advisor to contact Vehicle Owner and/or determine vehicle location
• Volt Battery representative obtains approval from owner and then proceeds to investigate the crashed Volt and depowers battery if deemed necessary
• Post Crash Volt stable and ready for disposition

Toyota capitalized on the pre-Tokyo Motor Show buzz and presented its plug-in hybrid Prius PHV to the press. The car is not quite ready for launch, it will be launched in Japan on January 30, 2012. However, dealers accept orders as of today. The venue of the press conference was carefully chosen: The National Museum of Emerging Science and Innovation.

Toyota sees this car as the “mainstay next-generation eco-vehicle following the EV.”

In carefully chosen words, Toyota managers pooh-poohed the pure plug-in. They pushed the usual buttons, namely range anxiety or time to charge. They subtly dissed the pure plug-in by saying that green vehicles are only good for the environment if they are widely used.

The EV cruising range is not far: 26.4 km, or 16.4 miles. After that, the Prius PHV will switch seamlessly into hybrid mode, using the familiar 1.8 liter series hybrid technology. Why such a short EV range? It is a careful balancing act of weight, space, and price.  A big battery adds heft and hefty cost. The Prius PHV is only 50 kg (110 lbs) heavier than the regular Prius. Its lithium-ion battery is small enough to not take away trunk space.  Trunk is the same size as that of the Prius. 16 miles is enough to get to the store and back or to roll out of town without polluting the air.

A lot more has been said today. A lot of it is already known to TTAC readers via our interviews with Chief Engineer Satoshi Ogiso.  Because there was so much, we make the whole press conference available to you via video as if you’ve been there yourself.

Toyota plans to sell 60,000 Prius PHV a year around the world. 35,000 to 40,000 are scheduled for Japan, the rest for the rest of the world. The car should arrive in the U.S. in Spring at a starting price of $32,000. People in Europe will have to shell out €37,000.

Leave it to Reuters to say why GM should be worried:

“General Motors Co is also looking to win over environmentally conscious consumers with its Volt plug-in hybrid, although its price tag of $41,000 is considered prohibitive.

The Volt also hit a snag recently, with U.S. regulators deciding last week to investigate the safety of the car after its battery pack caught fire in crash tests.

The Volt uses “range extender” technology to generate electricity on-board with the gasoline engine and carries 180 kg (400 lbs) of batteries.”

NHTSA has has opened a formal defect investigation into the Chevrolet Volt, on the grounds that

 Intrusion in a crash may damage the battery, which may result in a substantial thermal reaction and fire

We knew that NHTSA was already looking in to this type of defect after an earlier test incident, but the official investigation resume [PDF] lists three separate thermal events that have occurred as a result of NHTSA tests. Hit the jump for the official explanation of this sequence of events.

On May 12, 2011, NHTSA performed a NCAP side pole impact test, followed by a post impact rollover test on a Chevrolet Volt. In connection with that testing, NHTSA has identified the potential for intrusion damage to the battery
which may result in a substantial thermal reaction and fire. Twenty-one days after the May 12, 2011 testing, delayed thermal heating and pressure release resulted in a fire that consumed the Chevrolet Volt and three other vehicles in close proximity at the test facility.

During the week of November 14, 2011, NHTSA performed follow-up battery-level tests to simulate the incident. NHTSA performed three tests simulating the mechanical damage to a battery pack observed from the first incident. Two of the three tests produced thermal events, including fire. Because of these test results, NHTSA has opened this investigation to examine the potential risks involved from intrusion damage to the battery in the Chevrolet Volt, in coordination with the agency’s ongoing review of the emerging technology involved in electric vehicle

A more extensive NHTSA press release notes

NHTSA is not aware of any roadway crashes that have resulted in battery-related fires in Chevy Volts or other vehicles powered by lithium-ion batteries. However, the agency is concerned that damage to the Volt’s batteries as part of three tests that are explicitly designed to replicate real-world crash scenarios have resulted in fire. NHTSA is therefore opening a safety defect investigation of Chevy Volts, which could experience a battery-related fire following a crash. Chevy Volt owners whose vehicles have not been in a serious crash do not have reason for concern.

GM’s response [via Phil Lebeau/Twitter]:

The Volt is safe & doesn’t present undue risk as part of normal operation, right after a severe crash.

This is the defense that GM has been using throughout this NHTSA/Volt fire investigation, and to some extent it bears a lot of similarity to Toyota’s defense against the test results trumpeted by Professor David Gilbert. The argument is that the investigator is creating defects through conditions that would not exist in normal use. The problem with GM’s position is that the safety protocols it wants NHTSA to follow in order to not prevent these kinds of fires apparently haven’t been circulated. As GM’s spokesman put it last week

We had a process [for draining the battery] internally but I don’t believe it was shared with anyone. The incident with NHTSA raised awareness that we had to develop a procedure and alert all stakeholders.

And based on the fact that NHTSA’s press release on this defect investigation lists the agency’s tips for post-crash safety procedures for plug-in vehicles, it seems that this is its major concern. What’s strange is that GM made quite the fuss about its Volt first responder training (see video at top) when the car was launched. That this issue, and the necessary safety protocol response to it, seemed to slip through the cracks when that program was developed is not encouraging.

Everyone knows TTAC hearts data, so this little NPR/Edmunds collaboration, which maps hybrid and EV sales by locality, is right up our HOV lane.

Volkswagen had painted a bulls-eye on Toyota and wanted to beat the Japanese by 2018. At least in terms of production numbers, Volkswagen will have Toyota beat this year. Instead, VW has to contend with GM.

The long-term new energy strategy of Volkswagen and Toyota on the other hand could have been devised in a joint planning session. Volkswagen believes that near-term, the plug-in-hybrid has a great future, whereas Volkswagen’s CEO Martin Winterkorn won’t live long enough to witness the boom of the pure electric car.

The German newspaper Handelsblatt has an interview today with Winterkorn. It echoes in large parts the interview which I had ten days ago with Toyota’s Chief Engineer Satoshi Ogiso. The two sound amazingly similar: Bullish on plug-in hybrids. Cautious on EVs.

Winterkorn on EVs:

“I cannot imagine that the whole fleet will run on pure electric power in the foreseeable future. A current technology lithium-ion battery weighs 250 kilograms, and in the best case, it will take you 150 kilometers down the road. Maybe this can be optimized a little, but I expect significant progress only from the next generation of batteries. From our current perspective, this could be based on lithium-sulfur. This battery could be good for 300 kilometers.

A decisive technology leap could be lithium-oxygen batteries. This is a topic that still needs a lot of research. With this technology, a car could have a pure electric range of 450 to 600 km. That would be the breakthrough.

But I don’t expect it before 2030. It won’t happen in my life – at least not in my life as CEO of Volkswagen.”

Winterkorn on plug-in-hybrids:

„The bridge to the future will be the plug-in-hybrids. You can charge their battery from a wall socket. You can drive 50 or 6o kilometers on electric power, then, an efficient internal combustion engine powers the car. Right now a gasoline engine, at some point in time a diesel.

That way, the battery can be down to two thirds of both the weight and the price of a pure EV. Don’t forget, the battery of a pure EV alone costs €8,000 to €10,000. Together with Bosch, we want to reduce the price of the battery to € 5.000, but that is still a lot of money. A battery for plug-in-hybrids runs us only €3,000 today.”

Interesting: Winterkorn didn’t mention hydrogen at all. Volkswagen used to be gung-ho on hydrogen.

Back on Friday, Toyota’s Chief Engineer Satoshi Ogiso and TTAC talked about the past of the Prius, and the future of the automobile. Back to the here and now: We also talked about a car that has been a (badly kept) secret until today: A compact hybrid that suddenly makes former miser-meisters (such as the Honda Insight or the Mazda2) look like gas guzzlers. It is the Toyota Aqua, probably called Prius C when and if it lands on other shores.

With an unheard-of fuel efficiency of 35 km/L (82.3 mpg) as measured under the new Japanese JC08 test cycle, or 40 km/L (94 mpg) when measured in the 10-15 cycle, the car is 30 percent better than its segment competitors.

• Honda’s new compact Insight hybrid delivers 27.2 km/L (64 mpg) as measured under the JC08 test cycle and 31 km/L (72.9 mpg) as when measured in the 10-15 cycle.
• Mazda’s new Demio, better known as the Mazda2 stateside, wrings 25 km/L (JC08, 58.8 mpg) or 30km/L (10-15, 70.5 mpg) out of a conventional engine using Mazda’s Skyactiv technology.

These numbers are definitely non-EPA. Ogiso wouldn’t even hazard a guess for the EPA number.

Ogiso worked his team hard to get to these numbers:

“Usually, people look at the competition and want to be a few percent better. I set the Aqua target at 40 kilometers per liter. That is 30 percent better than the competition. Everybody said: How can you set that target so high? Why is that number needed? If the competition is at 30 kilometers, aren’t 35 good enough?”

Not for Ogiso and not for Toyota, which is finding its old fighting spirit after the many setbacks it had to endure. Not only is the car a super-saver at the pump, it also will be priced “affordably” when it will be launched in Japan in late December 2011. The exact price remains under wraps, and may not even be announced at the Tokyo Motor Show. The Nikkei [sub] had figured it will cost $4,000 less than the Prius.

Remember when Ogiso thought back to the bad old pre-Prius days?

“At the time, the battery, motor, controller, these components were all huge and heavy. I drew a compact car, 4 meters or so long, with enough interior for 4 passengers. The rest of the space was very tiny, and I had to stuff these huge components somewhere.“

With the Aqua, he had to repeat that feat again.

“Cost, size, and weight is greatly reduced from the original Prius.”

Prius hybrid technology had to be further miniaturized to fit into a car that is 157.3 inches long (Prius: 175.6) and has a slightly shorter 100 inch wheelbase (Prius: 106.3).

Ogiso thinks this car will send other makers back to their CAD stations:

“The Prius is the game changer in the midsize class. The Aqua will be the game changer in the compact class in Japan.”

Just in Japan? What about the rest of the world? Ogiso cites “currency and production issues” that might delay the arrival of a Prius C on other shores. A Prius C  is tied to where Prius hybrids are made, and that’s Japan, Thailand and soon China. The expensive parts, the power trains come solely from Japan. The high yen doesn’t make Japanese exports low cost. That’s one thing Ogiso can’t engineer.

On average, 31 highway vehicle fires were reported per hour. These fires killed one person a day.

Of course, if we’re talking about 200k fires (roughly) in 2008, a year in which there were 256 million registered vehicles (roughly) on the road, we’re still talking about less than one tenth of one percent of all vehicles on the road bursting into flame (.078%). On the other hand, with just over 10,000 Volts built and some 5,000 delivered, three fires could be either relatively insignificant (.03%) or comparable to the rest of the cars on the road (.06%), depending on whether you base it on production or deliveries. And because vehicles must be delivered before they can be used in normal circumstances, it seems that thus far the Volt is delivering a slightly lower percentage of fire incidents than the general vehicle population… which is estimated to be over 9 years old on average (whereas Volts are all a year old or less). So, while the evidence suggests that EVs as a class are just as fire-safe as any other car, the Volt still seems to be something of a statistical question mark.

Yesterday, we met Toyota Chief Engineer Satoshi Ogiso in his office in Toyota City. He is responsible for all new technology at Toyota. Yesterday, we talked mostly about the past. Now, we talk about the future.

When I ask Ogiso what car we will be driving in the future, he whips out a chart. It’s a chart which I call “Peak Oil 2.0.”

It’s not that oil wells will suddenly go dry. Level headed people expect oil to flow unabated well into the future. The problem is vehicle growth. In the saturated established markets, vehicle growth is expected to be largely stagnant. It’s the exponential growth in emerging markets that will open a gap between oil supply and oil demand – if all those cars run on petroleum-based fuel. That gap is what keeps Satoshi Ogiso awake at night – and he usually sleeps only 5 hours anyway.

There are many versions of this chart. The one used by Toyota says that we have been living with a small gap since 2005. Experts generally agree that the gap will become a serious problem in the 2015-2020 time-frame. In the world of an auto engineer, 2015 is today. With a lead time to 3 to 5 years, auto manufacturers around the world better have their act together now and answers to how that gap will be filled.

Satoshi Ogiso has the answer, and many will not want to hear it:

“To control this gap, we must go multi track. We must improve gasoline and diesel engines. We must increase the number of hybrid models. We must produce the plug-in hybrid. We must develop city commuter electric vehicles. We already started small production of fuel cell vehicles.  We must do all these improvements at the same time.”

This translates into huge R&D costs which will be beyond the capabilities of many carmakers. The first victims of Peak Oil 2.0 will be small carmakers who cannot keep up with the expense of a multitrack research program at breakneck speed with only small returns in the foreseeable future.

How will this gap be filled? Ogiso puts another chart on the table. Mind you, this is not how all of future fuel will be divvied up. This is only how the 15 or so extra million barrels of oil will be made up for when the gap has opened its hungry mouth by 2030.

According to Ogiso and his team of experts, compressed Natural Gas or CNG will grow in importance. Ogiso sees a “big future in CNG.” Liquid fuels will be with us long into the future. Gasoline will be around for a long time. Increasing amounts of these liquid fuels will not be made from oil.

All of these fuels will drive some kind of internal combustion engine, either directly mounted to the transmission, or in hybrid fashion.

The pressure to improve efficiency, combined with the maturing technology will push the equilibrium more and more in the direction of the hybrid. Asked what kind of a car I will own in 2020, Ogiso says:

“In 2020, hybrid will be mainstream. If  you can have two cars, then by 2020, you will likely have one tiny city commuter car that is pure electric. Your regular car will be a hybrid.

The pure hybrid will be the majority, next volume down will be the plug-in hybrid. Plug-ins can use pure electricity without people worrying about the range. Eventually, city commuter EVs will become popular. And of course, the conventional car will still remain on the market – especially in the developing countries, but even in Japan.”

Efficiency improvements of traditional gasoline engines may soon hit a wall, Ogiso figures. He gives the gasoline engine an improvement potential of “maybe 10 to 20 percent.”  For modern diesel engines, he sees very little room for improvement.

Listening to Ogiso and looking at his charts, it quickly becomes evident that he does not believe in the wholesale electrification of the automobile anytime soon. When he says “EV”, he always adds “city commuter” to it. This is a small niche market, especially when city commuters are supposed to commute via public transport. It is also interesting to note that on his chart, electricity does not play a serious role until 2020. Even then, the electricity may not come out of a battery. It may come out of a gas tank. Filled with hydrogen.

Yes, hydrogen.

For Ogiso, a hydrogen-powered car is like an EV, but without the weight, slow charge time and range anxiety of the battery. He sees a range of 700 km (434 miles) for a hydrogen-powered car that can be refueled in minutes.

But isn’t hydrogen fraught with technological problems? Ogiso does not think so:

“Toyota’s views are a little different. We continued the development of fuel cells. Sure, there were a lot of problems, especially with cold conditions drivability. But at this moment, we have almost cleared all technical issues.”

But aren’t hydrogen atoms so small that they escape any vessel in no time? Isn’t hydrogen so corrosive that it will eat tanks for breakfast? Ogiso looks at me as if I am from Mars.

“No, I don’t think so. We already have 150 hydrogen fuel cell units in the field in Japan, in the U.S. and in Europe, for more than one year, without serious problems. We have not had a car where the gas had escaped in the morning.”

Actually, the only real problem Ogiso is facing with hydrogen fuel cell vehicles is money:

“For us, the only remaining real issue that stands in the way of fuel cell electric vehicles is mass production cost.”

In a way, Toyota is with fuel cells where they were with hybrids in 1995: Big, bulky, heavy and expensive. Just much more expensive than hybrids.

Toyota is working hard on shrinking the size and the cost of the fuel cell stack. Expensive materials such as platinum have been replaced with cheaper ones. Last year, a commercial hydrogen-powered Toyota would have cost $100,000 . A few days ago, Toyota’s EU VP for planning, Alain Uyttenhoven said it could be €100,000.

When I ask Ogiso how much that car would cost in 2015, he squirms  and says that there are estimates, but those are not for public consumption.

When I ask him whether a hydrogen powered car would be an affordable option by 2020, then his worried look morphs into all smiles, and he says with conviction.

“Yes. This is my job.”

Now, you ask, and I ask as well: Where will all that energy come from? Another chart lands on the table. I call it the Tokyo Subway Map of New Energy.

This chart shows gasoline and diesel at a clear disadvantage: Both come from only one source, from oil wells. Biofuel is similarly hampered.  Electricity and oddly enough hydrogen can be made from a multitude of sources.  That is all fine and good. But what about the infrastructure? Ogiso is not concerned:

“I am not worried about the infrastructure. There is a lot of hydrogen available. Once we have cost effective hydrogen cars, the infrastructure will follow.”

What also will follow is Part 3 tomorrow, in which Satoshi Ogiso will spring a surprise on you, and where he will demonstrate that bringing down weight, bulk, and cost of new energy vehicles is no longer a thing of the distant future.

“Look, when we started the Prius project in 1993, we did not even think of a hybrid system for the Prius. We did not set out to build a hybrid. We studied what was needed for the 21^st century, and two things were certain: The need to protect the environment, and the need to bring consumption down. That’s all we knew, and you did not need to be a clairvoyant to know it.”

The man who told me this last Friday better become clairvoyant. On Satoshi Ogiso’s shoulders rests the future of Toyota. Ogiso is responsible for all new technology at Toyota. As Chief Engineer, he is in charge of the Prius and its many siblings, he is responsible for plug-in hybrids, EVs, fuel cell hybrid vehicles, anything apart from the aging internal combustion engine is his.

I meet Ogiso at the world headquarters of the (still, officially) world’s largest automaker in Toyota City. It took me 1 ½ hours to get from Tokyo to Nagoya by Shinkansen, and then about as long again to get to Toyota-shi by subway. Three hours well spent to find out what the future will bring .

I like to talk to engineers about future cars. The answers usually are down to earth, and devoid of marketing hype. In the 80’s, I talked to an engineer at Volkswagen who told me that he was working on the car for the 21^st century. I immediately demanded answers. “Well, it will have four tires, a steering wheel, and it will run on gasoline,” was the answer. The man was right.

The Toyota HQ is a 15 floor office building that would look subdued in the suburbs of Cincinnati. A Renaissance Center towers over a city in ruins. A Toyota HQ is hidden between small houses and factory buildings, and is easily missed unless you know where it is. A lone Camry stands in the lobby. The security is likewise unassuming: Three of the usually polite and smiling ladies behind a wooden desk. No ID check, no “Guest” clip, a smiling lady says “dozo”, and there I am, face to face with Toyota’s future.

Satoshi Ogiso doesn’t look the big 50 which he had reached in January. His trademark hairdo is a bit less spiky than usual. He wears a tie. The days of super cool biz at Toyota are over.

Ogiso had worked at Toyota for ten years before he joined what became the Prius team in 1993. He was a suspension man. He worked his way up the ladder by designing chassis parts for the Tercel and the Camry.

In fall of 1993, Toyota created G21, a committee to research cars for the 21st century. The “G” stood for “global”, the “21″ for the 21st century. 32 year old Ogiso joined the group as one of the men of the first hour. He is the longest serving Prius team member.

In spring of 1994 the work started in earnest under Chief Engineer Takeshi Uchiyamada. Ogiso remembers:

“Environment and consumption. These were our sole engineering parameters. Otherwise, a blank sheet. We studied this for more than a year, until February 1995.

This is when we learned that the hybrid system is essential for the future of the automobile. At the end of the study, we were convinced: We need a hybrid system, even if it is difficult.”

It was a gutsy decision. Hybrid technology is nearly as old as the car. Other companies were pulling their hairs out over the technology when Toyota picked it as the system for the new millennium. Audi produced three generations of its Audi Duo concept before the Audi A4 Duo made it into production in 1997. It was a spectacular failure: Only 60 were built. Engineers and journalists questioned the sanity of someone who wanted to save gas by adding extra weight and cost in form of heavy batteries, electric motors, and controllers.

Ogiso smiles when he thinks back:

“At the time, the battery, motor, controller, these components were all huge and heavy. I drew a compact car, 4 meters or so long, with enough interior for 4 passengers. The rest of the space was very tiny, and I had to stuff these huge components somewhere. We had to miniaturize these components. When we showed the drawings around, every engineer, every division, every component supplier said:

Sure, this will be possible – give us 10 years.”

The team did not have that time. In the contrary. The Prius became Toyota’s equivalent to putting a man on the moon. But not by the end of the decade. Says Ogiso:

“In the middle of 1995, we decided to use the hybrid system. Then it was decided to have a market launch 1997, only 2 and a half years later.”

When the Prius arrived, the market was skeptical. The price was high. When the Prius came to the US officially in the year 2000, a gallon of gas did cost $1.50. Officially, Toyota broke even on the car. For Ogiso, turbulent times began, which propelled him in 2005 to the top spot as the Chief Engineer of the Prius.

“Many customers recognized the first generation Prius as a very innovative car, but honestly speaking, the volume of the first generation Prius was not so good. It was beyond our expectations, but we sold maybe 1000 units per month or so.

The customers were a big inspiration for us when we started developing the second and third generation of the Prius. Now the Prius is the best selling car in Japan, and it is also very well sold in the United States.”

In March 2011, Toyota had sold more than 3 million hybrids worldwide, the bulk of them the Prius.

However, the success of the Hybrid remains a Japanese and American phenomenon. In Europe, hybrids are a rarity, when Europeans want to save gas, they drive a diesel. In the emerging markets, hybrids are a dud. According to lore, only one Prius was sold in China in all of 2010.

As it is often the case, the lore was misinformed: Toyota had sold a total of 60 imported Prii in China in 2010. Toyota elected to stop selling the Prius to the Chinese until production of the 3rd generation Prius starts in China early next year.

Ogiso believes that wholesale adoption of hybrid technology around the world is  only a matter of time:

“Generally speaking, the environment and the energy resource situation will get increasingly worse in the future. Other markets will wake up to it. The timing is different. Japan was first, U.S. second. By 2020 to 2025, hybrid systems will be mainstream even in Europe and in the emerging markets.”

Now is the time to ask the question that had brought me here. What car will I be driving in 2020? Will I put gas in it? Will I plug it in? Or will I have to take the train? More on that tomorrow in Part two.

The Tokyo Auto Show is coming, which means it’s time for Japan’s automakers to roll out their weirdest, quirkiest, most Japanese designs. An electric city car apparently inspired by a CD player? Check. A 1,600 lb, super-efficient compact? Actually, the Regina Concept (above) almost looks more French than Japanese to my eyes. Finally, the Swift EV Hybrid rounds out Suzuki’s Tokyo-bound lineup. What does it all say about Suzuki’s future? One theory is that here may be an electrified Swift on the market at some point. Another holds that in the future, humans will be replaced by compact discs.

To be perfectly honest, as with so many Japanese cultural artifacts and phenomena, I’m completely baffled. Luckily our East-West relations expert Bertel Schmitt will be on hand at the Tokyo Auto Show to help us figure it all out.

This chart, showing production and deliveries since the Detroit-Hamtramck plant was retooled shows a softening of demand and a small but undeniable downturn in Volt production. Wondering why GM was trimming production of a car it says it will build 60k units of next year (including 45k units for the US market), I reached out to GM to ask about the cutback. A spokesman replied

Our 2011 target is 16000 units global production and we’re right on target. The dip in Volt production is made up by an increase in Ampera production for export.

In other words, Det-Ham isn’t making fewer Volts, they’re just building more of them with Opel badges for Europe. But what about anecdotal evidence showing that US demand for the Volt is weak? Where are the 6,000 or so Volts that have been produced but not sold this year? GM’s breakdown is as follows:

As of Oct 31 we had built roughly 10500 vehicles, sold 5000, shipped 2300 dealer demos, had over 1400 in-transit (includes roughly 300 demos) and about 1800 on dealer lots… nearly 85 percent of the 2,600 participating Volt dealers have only one or zero Volt’s in stock. Of the 1400 dealers currently with no stock, roughly half have received a Volt and sold it and half are waiting to receive their first unit.

So, 1,800 units are currently on 1,200 lots. Presumably the 1,400 in-transit” units are headed to the 1,400 lots that have no Volts for sale. And now, Automotive News [sub] reports that GM is now allowing dealers to sell demonstrator-model Volts, noting

The move will increase the number of Volts available for sale to 4,100, from 1,800… Another 1,100 units are in transit.

GM will reimburse dealers $1,500 to compensate for depreciation and for the cost of removing some decals from the demo models. Dealers must sell their demos by Jan. 3 to qualify for the payment

In other words, if demand is as strong as GM is claiming, there should be no problems selling 10k units this year. Production is rolling along and inventory is building (AN [sub] says it was at 83 days supply as of October 1); though still a long way from the volume needed to sell 45k units in the US next year, sales are still growing as well. Over the next few months supply should build to the point where Volt demand should become discernible. One downside to the demonstrator-sale strategy: dealers will be giving up what GM calls its strongest halo car, which The General says draws customers who end up leaving in a Cruze. In any case, we’re about to learn a lot more about the real level of demand for the Volt… for now, however, we’ll have to stay patient.

Of all the Japanese automakers, none are as far behind on hybrid technology as Nissan. For some time there was a sense that Nissan’s (relatively) huge investment in electric vehicle production would represent a “leapfrogging” of hybrid technology, but now the firm is using the common industry response to questions about future technology: a suite of options, rather than one single technology, will meet tomorrow’s low-energy transportation needs. As a result, Nissan’s been playing catchup, as it admits in a recent press release [PDF]

“We must have a tougher job than any other hybrid team in the industry,” says Mitsunobu Fukuda, a senior powertrain engineer at NATC. “Because our CEO, Carlos Ghosn, used to be known as skeptical about the value proposition of hybrids we had to make a really compelling case that we could deliver value to customers to get him to validate a hybrid program.

In 2004, as a stopgap measure, Nissan licensed hybrid technology from Toyota for use in certain markets.

“It was a bit of a blow to our pride, but that was the right thing to do under the circumstances,” Fukuda says.“Instead of rushing out a ‘copy-cat’ hybrid we wanted to take the time to develop our own hybrid, one that is clearly different – and better. I think we’ve managed to do that.”

What makes Nissan’s forthcoming hybrid system so different? For one thing, it uses Nissan’s “one motor, two clutch” system (currently found only on the Infiniti M Hybrid), which enables a compact design. For another, it’s supercharged.

Nissan’s first in-house hybrid, the Infiniti M, highlights the firm’s approach to hybrids, with its simple two-clutch system that is fitted to the omnipresent continuously variable transmission. But having validated the rear-drive luxury version (see video above), Nissan is taking that design to the transverse, front-drive package. And because the “one motor, two clutch” design takes up the same amount of space as a traditional drivetrain (according to Nissan), this new hybrid system should be able to fit into many of Nissan’s mass-market products.

Supercharging has not played much of a role thus far in the industry-wide move towards downsized, forced-induction engines, playing its best-known role as half of VW’s “Twincharger” technology (which combinde both super- and turbocharging). But Nissan is already ahead of the curve, with its new Micra DIG-S, which combines a 1.2 liter, three-pot engine with a supercharger for its first sub-100 g CO2/km model. The key to supercharged efficiency? As Eaton points out, “downspeeding” can be as important as “downsizing.” Unlike turbos, superchargers don’t need high revs to build boost, so it can boost low-end torque more efficiently (which is where small engines most need the help). Combine that characteristic with a CVT, which can keep the engine operating at a near-maximum level of efficiency, and the benefits of a supercharging become more clear.

Of course, we still have a lot to learn about Nissans new supercharged hybrid. We do know that it is based around a 2.5 liter supercharged unit that Nissan says will spit out the same power as its 3.5 liter V6. This should help Nissan downsize its vehicle underpinnings as Hyundai has done, further benefitting fuel economy. Otherwise, we’ll have to wait until a 2013 debut before we know too much more about this new drivetrain. But one thing is certain: we’re going to have to get used to the idea of supercharging as a green technology, as well as a quick, bolt-on method of squeezing more power out of an engine.

Journos are congregating at an undisclosed location near the Chelsea Dog Run Park in downtown Manhattan as I write this, for the first ever unveiling of the BMW i3 and BMW i8 concept cars in North America. The sneak preview is being held before the cars get shipped to Los Angeles for the LA  Auto Show. The  mostly carbon fiber built battery operated and hybrid-electric vehicles had already been shown at the Frankfurt Motor Show, but here they are, on America soil. 

Both are artists previously known as. The BMW i8 Concept is the successor to the BMW Vision Efficient Dynamics car featured in Mission Impossible: Ghost Protocol. The BMW i3 Concept was previously known as the “megacity vehicle.”

You’ll probably never be able to buy anything like that, but you can look at them in, well, person at the LA Auto Show.

After dogged reporting, ABC’s investigative unit, headed by Brian Ross of dubious Toyota fame, found out the shocking news that Fisker received a $529 million federal, and now the unpatricotic SOB has the Fisker Karmas built in Finland. ABC is shocked, I say shocked:

“With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.”

Isn’t that downright disgusting? Nevertheless, Fisker and the U.S. Department of Energy are unrepentant, claiming that the money was spent in America, developing the car.

Fisker also says the company was unable to find an automaker in the U.S. that is willing to make a small run – 8,000 a year – of the $96,000 plug-in hybrid Karma. The Karma is built by Valmet, a Finnish company that specialized in small runs.

Fisker’s second vehicle, the Nina, will be built at a former General Motors plant in Wilmington, Delaware.

Even the Freep, usually on the side of the American worker and apple pie, could not help but snicker:

“In its report, tagged an exclusive, ABC News linked the loan to the overseas production, raising questions at a time when House Republicans are investigating whether another Energy Department loan to solar company Solyndra, now in bankruptcy, was awarded inappropriately.”

“But the Energy Department noted that it was known before the loan was even awarded to Fisker that the company’s first run would be made overseas, though the funding would support jobs in the U.S. For instance, the Wall Street Journal noted the Finnish production contract when it wrote about the loan at the time it was announced in September 2009.”

And just in case ABC doesn’t have old copies of the WSJ sitting aroud, TTAC revealed on September 1, 2009 the shocking news that “Fisker has contracted with Valmet to produce its luxury EV Karma, with production to start early next year.“ And we were wrong. It didn’t start in early 2011. Not by a long shot. Now here is a scandal worthy of Brian Ross. He blew it.

(Hat tip to an anoymous source in Salo, Finland)