Toyota Kills PHEV Deposit Scheme

Most hybrid/EV companies run on deposits. With most “game-changing” products still deep in development, firms often squeeze deposits out of prospective customers to keep cashflow coming before their cars come to market. Not so with Toyota. The LA Times blog notes that Toyota has asked its Palo Alto, CA dealer to stop taking $500 deposits on plug-in Prius models that are still several years from launch. “We asked the folks at Magnussen (Toyota of Palo Alto) to back off a little bit,” Toyota spokesman Irv Miller said. “Let us get our product to market and figure out where we’re going with it before we start putting the cart in front of the horse.” Magnussen has refunded all 25 cash deposits it received, and has created a free waiting list that has already grown to 44. But Toyota’s warning to Magnussen isn’t stopping other Toyota dealers from collecting cash deposits. “I’ve got a few people in town who wanted to come in and leave deposits” on a plug-in hybrid, says Matt Meyer, Sales director of Toyota San Louis Obispo. “I’m not going to tell them ‘No,’ because I don’t tell my customers ‘No.'” Both dealerships say the deposits are fully refundable, but Toyota could still go after San Louis Obispo with a cease-and-desist. That Toyota is trying to reign in hype rather than spur it on is telling. Not only does it show that its future products will face astronomical demand, it also proves that short-term cash is not worth even a few possibly disastisfied customers. Contrast this approach with Chrysler’s un-product EV hype for a quick lesson in how white-hot demand for next-gen powertrains should and should not be exploited.