Toyota Hybrid Superiority Challenged

Boston, MA - May 3, 2011 –  In looking at the latest car maker strategies for electric and hybrid vehicles, Strategy Analytics predicts that 6.5 million mild, full and plug-in hybrid vehicles will be manufactured by 2018, while 1.1 million battery electric vehicles will be manufactured, as described in the report, “Economies of Scale - Driving Affordability In Electric and Hybrid Vehicles.”  In order to remain profitable and pass tighter fuel economy and fleet emission mandates, automotive OEMs are increasing production economies of scale, thus lowering of their costs.

Automotive OEMs are:

• widening deployment to models built on the same platform and to the mass-produced compact segments;
• raising flexibility to suit the different requirements of different consumers;
• simplifying design to reduce cost and bring about localized production; and
• raising competition between suppliers.

Kevin Mak, analyst in the Automotive Electronics Service (AES) at Strategy Analytics, said, “Consumers will continue to demand greater fuel efficiency as the price of fuel continues to rise. Incentives, such as lower emission-related annual road taxes, bring about greater competition among OEMs, even if they will pass future mandates.  In the emerging markets, fuel subsidies are set to be phased out. The Chinese government has announced a major investment program to push plug-in vehicles.”

Mr. Mak continued, “The OEM landscape in electrified powertrains will change. Toyota will face stiffer competition as its rivals collaborate, as in the recent situation with BMW and PSA. Without essential collaboration for developing batteries and recharge-related systems, deployment will be a challenge.”