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Japan’s Crisis Hurts Sales of Hybrid Cars and EVs

The people of Japan are courageously moving forward after the devastation of a 9.0 earthquake, a tsunami that ripped apart buildings and roads, and a nuclear crisis that now threatens their food and water. The Japanese economy depends in no small measure on the success of its automotive industry and its complex eco-system of component suppliers and service providers.

Just when gasoline prices are rising and hybrid cars are again hot sellers, the crisis is making hybrids and new electric cars tough to get. Let’s look at the impact on three big sellers of hybrids and electrics.

Toyota, Honda, and Nissan are hurt less than expected because they have diversified globally, including billion dollar plants and operations in the United States. The most advanced hybrids and electric cars, however, are first produced in Japan. Every supplier must be able to produce for new cars to be assembled in Japan. Once assembled, it will be challenging to move them across roads not ripped apart. It will take time to return shipping ports to normal after the recent tsunami tossed cars and railcars around like toys. Plants and operations require MW of electricity, now constrained by nuclear plant shutdowns.

Toyota

Toyota reports that all 13 North American vehicle and engine plants are running normally, although overtime has been curtailed to maintain adequate inventories of parts that come from Japan. Toyota now makes 12 different models in North America, including high-volume vehicles such as Camry, Corolla, RAV4, and Lexus RX 350, and nearly 70 percent of all Toyota and Lexus vehicles sold in the U.S. are made in North America.

Suppliers in North America provide most parts and materials for Toyota’s North American-built vehicles. Toyota has temporarily stopped all Japanese production of vehicles, but it is restarting production of replacement parts for cars already sold and parts necessary for overseas production. In general, Toyota is seeing adequate inventories at most dealers.

Prius vehicles are built in Japan, Steve Curtis with Toyota told me that the Tsutsumi plant where the Prius is made was not damaged by the earthquake. Production depends on more than the plant condition. It depends on a complex web of suppliers, supply of electricity, roads that can be crossed by employees and trucks deliveries parts. Toyota has delayed 12 Japan plant openings until March 26.

The tragedy in Japan has not delayed the U.S. launch of the new larger Prius V Crossover SUV and the Prius Plug-in Hybrid, not the new Toyota small electric city car. It has delayed the launch of the Prius wagon and minivan models in Japan from the original plan for the end of April. Reuters  Article

Since the production of current Toyota and Lexus hybrids, depends on a complex supply chain, and shipment to the UnitedToyota Prius 37k 150x102 Japan’s Crisis Hurts Sales of Hybrid Cars and Electric Cars States depends on roads and ports, Clean Fleet Report forecasts that shipments of Prius and other hybrids will be delayed and reduced for months.

Only one of three Toyota hybrid battery plants in Japan sustained limited damage from the earthquake. The other two plants are located in central Japan and were not affected. Panasonic and Sanyo are Toyota’s primary suppliers of nickel metal hydride and lithium batteries; their production status is uncertain.

Car dealers are betting that the supply of hot selling hybrids will be tight, especially with gasoline costing $4 per gallon in parts of the country. Auto News reports that dealers that were averaging $1,700 discounts on the Prius are now getting $800 premiums.

Honda

Honda is globally diversified in manufacturing and suppliers. With nine U.S. plants, Honda has invested more than $12.7 billion in its U.S. operations. The company employs nearly 25,000 associates and annually purchases $12 billion in parts and materials from more than 530 U.S. suppliers.

For hybrids such as the Civic Hybrid, Insight, CR-Z and Fit Hybrid, Honda also heavily depends on Japanese suppliers, including advanced battery suppliers such as Sanyo. At the heart of the 2012 Civic Hybrid and Honda’s new electric cars are the lithium-ion batteries built at its Blue Energy join venture (JV) with Japan’s GS Yuasa; the battery plant is in Fukuchiyama, Kyoto, Japan.

Last week, Honda had announced plans to resume production of major Japanese plants on March 20. Now these openings are delayed to March 27 or beyond. Like all major manufacturers, Honda depends on a complex eco-system of suppliers and joint ventures. Some plants have been damaged and roads to move parts have been ripped apart.

Nissan

Nissan has delayed March 21 plans to restart production of parts for overseas manufacturing and repair parts, based on parts availability from suppliers, at these plants Oppama, Tochigi, Kyushu, Yokohama, Nissan Shatai. Vehicle production will be constrained by inventory availability. The Iwaki engine plant remains closed.

LEAF battery 150x150 Japan’s Crisis Hurts Sales of Hybrid Cars and Electric CarsNissan recently shipped 600 Nissan LEAFs before earthquake and tsunami damage. At the Port of Hitachi, however, Nissan lost 1,300 U.S.-bound Infiniti and Nissan cars to the tsunami. Nissan had plans to soon have 10,000 LEAFs built at the Oppama plant. Now Nissan’s hopes of catching-up with U.S. deliveries of the Chevrolet Volt have faded in the near term.

Starting next year, Nissan’s Tennessee assembly plant will have the capacity to build 150,000 Nissan Leaf electric cars per year, and 200,000 lithium-ion battery packs per year. The lithium packs could also be used in future Nissan hybrid cars. The Tennessee battery production is by AESC, a joint venture of Nissan and NEC.

Once production returns to normal, U.S. shipments could still be delayed. Japan faces a fuel shortage. Fuel is needed to transport cars to ports, to run port drayage trucks and lifts, and to run ships. Even electric cars still depend on diesel to move them to market.

New Honda Fit EV likely to cost less than Nissan LEAF

The New Honda Fit EV will go on sale for U.S. customers in 2012. By using the lighter Honda Fit platform, already in volume manufacturing, Honda could price the Fit EV at $29,900, less than the Nissan LEAF with a minimum price of $32,780.

The Fit EV was announced at the LA Auto Show as a concept. As crowds of reporters surrounded the car for photos, I could see that this new battery-electric car will be popular with current drivers of hot compact hatchbacks such as the Honda Fit, Toyota Yaris, Ford Fiesta, Chevy Cruze, and Mini-Cooper. In the next few months the Fit EV will hit the streets with real world daily driving at Stanford University, City of Torrance, and Google’s fleet and car share programs. The Fit EV will be introduced to the U.S. and Japan in 2012. The Fit EV will compete with the Nissan LEAF, Toyota FT-EV, Ford Focus Electric, and several others as competition heats for 2012 leadership.

This was the first time that a new global vehicle was personally announced by a Honda CEO at a U.S. show. Takanobu Ito, Honda Motor Co., Ltd. President and CEO. Stated, “We must advance from using less petroleum to no petroleum…. In Honda’s view, an electric vehicle must offer great utility and be fun to drive. Fit EV’s urban commuting capability will be a perfect addition to the full-function mobility of the plug-in hybrid and FCX Clarity fuel cell electric vehicle.”

Honda Fit EV is 100% Electric

I talked with Ben Knight, Honda’s Vice President of Engineering, about these new electric vehicles. Mr. Knight was proud that the electric drive system represent four generations of improvements for Honda starting with the Honda Plus EV in 1997 to Insight and Civic Hybrids to generations of advanced fuel cell vehicles with all-electric drives to the new CR-Z Hybrid. At optimal RPM, the new electric motors are up to 98 percent efficient. This is quite a contrast to the typical 15 percent efficiency of a gasoline engine.

The Fit EV is designed to meet the daily driving needs of the average metropolitan commuter and utilizes the same 5-passenger layout found in the popular Fit hatchback. The Fit EV is be powered by a lithium-ion battery and coaxial electric motor. The high-density motor, derived from the FCX Clarity fuel cell electric vehicle, delivers excellent efficiency and power while remaining quiet at high speeds. The Fit EV will have a top speed of 90 mph.

The Fit EV will achieve an estimated 100-mile driving range per charge using the US EPA LA4* city cycle (70 miles when applying EPA’s adjustment factor). Driving range can be maximized by use of an innovative 3-mode electric drive system, adapted from the 2011 Honda CR-Z sport hybrid. The system allows the driver to select between Econ, Normal, and Sport to instantly and seamlessly change the driving experience to maximize efficiency or improve acceleration. While in Econ mode, practical driving range can increase by as much as 17 percent compared to driving in Normal mode, and up to 25 percent compared to driving in Sport mode. The Nissan LEAF Eco mode only improves range by 10 percent. Acceleration improves significantly when in Sport mode, generating performance similar to a vehicle equipped with a 2.0-liter gasoline engine.

In addition to the 3-mode E-Drive system, the Fit EV will include several interactive coaching systems to assist the driver in maximizing battery range. A special meter display advises the driver when to shut off air conditioning and other accessories to conserve battery power.

Remote Control for New Electric Car

To help the driver manage the electric vehicle ownership experience, the Fit EV will have a standard connectivity system that allows the driver to stay connected through a smartphone and personal computer, or the Honda-exclusive interactive remote, while away from the vehicle. The pocket-friendly, interactive remote provides connectivity to the vehicle without the need for an internet connection or mobile phone signal. Through the connectivity system, drivers will be able to remotely view the vehicle’s state of charge, initiate charging and activate the air conditioning, even while connected to the grid, to reduce the drain on the battery at start-up. The mobile application and website also offers the ability to set charging notifications and alerts to optimize utility rates, and provides 24-hour roadside assistance, along with a public charging station locator. The Fit EV will come equipped with a standard Honda Satellite Linked Navigation System™ that includes a public charging-station locator capability.

The Fit EV is designed to be easy and convenient to charge. Battery recharging can be accomplished in less than 12 hours when using a conventional 120-volt outlet, and less than six hours when using a 240-volt outlet. The Fit EV has unique LED headlights, a chrome front fascia, aerodynamic bumper, clear LED taillights and EV decals. Inside, the Fit EV Concept is outfitted in an eco-friendly gray bio-fabric on the seating surfaces.

Displayed alongside the Fit EV Concept at the show is a prototype Honda charging stand. To begin charging, the driver swipes a card in front of the screen and then connects the charger to the vehicle. The Honda charging stand provides a glimpse at the future of an electric-charging infrastructure that is easy to use and intuitive for consumers.

Clean Fleet Report: Honda 2012 Plug-in Hybrid