For more than 35 years, Toyota's North American engineering and research and development activities have been headquartered in Ann Arbor, Michigan.

Team members at our design and research centers are engaged in engineering design, prototype building, vehicle evaluation, evaluation and design of parts and materials, regulatory affairs, emissions certification and technical research. Toyota's Ann Arbor technical center is widely regarded as Toyota's leading technical center outside Japan.

A fundamental step in the design of our vehicles is REFLECTION
The Japanese word hansei, translated loosely as reflection, is what happens when one of our employees stops to examine a completed project. Hansei is both an intellectual and emotional introspection. The employee must recognize the gap between the current situation and the ideal, take responsibility for finding solutions, and commit to a course of action. When a project finishes at Toyota, we use hansei to evaluate what went well and what did not. We then methodically try to preserve what went well and create countermeasures for what did not. These lessons are incorporated into the standard process so that when we repeat it, we improve over the last time. Finally, we share these insights with our colleagues so that they can learn as well, in a process we call yokoten.
hansei
, which in Japanese means reflection. We reflect on the successes and failures of previous projects and review what can be improved going forward. Through this process, we are finding ways to innovate more "green" into our products, for example, by finding ways for our vehicles to go longer distances on fewer gallons of fuel and by minimizing the use of harmful chemicals in vehicle parts. We are also building a portfolio of advanced technologies to meet future mobility needs. All of these activities begin with research and development. Read on to find out more about Toyota's green innovation.

VEHICLE EFFICIENCY & EMISSIONS

The most common fuels used in vehicles across North America today are gasoline and diesel, both of which are derived from petroleum. The Energy Information Agency projects an increase in global petroleum demand of almost 20 percent over the next two decades, which will create continued upward pressure on the price of these fuels.

Gasoline and diesel contain mixtures of hydrocarbons that, when combusted in a vehicle engine, cause emissions of several types of air pollutants, including carbon dioxide, hydrocarbons, nitrogen oxides (NOx) and carbon monoxide. These pollutants are linked to climate change, smog and acid rain, as well as a number of human health effects.

Toyota engineers are continually looking for ways to increase fuel economy and reduce emissions of pollutants from our vehicles. Vehicle weight, engine output, the application of new technologies and other factors are all evaluated to optimize fuel economy and tailpipe emissions, all before a vehicle is built. We describe our efforts and performance in these areas below.

Fuel Economy and GHG Emissions

Fuel economy is the distance a vehicle can be driven on a certain amount of fuel, measured in the United States as miles per gallon (mpg). Fuel consumption is the quantity of fuel burned over a defined distance, and in Canada is measured as liters of fuel burned per 100 kilometers traveled (L/100 km). The amount of fuel burned is directly related to emissions of carbon dioxide (CO2), a greenhouse gas: The more fuel burned, the more CO2 emitted.

The U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) recently finalized fuel economy and greenhouse gas (GHG) emissions standards for 2017-2025 model year passenger cars and light trucks in the U.S. This is a continuation of the agreement reached between auto makers and EPA, NHTSA and the California Air Resources Board that established a coordinated national program for fuel economy and GHG emissions standards for 2012 through 2016 model year vehicles.

By 2016, the new vehicle fleet must meet a GHG standard of 250 grams of CO2 per mile, equivalent to a Corporate Average Fuel Economy (CAFE) standard of 35.5 miles per gallon; by 2025 cars and light trucks are required to yield a combined 54.5 mpg.

Toyota in Canada supports a harmonized approach with the United States to setting emissions standards. The Canadian federal government introduced a greenhouse gas emission regulation under the Canadian Environmental Protection Act for the 2011 through 2016 model year that contains requirements similar to the GHG emission standards adopted in the U.S.

Toyota, along with the Alliance of Automotive Manufacturers, has been a strong advocate of a single national framework for fuel economy and vehicle GHG regulations. We believe the recent joint EPA-NHTSA final rule is on course to achieve that objective.

The standards present a significant challenge for our engineers and we expect multiple vehicle and powertrain technologies will be necessary to meet the challenge. Using Toyota Way principles, we evaluate vehicle powertrains, weight, aerodynamics and other design factors to find fuel-efficient combinations for our vehicles. Our technology portfolio approach, as well as our experience marketing hybrids and other advanced technologies provide a solid foundation for success. While climate change and fuel efficiency are priority management issues at all Toyota locations worldwide, our challenge is to find approaches that drive down fuel consumption and GHG emissions while still meeting customer demands for vehicle size, power, driving range and affordability—without sacrificing world-class vehicle safety performance.

For this reason, Toyota believes engines fueled by gasoline and diesel will remain a dominant source of vehicle power for the foreseeable future and that hybrid technology will play an increasingly important role. Many of our hybrid products are already capable of meeting their respective future targets, which is one reason hybrid technology is at the core of Toyota's compliance strategy.

We are moving ahead with our goal to offer hybrid options on all of our vehicles by 2020. During the 2012 New York International Auto Show, we introduced the all-new 2013 Lexus ES 300h. This is the first time the ES will be offered as a hybrid. The innovative hybrid engine design replaces the accessory belts with computer-controlled electric accessories to improve fuel economy, emissions and durability, while a near-zero evaporative fuel system helps reduce emissions of volatile organic compounds (VOCs). The ES 300h has an EPA fuel economy rating of 40 mpg combined.

The key to meeting the new standards will be offering hybrids and other technology options that consumers are able and willing to purchase in sufficient quantities. At this point, it is nearly impossible to predict consumer preference for 2025 model year vehicles since preferences will largely be determined by factors such as fuel price, economic conditions and technological progress—most of which are beyond an auto manufacturer's control. To ensure the standards remain practical in light of these uncertainties, the final rule calls for the feasibility of the 2022-2025 model year standards to be re-examined by 2018. Toyota supports this mid-term evaluation. We believe the evaluation should include the long-standing practice of treating vehicles and fuels as a system since higher octane and/or reduced sulfur can enable additional greenhouse gas emissions reductions and fuel savings from several engine technologies, while biofuels have the potential to reduce the carbon intensity of the fuel.

Performance

In the United States, Toyota offers the most fuel-efficient fleet of any full-line manufacturer, while in Canada, we maintain the most fuel-efficient passenger car fleet. Toyota has been performing better than the required U.S. Corporate Average Fuel Economy (CAFE) standards and Canadian Car Company Average Fuel Consumption (CAFC) targets. As a result, CO2 emissions from Toyota's new vehicles are below that of the industry average in both the U.S. and Canada, for cars and light-duty trucks.

Our CAFE and CAFC performance is driven by high volume sales of our most fuel-efficient vehicles, such as Prius and Corolla. As drivers grapple with some of the highest fuel prices in recent memory, Toyota has strengthened its portfolio of efficient cars with five recently introduced vehicles that offer a combined fuel economy ratings average of 44 mpg:

  • Prius Plug-in Hybrid (EPA rated 50 mpg combined and 95 mpge in EV mode)
  • Prius c (EPA rated 50 mpg combined)
  • Scion iQ (EPA rated 37 mpg combined)
  • Camry Hybrid (EPA rated 40 mpg combined for LE and XLE trim levels)
  • Prius v (EPA rated 42 mpg combined)

These five new Toyota and Scion models represent a broad range of leading-edge drivetrain and engineering technologies that help them achieve a high level of efficiency. Hybrid Synergy Drive, extended electric vehicle range, generous use of lightweight high-strength steel, a focus on aerodynamics and the use of efficient continuously variable transmissions are among the measures employed that help these new vehicles attain a high level of fuel efficiency.

Toyota offers several models that achieved best-in-class fuel economy ratings in 2012. In the United States, the Prius c leads the EPA's compact classification with 50 mpg combined. The Prius Liftback's combined 50 mpg leads the EPA's midsize category, and the midsize station wagon class is led by the 42 mpg combined offered by the Prius v. (These segment classifications are determined by EPA's measurement of a vehicle's interior volume; ratings exclude PHEV and pure EV vehicles; see www.fueleconomy.gov). In Canada, the Tacoma ranked first in the pick-up class and the Prius v ranked first in the station wagon class in Natural Resources Canada's ecoENERGY Awards for 2012.

Toyota and Scion branded vehicles also represent six of the Top 10 EPA-rated Fuel Sippers for 2012 (excluding PHEV or pure EV products), and occupy three spots in that list's top five. Toyota family vehicles found on the U.S Department of Energy's Top 10 EPA-rated Fuel Sippers include:

  • Prius c (ranked 1st, 53 city, 46 hwy)
  • Prius (ranked 2nd, 51 city, 48 hwy)
  • Prius v (ranked 4th, 44 city, 40 hwy)
  • Toyota Camry Hybrid LE (ranked 7th, 43 city, 39 hwy)
  • Toyota Camry Hybrid XLE (ranked 8th, 40 city, 38 hwy)
  • Scion iQ (ranked 10th, 36 city, 37 hwy)

U.S. Car Corporate Average Fuel Economy, or CAFE

U.S. Truck Corporate Average Fuel Economy, or CAFE

Canadian Car Company Average Fuel Consumption, based on GHG Emission Regulation

Canadian Truck Company Average Fuel Consumption, based on GHG Emission Regulation

Annual CO2 per Kilometer, Toyota U.S. Fleet

Annual CO2 per Kilometer, Toyota Canadian Fleet

Criteria Pollutant Tailpipe Emissions

Hydrocarbons, nitrogen oxides (NOx) and carbon monoxide from vehicle exhaust are linked to various air quality issues, including smog and acid rain, as well as a number of health effects. Limiting these emissions from our vehicles helps to reduce some of the environmental impacts of driving.

The state of California and the U.S. Environmental Protection Agency (EPA) have their own certification programs to categorize vehicles in terms of their level of tailpipe emissions (Canada and the U.S. have equivalent standards). In California, the Low-Emission Vehicle II (LEV II) regulations categorize vehicles as LEV (Low Emission Vehicle), ULEV (Ultra Low Emission Vehicle), SULEV (Super Ultra Low Emission Vehicle), ZEV (Zero Emission Vehicle), or AT-PZEV (Advanced Technology Partial Zero Emission Vehicle).

In 2011, the California LEV II regulations required an auto manufacturer's fleet average to meet an emission standard for non-methane organic gas (NMOG) of 0.035 grams per mile (gpm) for passenger cars and light-duty trucks up to 3,750 pounds, and 0.043 for other light.duty trucks.

In the U.S. and Canada, federal certification programs categorize vehicles into Tier 2 Bins 1 through 8. Lower bin numbers correspond to vehicles with lower tailpipe emissions; Bin 1 is for vehicles with zero tailpipe emissions. The federal programs in both the U.S. and Canada require a manufacturer's fleet average to meet a Tier 2 NOx standard of 0.07 gpm.

We expect the current vehicle emission standards in the United States to change. The state of California is considering amendments to the Low-Emission Vehicle (LEV III) greenhouse gas emissions standards, LEV III criteria pollutant standards and Zero-Emission Vehicle (ZEV) regulations approved by the California Air Resources Board on January 26, 2012. The U.S. EPA is also in the process of developing their next generation of emissions standards (Tier 3). We support extending the One National Program concept developed for greenhouse gas and fuel economy standards to criteria pollutants. This would result in a unified, coordinated approach for regulating criteria emissions where compliance with either agency's requirements is accepted nationwide.

Toyota, along with other auto manufacturers, also supports efforts to harmonize the California LEV III and federal Tier 3 programs. We are working with federal and state agencies through their regulatory processes to help develop rules that are both effective and feasible. We seek to maintain the flexibility to build vehicles based on customer preferences. In setting tailpipe emission regulations, we believe standards should be performance-based and take into account the interaction with other vehicle rules—such as fuel economy/greenhouse gas standards—to ensure that the total package of requirements is workable. As with greenhouse gas emissions, fuels must be considered with vehicle technologies as a holistic system. Reduced sulfur levels in gasoline, already available for the LEV III program, are needed to enable the after-treatment systems being designed for Tier 3 compliance.

Performance

Toyota annually complies with the state of California, U.S. and Canadian federal vehicle emissions programs, and we have met the requirements for the 2012 model year.

More information about the emissions performance of Toyota, Lexus and Scion vehicles sold in the United States can be found in EPA's Green Vehicle Guide.

Toyota and Lexus SULEVs

CHEMICAL MANAGEMENT

Many different types of chemicals are used in the manufacturing of an automobile. These include chemicals used in paint, interior plastics, trims, adhesives and textiles. Chemical management refers to how we manage and minimize the impacts of chemical use to the environment. For years, Toyota's engineers have been incorporating chemical management into the design of vehicles to ensure the utilization of environmentally preferable materials.

Toyota uses the International Material Data System (IMDS) as the primary tool for tracking the chemical composition of parts and accessories. Suppliers are required to enter into IMDS detailed information about the chemical composition of parts and accessories. Through this system, Toyota tracks the use of chemicals on the Global Automotive Declarable Substance List (GADSL), a list developed and maintained by a global automotive stakeholder committee.

Use of IMDS is particularly crucial for ensuring compliance with international recyclability and chemical management laws (such as those in China, Korea, Europe and Japan). Therefore, we adopted IMDS in North America to facilitate tracking and verification of compliance with these laws for vehicles assembled here that will be exported to international markets. For example, Toyota is exporting the Camry and Sienna from North America to South Korea; using IMDS will ensure these vehicles meet South Korea's recyclability laws.

We have completed data collection under IMDS for three vehicles in North America: Camry, Sienna and Venza. The use of IMDS facilitates the effective management of all types of chemicals, including those that are of concern but are not specifically restricted in international recyclability laws. Our recent experience with using IMDS in North America is helping us better understand its benefit for overall chemical management.

Design for Recyclability

In each model redesign or running change, we consider how to use more renewable, recycled and recyclable materials. Toyota Way principles guide these efforts. With the vast number of parts used to make a vehicle, there is trial and error in the process of finding environmentally preferable materials. Hansei is the principle that teaches us to evaluate a process thoroughly and ask the five why's in root cause analysis, helping us to judge what works and what doesn't and to evaluate where we can make further improvements.

Over the course of the last several years, Toyota has evaluated numerous materials made from renewable resources to assess their performance, appearance, safety and mass production capability. In addition, the automotive industry is working on finding recyclable and renewable alternatives to petroleum-derived plastics, which reduces reliance on fossil fuels. Toyota is working with SAE's International Green Technology Systems Group on characterizing biobased materials. This is part of a larger effort by SAE to serve as a guiding body for consensus standards development for environmental sustainability issues in the automotive sector

We have been using bio-based plastics—plastics derived either wholly or in part from plant materials—in numerous parts and components for over a decade. Toyota hopes that as production volume of such parts increases, their cost will approach that of parts made with traditional fossil fuel-based plastics.

Vehicles Containing Bio-based Plastics

Lexus HS 250h Eco Plastic Usage Example

Our bio-based plastics have typically used a polypropylene/polylactic acid (PP/PLA) composite derived from plant material. Toyota has developed a new plant-derived bio-based plastic more suitable for auto interiors than other bio-based plastics. Toyota began using the new material in the luggage compartment liner of the new Lexus CT200h hybrid-electric compact car. This is the world's first use of a bio-based polyethylene terphthalate (PET) resin in the auto industry.

PET, commonly used in plastic water and soft drink bottles, is typically made from 70 percent terphthalate acid and 30 percent monoethylene glycol. In the new bio-based plastic, the latter is replaced with a raw material made from sugar cane. The new material is more heat-resistant and durable and is less susceptible to shrinkage than the corn-based bio-based plastic parts used in some vehicle interiors.

We are currently investigating new materials for fabrics and carpets as well as additional applications of PP/PLA-based and natural fiber-based materials in North American vehicles.

Substances of Concern

Our strategy around managing substances of concern (SOCs) initially focused on four heavy metals known to cause environmental and health effects: hexavalent chrome, mercury, lead and cadmium. In 2004, Toyota made a voluntary commitment in North America to minimize these four heavy metals found in parts and accessories to the de minimis levels specified in the European Union's Directive on End-of-Life Vehicles—even though vehicles were not being exported to Europe. After working closely with our suppliers, parts and accessories in North America have not contained hexavalent chrome, mercury, lead or cadmium above levels outlined in the European Union's Directive since 2007.

Our SOC strategy has expanded in recent years to include copper in brake pads and the flame retardant decaBDE. Copper in brake pads is to be phased out by 2025 in alignment with recent legislation in Washington and California. The legislation was created due to concerns about copper found in runoff water. The Alliance of Automobile Manufacturers—of which Toyota is a member—received the prestigious 2011 Edmund G. "Pat" Brown Award from the California Council for Environmental and Economic Balance (CCEEB) for its work on this legislation. This award is given to a person or organization that exemplifies the spirit of environmental and economic balance. The partnership between the Alliance and environmental groups was commended for working together to find a practical, achievable regulation that both protects water bodies and maintains high standards of vehicle safety. We are working on finding a suitable alternative to the copper used in brake pads.

Another example is decabromodiphenyl ether (decaBDE), a flame retardant used in vehicles. The U.S. EPA and chemical suppliers reached a voluntary agreement to phase out production of decaBDE by December 31, 2013. Toyota has been working with suppliers to develop a replacement for decaBDE that meets the federal motor vehicle safety standard FMVSS302 on flammability of interior materials.

Cabin VOCs

Volatile organic compounds (VOCs) can be emitted from materials in the vehicle interior after manufacturing, commonly recognized as the "new car smell." These materials include plastics, leather, textiles, glues, sealants and additives. We work with our suppliers to develop alternatives that emit lower levels of VOCs in the vehicle cabin. We have developed new tape systems to reduce toluene emissions. More recently, we have been working with our suppliers on reducing formaldehyde and acetaldehyde that form during leather retanning and finishing

The Prius Liftback, Prius Plug-in Hybrid, Prius c, Prius v and Camry Hybrid offer available SofTex-trimmed heated front seats. SofTex material weighs about half as much as genuine leather, and its manufacturing process generates 99 percent fewer VOCs than that of conventional synthetic leather.

Auto manufacturers are working toward one global standard to test emissions of VOCs in vehicle cabins at the component level. In the meantime, a voluntary standard for the full vehicle cabin exists from the Japan Automobile Manufacturers Association (JAMA). Toyota believes the JAMA standard addresses compounds readily found in vehicle cabins. For the 2012 model year, the North American-produced Sienna, Avalon, Corolla, Venza, Highlander, Camry and RAV4 EV conform to this standard.

FUTURE TRANSPORTATION

Someday in the future, we imagine the perfect eco-car. It's what inspires our zero-emissions goal and our drive toward zero impact on the environment. And because of the variety of possible alternative fuel sources, we believe there will be more than one solution. Whether it's electricity, hydrogen or biofuels, we are investing today to advance the vehicles of tomorrow.

Toyota's approach focuses on developing a suite of technologies that can meet the world's mobility needs sustainably and with the flexibility to address the requirements of specific regions or markets. We acknowledge that one technology will not be the "winner" and that a mobility system in New York could look very different from systems in São Paulo, Toronto, London or Shanghai. That's why Toyota is investing in a range of advanced technology vehicles—battery electric, plug-in hybrid and fuel cell, rolling out conventional hybrids across our entire lineup, and improving the efficiency of our conventional engines and powertrains. The timeline below highlights significant milestones in the development of Toyota's advanced technology vehicles.

Our investments in advanced technology address all aspects of the vehicle life cycle. Our commitment to hansei—deep periods of reflection and problem solving—have resulted in significant improvements with each generation of our advanced technology vehicles. We continue to reflect and innovate for better fuel efficiency, lower tailpipe emissions, and greater use of renewable and recyclable materials. Below we describe four of our advanced technology vehicles in greater detail: hybrids, plug-in hybrids, electric vehicles and fuel cell hybrids.

Advanced Technology Vehicle Milestones

Hybrid Vehicles

Hybrid technology is the foundation of Toyota's approach to minimizing the environmental impacts of gasoline-powered vehicles. Knowledge gained from hybrid development and deployment is helping Toyota accelerate the introduction of future powertrains that can utilize a wide variety of energy sources and fuels, including hydrogen, biofuel, natural gas and electricity.

Hybrids account for 15 percent of Toyota's global vehicle sales, with over four million sold worldwide (as of June 2012). Over 1.7 million Toyota and Lexus hybrids have been sold in North America to date. In the U.S., the mix of hybrid vehicles for the Lexus brand has increased to 14 percent, double what it was in 2005 when Lexus introduced its first hybrid. In the first half of 2012, Toyota and Lexus hybrid sales accounted for more than 80 percent of Canada's overall hybrid market, and in 2011, nearly one in five Lexus sales was a hybrid.

Total sales of Toyota and Lexus hybrid vehicles globally since 1997 have resulted in a 26 million ton reduction in CO2 emissions when compared with what would have been emitted by gasoline-powered vehicles of similar size and driving performance, when identically driven and maintained.

Hybrid Fleet

Toyota and Lexus hybrids have won numerous awards in 2012, including:

  • Kiplinger's Personal Finance Best New Car Value awards lists the Lexus RX 450h as "Most Fuel-Efficient" in the Large and Midsize Crossovers category.
  • The American Council for an Energy-Efficient Economy (ACEEE) lists the Lexus CT 200h, Prius and Camry Hybrid as three of the "Greenest Vehicles of 2012."
  • Kelley Blue Book's kbb.com lists the Toyota Prius c and the Lexus CT 200h as among its picks for the "10 Best Green Cars of 2012."

Spotlight: The Prius Family

Toyota's first hybrid—the Prius—accounts for half of all hybrids on the road in North America. The Prius began as an exploration of future technologies, but has evolved into a growing family of vehicles to suit various consumer needs. There is now a hybrid for everyone, including the 2012 Prius v, one of Fueleconomy.gov's Top 10 EPA-Rated Fuel Sippers and Canada's most fuel-efficient station wagon—making it 11 straight years that a Prius vehicle has won an ecoENERGY Award from Natural Resources Canada.

Toyota hybrid technology has been particularly well-embraced by consumers in the Los Angeles area, where 64 percent of all hybrid vehicles registered are Toyotas. In fact, last year the Prius was the fourth best-selling vehicle in Southern California despite supply issues prompted by the 2011 Tohoku earthquake and tsunami.

Toyota brought the Prius c—the latest member of the Prius Family—to market in March 2012. The letter "c" represents "city" in the Prius c name. Designed to function as an urban-friendly vehicle with a city fuel economy rating of 53 mpg and a combined rating of 50 mpg, Prius c offers the highest city mpg rating of any vehicle without a plug. The all-new Prius c joins the third generation Prius Liftback, the versatile new Prius v and the Prius Plug-in Hybrid, which also had its North American debut in 2012.

The Prius Family captured 52 percent of the U.S. hybrid market in the first half of 2012. Over 1.2 million Prius Family vehicles have been sold in the U.S. and 2.9 million worldwide (as of June 30, 2012).

Plug-In Hybrid Vehicles

Toyota views the plug-in hybrid vehicle as a pathway to reduce fuel consumption and tailpipe emissions (including CO2) even beyond a standard gasoline-electric hybrid vehicle. In 2012, we launched the Prius Plug-in, available both in Canada and at participating dealers in 15 launch states (Arizona, California, Connecticut, Hawaii, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia and Washington). Availability is planned for all other states in 2013.

Toyota's Prius Plug-in offers all the advantages and utility of a conventional hybrid vehicle. Its 4.4 kWh lithium-ion battery has more capacity than that of the original Prius and can be charged using a 120V outlet in about three hours (with a dedicated 15 amp circuit). Depending on the driving profile, regular recharging can reduce gasoline consumption by up to onethird over a conventional Prius, which in turn reduces both mobile source greenhouse gas emissions and criteria pollutants.

The 2012 Prius Plug-in can operate on battery power alone at speeds up to 62 miles per hour and is rated by the U.S. EPA with an EV Mode range up to 11 miles. For longer distances and at speeds above 62 miles per hour, the Plug-in automatically changes to hybrid mode and operates like a regular Prius.

The EV mode fuel economy for the Prius Plug-in is rated an estimated 95 mpge (miles per gallon equivalent). In hybrid mode the Prius Plug-in has a combined driving rating of 50 miles per gallon. Total driving range is estimated as high as 540 miles on a single charge and single tank. Drivers who use the vehicle for street driving and frequent short trips while charging regularly will realize the biggest reduction in gasoline usage.

We also revealed the NS4 advanced plug-in hybrid concept vehicle at the 2012 North American International Auto Show in Detroit. The NS4 signifies Toyota's vision for future mobility with a focus on connectivity and the human interface. NS4's advanced powertrain targets a nextgeneration Hybrid Synergy Drive plug-in system featuring reductions in component size and weight with improved overall fuel economy, better acceleration and longer all-electric range.

Plug-in Hybrid Vehicle Batteries

The lithium-ion (Li-ion) batteries powering the Prius Plug-ins are built in conjunction with PEVE (Panasonic EV Energy Company, LTD), a joint venture with Toyota. Toyota designed the Prius Plug-in Hybrid around a battery pack that is smaller than competitive plug-ins or EVs for several reasons. The smaller battery pack serves to boost the vehicle's overall fuel economy. A smaller battery weighs less, is easier to package in the vehicle, and charges more quickly than a larger one. With shorter charging times, more opportunities to recharge are available in a day. Plus, a smaller battery costs less to build and uses less rare earth elements than a larger one.

The goal was to design a vehicle that fits seamlessly into most people's lives and does not demand sacrifices, yet boosts the overall fuel economy beyond that of a conventional hybrid. Finding the right size battery can yield impressive reductions in gasoline consumption while minimizing greenhouse gas emissions. When balancing the overall environmental impact with the needs of drivers for vehicle range, charge times and fuel consumption, the Toyota Prius Plug-in has a battery that seems "just right."

Spotlight: Green Rallies

Toyota hybrids are more than ready for the rally world. The Rallye Vert de Montréal is the Canadian stop in the world championship of green rallies, as part of the Fédération Internationale de l'Automobile (FIA) Alternative Energies Cup series. The series is an annual competition started in 2007 consisting of 13 rallies around the world. The Montreal rally challenges environmentally advanced vehicles to be as fuel-efficient as possible. Last fall, a Prius Plug-in placed first in consumption for the second year in a row.

Toyota also placed 21st with a Prius Plug-in at the 2012 Rallye Monte Carlo des Energies Nouvelles, the world's oldest and most prestigious green rally. The Rallye Monte Carlo des Energies Nouvelles, organized by the Automobile Club of Monaco, attracted 146 competitors who drove 800 kilometers over the course of three days. This was the first event of the year in the FIA Alternative Energies Cup series.

The Toyota Prius Plug-in that placed 21st was driven by Vinh Pham, an Advanced Technology and Powertrain Engineer with Toyota Canada Inc., with seasoned rally racer and Toyota Canada colleague Peter Nytko, Consultant, Technical Services, alongside as navigator. Last fall, the duo teamed together in the Toyota Prius Plug-in to win the 2011 Rallye Vert de Montréal, which qualified them for the Monte Carlo event.

"The Toyota Prius Plug-in has proven yet again that its ultra-efficient and powerful powertrain enable us to set a true standard of excellence for electric hybrid vehicles," said Stephen Beatty, Managing Director and Chief Environmental Officer at Toyota Canada Inc. "Toyota's plug-in technology provides zero-emission driving balanced with a lighter battery for long distances. We're very pleased that Vinh and Peter had a chance to showcase Toyota's superior green technology on such a grand international stage."

Electric Vehicles

Toyota engineers have been studying electric vehicles (EVs) for nearly 40 years. Since the early 1970's, Toyota has made enormous strides in creating a consumer accepted and environmentally preferable electric vehicle. To date, Toyota has developed the TownAce EV (van) and the Crown Majesta EV (sedan) in the Japanese market, the Toyota e-com (a two passenger concept EV), and two generations of the RAV4 EV in the U.S. market. (The 2013 RAV4 EV is being co-developed with Tesla; see below.) Alongside the company's groundbreaking hybrid, plug-in hybrid and fuel cell vehicles, EV technology represents another component of Toyota's long-term vision for future mobility.

Toyota's second-generation RAV4 EV was developed as part of a partnership with Tesla Motors, Inc. Toyota debuted a conversion RAV4 EV at the Los Angeles Auto Show in November 2010. Conversion RAV4 EVs were built for a demonstration and evaluation program that ran through 2011. The EV demonstration program aimed to educate the public about electric vehicle technology and promote the development of electric vehicle charging infrastructure. The customer experience has been a major focus from the beginning. Toyota's end goal for the RAV4 EV was a vehicle with drivability characteristics as close to the conventional V6 RAV4 as possible.

The electric RAV4 is initially being offered for sale late in the summer of 2012 exclusively in California, focusing on major metropolitan markets. Toyota expects to build and sell 2,600 RAV4 EVs over the next three years. The RAV4 EV will be built at Toyota's manufacturing plant in Woodstock, Ontario, while Tesla will build and supply the battery as well as other related powertrain parts and components.

The RAV4 EV has a 41.8 kWh lithium-ion battery pack that not only gives the vehicle exceptional range, it also powers the vehicle from 0-60 mph in just seven seconds in Sport mode. Due largely to the battery pack, the RAV4 EV weighs 470 pounds more than its V6 counterpart. But Toyota's engineers placed that weight low and toward the center of the vehicle to achieve an overall center of gravity similar to that of a sedan.

When plugged into a Level 2, 40-amp, 9.6-kW output charger, the RAV4 EV's battery pack can be fully replenished in as little as five hours. The vehicle comes equipped with a 120v charging cable for use when Level 2 charging is not available.

In preparation for the launch of Toyota's electric vehicles in the United States, including the second-generation RAV4 EV and Scion iQ EV, an open-access electric vehicle charging station opened at Toyota of Hollywood in 2011. Additional stations have been installed at Toyota of Santa Monica, Lexus of Santa Monica and at Fisker Santa Monica. All of these dealerships are owned by the same dealer group. The dealership charging stations are open to customers of all vehicle types with an electric charge port.

EV limitations, such as recharging time and limited range, continue to be barriers for consumers' willingness to consider the technology. While some consumers are willing to accept these limitations for the vehicle's smooth electric drivetrain and zero tailpipe emissions, this is only a small percentage of the market. EVs will be one option in our portfolio of advanced technologies, but not the solution for every customer.

Hydrogen Fuel Cell Hybrid Vehicles

Toyota believes that hydrogen holds great potential as a clean, renewable fuel. Our goal is to bring a Fuel Cell Hybrid Vehicle (FCHV) to market by 2015. To get there, Toyota researchers are continuing to develop the technology and are currently testing about 100 vehicles powered by hydrogen fuel cells.

During the 2012 North American International Auto Show, the FCV-R concept debuted. This concept model is a highly practical fuel cell vehicle (FCV). With the fuel cell unit located beneath the specially designed body, the vehicle can accommodate up to four passengers and boasts impressive luggage space. The fuel cell stack, with its 70 MPa high-pressure hydrogen tank, provides a cruising distance of approximately 435 miles (700 kilometers).

Toyota's FCHVs are powered by fuel cells that generate electricity from hydrogen. Hydrogen gas is fed into the fuel cell stack where it is combined with oxygen from air. The electricity produced by this chemical reaction is used to power the vehicle's electric motor and charge the battery. A fuel cell vehicle emits only water vapor; the exhaust contains no particulate matter, hydrocarbons or other pollutants.

In 2002, Toyota began a lease program for FCHVs in the U.S. and Japan with universities and corporate customers. Toyota has gathered millions of miles of on-the-road information about our FCHVs. For example, we carried out a road test in September 2007 along the Alaska- Canadian (ALCAN) Highway. Driving 2,300 miles (3,700 kilometers) between Fairbanks, Alaska, and Vancouver, British Columbia, the FCHV proved its ability to maintain consistent performance under demanding conditions.

Since the 2002 introduction of the first-generation FCHV, Toyota engineers have continued to improve the FCHV's range, durability and efficiency through advances in the fuel cell stack and the high-pressure hydrogen storage system, while achieving significant cost reductions in materials and manufacturing. The latest FCHV iteration, the FCHV-advanced (FCHV-adv), was introduced in 2008 and boasts an estimated range increase of more than 150 percent over the first-generation FCHV. The FCHV-adv fuel cell system features four compressed hydrogen fuel tanks, an electric motor, a nickel-metal hydride battery and a power control unit.

Toyota began delivering our latest-generation FCHV-adv to limited test customers in late 2008. To demonstrate the in-use driving range of this vehicle, Toyota conducted a driving range and fuel economy evaluation with engineers from the National Renewable Energy Laboratory and the Savannah River National Laboratory. Two FCHV-adv vehicles were instrumented, filled with hydrogen fuel and driven during a variety of driving conditions on a weekday from Torrance, California, to San Diego, then to Santa Monica and back. Both FCHVs completed the 332-mile (534-kilometer) trip with enough hydrogen left in the tanks to keep going an estimated 100 miles (160 kilometers). Fuel economy on the journey was approximately 68 miles per kilogram of hydrogen (109 kilometers per kilogram). (A kilogram of hydrogen is roughly the same energy equivalent as a gallon of gasoline.)

Toyota has deployed more than 100 FCHV-adv vehicles with universities, private companies and government agencies in both California and the New York metro area as part of a national demonstration program. Customers are using the vehicles for everyday tasks—commuting, driving around town for work, running errands—and are providing valuable feedback about their experiences. We placed 10 FCHV-adv vehicles in the fall of 2010 to support the new SunHydro solar-powered hydrogen fueling station located at Proton Energy Systems' headquarters in Wallingford, Connecticut. SunHydro is leading the development of hydrogen fueling stations along the East Coast that will make it possible to drive a fuel cell vehicle from Maine to Florida. When completed, the series of SunHydro stations will be the world's first privately-funded network of hydrogen fueling stations.

The demonstration program aims to increase awareness of fuel cell technology and spur development of much-needed infrastructure prior to the planned market introduction of the FCHV in 2015. Additional regions and partners will be added to the demonstration program as new hydrogen stations come online.

In the summer of 2012, Toyota began construction on the expansion of Toyota's Technical Training Center in Glen Burnie, Maryland, which serves Toyota's Central Atlantic region. When the expansion is complete in 2013, this facility will be Toyota's first technical training center in the United States with the majority of the required infrastructure established to train on future FCHVs. Currently, Toyota's FCHV-adv vehicles throughout the United States are serviced by engineering staff out of our engineering and development technical centers. When we bring a sedan-based FCHV to market in 2015, we will need to ensure dealership service center technicians are trained to work on this technology. With this center's expansion, we are getting a jump on the 2015 date by integrating special features that will allow an easy transition to hydrogen vehicle service.

Partnerships: Advancing Hydrogen Infrastructure

While fuel cell technology has advanced significantly over the last few years, fueling infrastructure must be in place for hydrogen-powered fuel cell vehicles to become a reality for consumers. By 2015, Japan has committed to building 100 hydrogen refueling stations, while Germany has committed to building 50. Hydrogen infrastructure is also growing in the United States, but additional stations are needed before mass market introduction in 2015.

Currently, there are only about 56 hydrogen stations in the United States, many with limited public access. This includes the first hydrogen fueling station fed directly from an active industrial hydrogen pipeline, which opened in 2011 in Torrance, California. Located adjacent to Toyota's U.S. sales and marketing headquarters campus, the station is a collaborative effort between Toyota, Air Products and Shell, and received funding assistance from the South Coast Air Quality Management District and the U.S. Department of Energy. Shell operates the facility, and Air Products provides on-site equipment, station maintenance and hydrogen gas through a pipeline from its plants in Wilmington and Carson, California. The station is used by Toyota and other manufacturers to fuel hydrogen fuel cell vehicles.

The University of California Irvine (UC Irvine) is collaborating with six automakers, including Toyota, to develop a comprehensive hydrogen station plan for California designed to meet the coverage required for initial commercial deployment of FCHVs. UC Irvine is using STREET (Spatially & Temporally Resolved Energy & Environment Tool), a systematic and highly detailed land-use based methodology that establishes and evaluates fuel infrastructure scenarios. UC Irvine is targeting three regions in Southern California: Santa Monica/West Los Angeles, Torrance and Beach Cities, and southern and coastal Orange County. With advanced planning, UC Irvine estimates that to service the initial market for fuel cell vehicles, coverage comparable to the existing gas station network would require between 11 and 14 percent the number of hydrogen stations. In order to launch the FCHV to the commercial market, this analysis identifies 68 strategically placed stations required to be operational by 2015.

Hydrogen Stations, Greater Los Angeles Area

Alternative Transportation Fuels

The availability and diversity of alternative transportation fuels plays a key role in helping countries realize their energy security and greenhouse gas reduction goals. The Energy Information Agency projects that the continued high price of petroleum will motivate some level of switching to alternative fuels, resulting in growth of renewable fuels at a faster rate than petroleum-based fuels. Alternatives to traditional gasoline and diesel fuels, such as ethanol, biodiesel, natural gas and electricity, are already in the marketplace in many parts of the world. Others, like hydrogen, cellulosic ethanol, other biohydrocarbons and various synthetic fuels, are on the horizon.

To help stakeholders better understand the benefits and challenges of fuels diversity, Toyota is participating in a National Petroleum Council study that will result in a report on the prospects of future transportation fuels through 2035, with views to 2050, for auto, truck, air, rail and waterborne transport. The study, requested by the Secretary of the Department of Energy, has four main objectives:

  • Address fuel demand, supply, infrastructure and technology in the context of U.S. objectives to protect the environment, promote economic growth and competitiveness, and support energy security.
  • Describe accelerated technology pathways to improved fuel efficiency, reduced environmental impact and deployment of alternative fuels at scale.
  • Deliver insights into potential policy options and investments that industry and government can take to accelerate the acceptance of alternative fuels, engines and vehicles.
  • Describe actions that industry and government can take to stimulate the technological advances and market conditions needed to reduce life-cycle GHG emissions in the U.S. transportation sector by 50% by 2050 relative to 2005 levels, while enhancing the nation's energy security and economic prosperity.

Although beneficial in many ways, fuels diversity challenges global auto manufacturers to design and build competitive vehicles with vastly different powertrains and operating characteristics. A number of Toyota's advanced technology vehicles are designed to use alternative fuels such as electricity and hydrogen.

Energy Sources for Toyota's Advanced Technology Vehicles

But the current lack of infrastructure for some of these fuels, particularly hydrogen for fuel cell hybrid vehicles and electric charging stations for electric vehicles, is one of the greatest obstacles to commercialization. Without convenient places to recharge or refuel, the mainstream consumer will be less willing to adopt these advanced technologies.

Through the California Fuel Cell Partnership (CaFCP), the California Plug-In Electric Vehicle Collaborative, and the Fuel Cell and Hydrogen Energy Association (FCHEA), Toyota is working with government agencies—including the U.S. Department of Energy—other auto manufacturers, utilities and other key stakeholders to support the development of necessary infrastructure for these vehicles. Our demonstration programs in North America play a key role in supporting infrastructure development by educating the public and stimulating the development of infrastructure to support deployment of our advanced technology vehicles.