Curbside Newsstand: Toyota Offers Free Access To Its Hybrid Patents – Too Little, Too Late?

Toyota is clearly feeling a bit anxious about how the EV winds are blowing. They took a huge gamble on pioneering their Hybrid Synergy Drive (“HSD”) in the Prius in 1997, and expanded its use in many of its other models to considerable success. And in the process, became the green darling of the automotive scene. No more, as Tesla has taken that mantle, and European and Chinese automakers race headlong towards mass implementation of full EVs threatening to turn hybrids into the automotive dodo bird.

Toyota gambled hugely on hybrids as a more cost-effective solution towards reduced emissions, and has become a laggard in EVs. Their fuel cell vehicles sell in minute amounts. In a last-ditch effort to expand hybrid technology to help stave off EVs a bit longer, Toyota is offering the patents to its technology for free and is willing to sell its hybrid components to any takers at reasonable prices.

Too little, too late?

Objectively speaking, hybrids are a relatively low-cost, low-risk way to reduce emissions considerably. And currently, Toyota is doing very well in Europe with its hybrids as an alternative to diesels. Currently 60% of its European sales are hybrids, and it offers hybrid versions in almost all its line except for RWD trucks.

But the situation in the US is quite different, as Prius sales have been falling badly for the past few years, down almost 25% in 2018. It’s no secret as to why: there’s two kinds of Prius buyers. Those committed to driving the lowest emitting vehicles have rapidly shifted to Teslas and other EVs, as for them, hybrids were always just an interim step to pure EVs. This also explains why plug-in hybrids haven’t made really significant progress either: buyers are not that wild about hauling around a complete IC drive train and a tank of gas when they’re only needed for longer trips. The demand by the green market seems to be almost purely for pure EVs, as seen by strong Tesla sales.

And the other segment of buyers were those who bought Prii during the years when gas prices were high, as the Prius was simply the most cost-effective car to drive, hence their popularity as taxis. But cheap gas prices have made that largely irrelevant, and the percentage of hybrid versions of other Toyotas in the US has also languished.

Toyota is hoping to win support from the Chinese government to encourage wider adoption of hybrids there, but China is by far the world’s leader in EVs, and it seems unlikely that Toyota will make substantial inroads there.

The other factor that hasn’t helped either is that conventional IC cars continue to improve their efficiency, narrowing the gap with hybrids.

The current global share of hybrids is about 3%. That’s actually not very much after two decades. It’s clearly stalled, at least for now. Meanwhile, EVs current global market share is already at 1.5% and rising rapidly. At the current trajectories, EV will eclipse hybrid sales within a couple of years. Whether Toyota can do anyhting about that seems a bit doubtful.