Toyota readies electric car offensive

DETROIT Mon Sep 13, 2010 9:28pm EDT

DETROIT (Reuters) - Toyota Motor Corp will offer a plug-in version of its Prius positioned to be the cheapest green car of its kind by 2012 and could have two electric cars in the U.S. market by that time, executives said on Monday.

In addition, Toyota plans to add six hybrid vehicles to its global lineup by 2012, an increase that would give it a total of 20 models that use batteries and regenerative braking to extend fuel economy like its market-leading Prius.

Toyota has taken a slower approach to rolling out all-electric and plug-in hybrid vehicles than rivals like Nissan Motor Co and General Motors Co.

But the product plans unveiled on Monday show how the world's largest automaker has been working to bounce back with a range of partly or all-electric cars in its largest market after setbacks with a series of damaging safety recalls.

In a challenge to GM's upcoming Volt, Toyota product development chief Takeshi Uchiyamada said the automaker would aim to have a plug-in version of its Prius priced "so close to the current version that customers really have to hesitate and think about it."

Toyota expects to begin selling a plug-in, rechargeable version of its Prius by June 2012. It expects to sell about 20,000 of the vehicles in the first year and to price the car at a $3,000 to $5,000 premium to the standard hybrid Prius, Toyota spokesman John Hanson said.

That would put the cost of a Prius that could be recharged at home to run on battery power for the first 13 miles at below $28,000.

By contrast, the Chevy Volt, which was designed with a battery-powered range of 40 miles, is selling for $41,000, a price that puts it into the category of luxury vehicles.

The Nissan all-electric Leaf claims a driving range of 100 miles. It has a U.S. retail price of $32,780.

"Over time, we would like to offer consumers the option of paying more for a bigger battery and longer range, but that won't be possible with the first version," said Uchiyamada, who headed the 1990s development program that launched the Prius.

Uchiyamada made the remarks to reporters at an appearance in Detroit on Monday.

He said that Toyota would offer a lower cost electric vehicle in 2012 for driving short distances. That small vehicle, which has been developed by Toyota's own engineers, is intended for urban car shoppers.

But at the same time, Toyota is racing to ready a battery-powered version of its RAV4 crossover vehicle using battery packs supplied by Tesla Motors Inc.

Tesla and Toyota announced a partnership in May to develop electric vehicles using technology from the California-based start-up.

Tesla is known for its $109,000 Roadster, which is powered by more than 6,000 laptop batteries stitched together in a complicated pack with a system to keep it from overheating.

Uchiyamada said it was not clear that the Tesla-based vehicle would be ready for launch in 2012 but he said initial work being led by Toyota engineers at its U.S. affiliate had been encouraging.

"The engineers say the early development has been very encouraging," said Uchiyamada.

Toyota will show off the RAV4 prototype at the Los Angeles auto show in November, he said.

Unlike Toyota's electric city car, the Tesla-based electric people mover will be designed to travel longer distances with a bigger battery and a much higher sticker price, he said.

"I don't think consumers will be confused by the two offerings," he said.

He added that Toyota hoped to learn from Tesla's fast-moving, Silicon Valley style and use that to re-energize its own operations.

"People have said that Japanese companies are slow to make decisions and even among that group, Toyota is slow," he said.

Since last year Toyota has recalled more than 8 million vehicles for potentially dangerous problems with sticky accelerator pedals and loose floormats.

Uchiyamada said the safety crisis had forced Toyota to reform its vehicle development, spending another month on engineering on average and sending more staff to the field to examine reported defects.

Toyota has also set up a team of 100 engineers to audit quality from a driver's perspective. "The biggest change is that we are getting information much faster than before," Uchiyamada said.

(Reporting by Kevin Krolicki, editing by Leslie Gevirtz and Carol Bishopric)