Select Committee on Environmental Audit Second Report


Memorandum from Toyota (GB) Plc


  1.  Toyota is the world's third largest automobile manufacturer, producing over 4.5 million vehicles each year—equivalent to one every six seconds. Toyota vehicles are manufactured in 55 plants in 25 countries and marketed in over 160 countries worldwide. Within the UK we have invested over £1.6 billion, with a car plant in Burnaston, Derbyshire dedicated to producing over 220,000 vehicles per annum as well as an engine plant in Deeside which produces 130,000 units each year. 80 per cent of vehicles produced in the UK are exported, predominantly to the rest of Europe.

  2.  Toyota (GB) Plc is the importer and distributor for Toyota and Lexus vehicles in the UK and is responsible for sales, marketing, after-sales and customer satisfaction. Sales are managed throughout England, Wales, Scotland and Northern Ireland by a network of over 220 Toyota and 47 dedicated Lexus sales centres. We currently offer the UK's widest product range comprising 14 different vehicles as well as six Lexus models. Just under 100,000 of our cars are sold in the UK each year giving us a market share of around 4 per cent which makes Toyota/Lexus the eighth best selling manufacturer in the UK.


  3.  Toyota regards the protection of the global environmental as one of its main priorities. We are committed to developing technologies which minimise the impact of vehicles on the environment which means both reducing emissions and minimising the resources used in production and operation. We are striving for "zero emissions" at every stage of the vehicle's life cycle—research and development, design, production, use and disposal.

  4.  To achieve the "ultimate eco-car", we are constantly evaluating all technologies. Our current range of engines reflects this philosophy. Our VVT-i direct injection petrol engines are "intelligent", delivering power as well as outstanding fuel economy. Combined with our catalytic technology—the De-NOx petrol catalytic converter and the recently announced DPNR (Diesel Particulate and NOx Reduction catalytic converter)—these engines are also very clean.

  5.  Toyota has also initiated research on a wide range of fuel sources such as natural gas, liquid hydrogen, clean hydrocarbon fuel and the next generation of power—fuel cells. Although these approaches open up several possibilities for fuel selection, we believe that, in terms of cleanliness and efficiency, fuel-cell vehicles that directly employ hydrogen will be the mainstay of the future.

  6.  However, as part of the development of fuel cell vehicles and in order to help meet global ambitions for cleaner, more efficient vehicles, Toyota has been developing petrol-electric hybrids. This has resulted in the Pirus—the world's first mass-produced hybrid vehicle and one which, we are delighted to say, has attracted vital support from the Powershift programme.


  7.  The cornerstone of Toyota's environmental strategy is hybrid. Hybrids combine advanced petrol engines with electric motors to deliver outstanding fuel consumption and emission levels (especially in urban cycle) without sacrificing performance or comfort. Hybrid vehicles such as the Prius are already in widespread use—they are not experimental or concept cars.

  8.  Fuel consumption (and thus CO2) is 50 per cent below equivalent, conventionally powered vehicles whilst emissions are already 50 per cent below Euro four (which does not come into force until 2005). Hybrid does not require a dedicated re-fuelling infrastructure nor does it reduce power or space within the vehicle. In addition, as it is "self-charging" it eliminates the major problem associated with electric vehicles; the need to charge the batteries overnight. We are developing plans to have Hybrid available in all our mainstream models and to have ten per cent of our sales in Europe as Hybrid by 2010.

  9.  Prius represents a significant investment in the future by Toyota. Having already invested billions in its development, it is sold at a subsidised price to develop public confidence and acceptance of this ground-breaking technology. This investment also extends to the way Prius is sold and supported. Because of its technological complexity, a specialist dealer network—Hybrid Technology Centres (HTCs)—have been established. Not only do these centres have the requisite technical training and diagnostic equipment, they have also been independently audited to ensure they achieve the very highest degree of environmental standards in all their work.

  10.  No other manufacturer in the world has equivalent technology, but its development is significant for all future powertrains. Although currently combined with a petrol engine, hybrid can be readily adapted to work in conjunction with other sources of energy including diesel and, most notably, fuel cells. We announced earlier this year the summer rollout of our latest Fuel Cell Electric Vehicle (FCEV). This vehicle uses hybrid technology and the fuel cell element will ultimately replace the petrol engine within the Prius. Hence the hybrid technology is, in many respects, the major technological breakthrough for the future.

  11.  Toyota has been working closely with the DTLR, its predecessor and the Energy Saving Trust to increase the take up of clean fuel vehicles. Prius customers currently benefit from a £1000 rebate on the purchase price through the Powershift programme. The scheme has been extremely successful with over 800 Pirus customers receiving the award. More importantly, however, the scheme has been mutually beneficial as it has not only boosted sales but also recognition of both Powershift and the benefits of "green" vehicles.

  12.  We believe it is critically important that the Government increases its support for hybrids. Hybrids like Prius are perfectly placed to contribute to the reductions in climate change, poor air quality and noise pollution sought by Government especially in Air Quality Management Areas. They are also present day test-beds for technology that supports the evolution of fuel cell vehicles. Government support through initiatives such as Powershift not only encourage market acceptance of this ground-breaking technology but also helps off-set the price premium associated with this new and complex technology.

  13.  Pending the outcome of the "Powering Future Vehicles" consultation, Toyota would argue that there is a continuing role for Powershift in supporting hybrids and that additional measures of specific support should be identified as part of its re-focused future.


  14.  At present the electric vehicle is not a viable alternative to the conventional automobile. Charging time, range, speed and re-charging facilities are still issues which need to be resolved. Toyota has been involved with electric vehicles since 1971. Since then, they have become more efficient, using powerful permanent magnet motors and regenerative braking systems that retrieve electricity from the kinetic energy generated when the vehicle decelerates or brakes.

  15.  We are working to make these vehicles more popular. Replacing lead acid batteries with nickel-metal hydride has made them longer lasting and maintenance free. Our popular "RAV4" has been undergoing trials in Jersey with an electric motor which has a range of 200km and a top speed of 120km/hour. In Japan, a combination of Internet technology and satellite navigation has led to the creation of an electric vehicle commuter service—the "crayon".

  16.  Despite these technological advances, other challenges still remain. Apart from the obvious limitations of the vehicles themselves in range and infrastructure, they are dependent on electricity generation which, for the UK, is predominantly the result of burning (finite) fossil fuels whether they be coal or the cleaner gas.

  17.  The future of electric vehicles will be in urban areas with poor environmental conditions. However, apart from specialist vehicles working a fixed route, the benefits of electric vehicles are likely to be most practically realised in the development in hybrids and it is to this area that Government should give particular attention to incentives.


  18.  All new vehicles registered after 1 March 2001 have been subject to a graduated VED rate, based on CO2 emissions in terms of grams per kilometre driven. The new car VED rates range from £90 to £160. The lowest vehicle band width is cars up to 150 g/km, with the reduced VED rate of £90, just ten pounds cheaper than the standard rate of £100. the maximum CO2 emissions (185 g/km) is subject to the maximum VED rate of £160 per annum.

  19.  Under current rules, purchasers of hybrid vehicles, which use petrol fuels, do not gain appropriate benefits for purchasing a vehicle with these substantially reduced CO2 emissions. This contrasts with the purchasers of dual-fuel LGP vehicles which have only marginal CO2 emission benefits yet benefit from Government supported fuel price incentives.

  20.  Toyota believes that the hybrid vehicles should receive greater fiscal incentives. We would propose the introduction of a further VED band, especially for hybrid vehicles with a significantly reduced VED rate of £30, compared with a standard rate of £100. Such recognition of the performance benefits of hybrid vehicles would send a clear signal to motorists that there are real fiscal benefits in buying greener technology and would compare more favourably with incentives given to other environmentally friendly vehicles.


  21.  Toyota was encouraged by the Environmental Audit Committee's support for positive fiscal incentives to bring new fuels to the market, in recommendations and conclusions contained within its 2001 report "The Pre-budget Report 2000: Fuelling the Debate"[1].

  22.  We are, however, concerned that the Committee's focus in its previous report on "the key stages of evolution that the motor car will undergo in the future: ultra clean vehicles by 2005. . . and then to carbon free emission with hydrogen" risks deflecting attention away from significant short term environmental gains that can be made through supporting hybrid technology.

  23.  As our evidence sets out, hybrid vehicles such as the Prius are already in widespread use—they are not experimental or concept cars. Hybrid technology in cars such as Prius offer performance comparable to conventional cars, require no special infrastructure (unlike electric vehicles), and deliver substantial environmental results. The car is also affordable and, with the right incentives for consumers, could gain greater mass market acceptance. However, Toyota believes that Government support is critical if we are to avoid such new technologies being viewed as niche products for use by environmental enthusiasts rather than a stepping stone to the future.

  24.  Toyota believes that if the Government wants to make rapid progress towards its environmental objectives, then it must significantly fund innovative technology now through further tangible initiatives. These should transcend the valuable, yet limited support that has been offered through the Powershift initiative and the narrow differential in Vehicle Excise Duty.

  25.  We hope that our submission is clear and helpful. Toyota would appreciate the opportunity to discuss our support for the continued role, and extension of Powershift's support for hybrids, and proposals on further VED reform, both with Government and the Environmental Audit Select Committee.

November 2001

1   Environmental Audit Select Committee 2000/2001 Second Report The Pre-Budget Report 2000: Fuelling the Budget 5 March 2000 http// Back

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