Memorandum from Toyota (GB) Plc
1. Toyota is the world's third largest automobile
manufacturer, producing over 4.5 million vehicles each yearequivalent
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
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 cycleresearch 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
technologythe 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 powerfuel
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 Pirusthe
world's first mass-produced hybrid vehicle and one which, we are
delighted to say, has attracted vital support from the Powershift
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
usethey 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 networkHybrid
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
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 servicethe "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
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
23. As our evidence sets out, hybrid vehicles
such as the Prius are already in widespread usethey 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.
1 Environmental Audit Select Committee 2000/2001 Second
Report The Pre-Budget Report 2000: Fuelling the Budget 5 March
2000 http//www.parliament.the-stationery-office.co.uk/pa/cm200001/cmselect/cmenvaud/71/7102.htm. Back