Toyota: Electrification loses spark

Toyota is betting the Prius C hybrid will draw budget-conscious buyers. Photo / Supplied

As carmakers rolled out new vehicles during the 2012 Detroit Auto Show at the beginning of this month, it was clear that electric vehicles no longer had the spark manufacturers wanted - and instead the focus has turned to high-tech internal-combustion engines.

At the 2007 Frankfurt show, there were dozens of hybrids and EVs.

This year in Detroit? "Less electrification hype," said analyst David Leiker of US firm Baird Equity Research.

That's partly because EVs and hybrids are no longer novelties, Leiker told industry website Autonews.

But there's a monetary reason, too. With stable petrol prices and fuel-efficient engines, the financial benefits of owning a hybrid have diminished.

Susan Cischke, a group vice-president at Ford USA, said the fuel-efficiency of advanced petrol engines rivals that of hybrids.

"Look at our EcoBoost engine [available now in New Zealand] - we're getting fuel economies that approach hybrids.

"So at some point you don't want to pick technology for technology's sake. You want to look at the performance.

"With an oil-based product, we can still do as well as with a hybrid."

Even some advocates are viewing electrification cautiously.

"I think it will be May or June before we know if this thing really has legs," General Motors vice-chairman Steve Girsky said of the staying power of the plug-in hybrid technology in the Holden Volt, which goes on sale in New Zealand later this year.

Consumer response to electrification has been tepid: even the least costly and most familiar form - hybrids - stayed at a 2 to 3 per cent share of the US market, although Toyota is betting that the Prius C hybrid, previewed at Detroit, will draw future budget-conscious buyers.

And in a press conference at the show, Renault-Nissan CEO Carlos Ghosn said the company had no second thoughts about the battery pack and EV capacity it is adding atAmerican factory this year.

Meanwhile, analyst Leiker wrote in a note to investors that, with advances in internal-combustion efficiency, "electrification is fading into the background".

Tesla pushes on

Tesla Motors says the production of its all-electric Model S sedan (pictured) won't be delayed by two top engineers leaving the company, despite shares plunging a record 19 per cent. "I'm highly confident we'll deliver at least 20,000 cars" in 2013, said Tesla chief executive Elon Musk.

Peter Rawlinson, vice-president and chief engineer, and Nick Sampson, who supervised vehicle and chassis engineering, have left.

Tesla, the recipient of a US$465 million ($580 million) United States loan to make advanced cars, is to begin Model S luxury-car production at its Fremont, California, plant by mid-year.