Toyota Looking at Natural Gas Automobiles

Toyota is dipping its toe in the natural-gas well.

The Japanese automaker said today that it plans to unveil a concept version of a compressed-natural-gas-powered Camry hybrid sedan at the L.A. Auto Show in November.

Toyota isn’t making any promises about when the CNG-powered hybrid car will arrive on dealer lots — if ever.
“We just decided from a concept perspective to put this out and take a look at CNG as another viable [alternative fuel] option” said Jana Hartline, a spokeswoman for the automaker.

Toyota is arriving a bit late to the CNG game. Honda has been selling out its 1,000-a-year production run of CNG-fueled Civics in recent years, and plans to double production for the 2009 model year to 2,000 cars.

The Civic GX is selling out even though its base sticker of around $25,000 represents a substantial premium over the comparable Civic LX ($18,155) or the even the Civic hybrid ($23,550).

In addition, finding fuel remains problematic. A government website that helps you locate alt-fuel outlets lists 94 CNG fueling stations within a 100-mile radius of downtown L.A., but many of those serve only government or corporate fleets and aren’t open to the public.

So what’s the attraction? Well, for one thing, CNG sells for the equivalent of $2 to $2.50 a gallon in Southern California. Not bad when regular gasoline is going for an average of $3.72 a gallon statewide. And with combined city/highway mileage of 28 mpg, the GX burns that cheap fuel at only a slightly faster rate than the regular Civic; the Civic hybrid, by contrast, gets 42 combined mpg.

Then there’s the $4,000 federal income tax credit, available at a time when tax credits on the most popular hybrids are going or gone altogether. And as you might have heard, GX owners are still eligible for carpool lane stickers in California.

Meanwhile, it wouldn’t hurt for Toyota to have something in the works in case voters approve Prop 10, the controversial ballot initiative backed by Texas oil billionaire T. Boone Pickens that could provide $10,000 rebates for purchasers of natural-gas-powered cars. (Pickens says Prop 10 will help put us on the road to energy independence; an L.A. Times editorial called it a “reprehensible scam.”)

But in the short term, at least, the potential market for CNG vehicles remains relatively small, which could explain Toyota’s cautious approach to what is a fairly well-proven technology. (Toyota actually offered a CNG-powered Camry for the 2000 model year, “but nobody bit,” Hartline said.)

California and New York are the only states where Honda puts any real sales muscle behind the GX. And even Honda concedes that driving one across country would require “very careful planning” to avoid that dreaded gasless feeling.

Toyota clearly remains committed to its hybrid "synergy drive" -- whether powered by gasoline, compressed natural gas or cold fusion -- as its green powertrain of choice for the immediate future.

The company continues to hint at plans to extend its segment-leading Prius brand name beyond its current five-door hatchback version. (A Prius minivan, anyone?) And in yet another announcement today, the company said it will cut the price of replacement batteries for both first- and second- generation Priuses by more than 10%.

The nickel metal hydride batteries for the 2000-03 versions will now go for $2,299; batteries for the 2004-2008 model have been reduced to $2,588. Batteries for both versions previously sold for $2,985.
California regulators require Toyota to offer hefty warranties on these batteries — eight years or 100,000 miles on the first generation and 10 years or 150,000 miles on the second gen. But Toyota and outside battery experts say failures have been rare, despite the dire warnings from early skeptics that unreliable batteries would be the downfall of hybrids.

“It is truly accurate to say that they are batteries that last the lifetime of the car,” said Felix Kramer, founder of CalCars.org, a Palo Alto-based advocacy group.

As the total number of Priuses sold in the U.S. surpasses 550,000, Toyota also said it may begin refurbishing NiMH batteries in North America to further lower replacement costs.