TOKYO -- When Toyota Motor Corp. set out to develop and build the Prius hybrid car, there was no supplier base of hybrid-component manufacturers to support the effort.
So the carmaker took a typically Toyota approach to the problem. It developed and made the components in-house.
Toyota doesn't still do 100 percent of the work in-house, says Kazuo Okamoto, Toyota's executive vice president in charge of research and development. But it comes close.
"To say 100 percent would be too much. Aisin AW, other Aisin Group companies, and other parts makers are contributing. But the main source is Toyota," he says.
"This is technology you can't buy," he says.
One area where Toyota turned to a supplier was for the batteries. Panasonic EV Energy Co. got the order.
Toyota and consumer electronics giant Matsushita Electric Industrial Co. had set up Panasonic EV in December 1996. Matsushita owned 60 percent and Toyota held 40 percent of the battery maker. Matsushita makes products bearing the Panasonic and National brands.
Panasonic EV's mission then was to make batteries for electric cars. Non-polluting electric cars at the time seemed the only way to meet California's severe zero-emissions rules.
At an October 1996 electric vehicle conference in Osaka, Toyota's then-chairman Shoichiro Toyoda praised electric vehicles. They were particularly well-suited, he said, for using electricity from non-polluting sources such as nuclear power plants.
Electric cars never took off, but the hybrid Prius did. With Panasonic EV's batteries proving crucial to Toyota's hybrid vehicle plans, Toyota decided to exert more control over the supplier. Last October, Toyota said it would boost its stake in Panasonic EV to 60 percent.
Only last year, when Toyota found demand far outstripped its ability to keep up, did the carmaker turn to outside suppliers for help. It began asking Denso Corp. and other members of the Toyota Group to join it in making certain components for hybrid vehicles. Their output would be in addition to, not instead of, Toyota's own.
Even now, Toyota makes the motor-generator power-split device, power module, inverter and brake regeneration controller for the Prius in-house.
Toyota thus controls its own fate, and has been able to push through a number of improvements in the technology. Toyota is now on the second-generation of its hybrid powerplant. A third-generation version appears imminent. But the self-reliant approach also means Toyota is bearing almost all the costs alone.
"Making inexpensive products is hard," says Okamoto. "With a new technology, you're constantly working on reducing costs."
You may e-mail James B. Treece at jtreece@crain.com
