Toyota pulls plug on plug-in hybrid deposits

Remember that Palo Alto Toyota dealer we told you about last week who was taking $500 deposits for a plug-in hybrid that's not on the market yet?
Well, Toyota got wind of it and basically said: "Cut it out."

But that isn't stopping Toyota San Luis Obispo. Sales manager Matt Meyer said the dealership plans to keep taking deposits on plug-in hybrids as long as its customers are willing to plunk them down.

"I've got a few people in town who wanted to come in and leave deposits" on a plug-in hybrid, said Meyer, even though it could be "two years, five years or 10 years" before the car actually goes on sale to the public. "I'm not going to tell them 'No,' because I don't tell my customers 'No.' "

Meyer said he started taking the deposits to keep customers from driving north to pay $500 to get on the waiting list at Magnussen’s Toyota of Palo Alto. It was the Silicon Valley dealership's deposit program that originally attracted the attention of the automaker.

"We asked the folks at Magnussen to back off a little bit," Toyota spokesman Irv Miller said. "Let us get our product to market and figure out where we're going with it before we start putting the cart in front of the horse."

Eric Doebert, business development manager at Magnussen’s, said the dealership will refund the deposits of the 25 or so customers who had paid them. The deposit program has been replaced by a non-paying waiting list, which has grown to 44 people.

"There is a lot of uncertainty at this time" about when the cars will actually be available to the public, Doebert said, and Toyota "asked us to return the deposits in everyone's best interests."

Miller, who wrote about the issue on Toyota's Open Road blog, said the automaker hadn't received any complaints about the Palo Alto deposit program. Told that the San Luis Obispo dealer was running a similar program, Miller said he would look into the matter.

The practice doesn't sit well with Sacramento consumer advocate Rosemary Shahan.

"$500 tied up indefinitely? Sounds like a boondoggle to me," Shahan said. "It's like making an interest-free loan to the dealer."

Toyota has announced plans to begin delivering plug-in hybrids to corporate and municipal fleet operators by the end of next year as part of what will eventually be an extensive road-test. The automaker hasn't said when the cars, prized for their anticipated ability to travel up to 10 miles on electric power alone, will actually be in showrooms.

Doebert said last week that the dealership started the deposit program because it was getting so many inquiries from its Silicon Valley-area customers. Both Doebert and Meyer said the deposits were accepted with the understanding that customers could get their money back at any time if they got tired of waiting for the plug-in hybrids to materialize.

And if Toyota asks the folks in San Luis Obispo to cease and desist? "That would be a call the dealer would make, not me," Meyer said.

-- Martin Zimmerman

Photo courtesy of j/f/photos from Flickr

Comments

[kerry bradshaw]

"The automaker hasn't said when the cars, prized for their anticipated ability to travel up to 10 miles on electric power alone, will actually be in showrooms."
Is he kidding? 10 miles of electric range? What's to be prized about that. That's absurd.

[Figgins]

Please tell me that the mileage stated in the article is a typo. Who would buy a hybrid that can only go ten (10) miles on electricity alone?

[Roger]

Wonder if the Dutch and their lithium-ion battery powered electric car (0-60 in less than 5 seconds, 200 mile range) will affect the Prius?All the electrical/electronic technology exists -- and has existed for at least 20 years to my personal knowledge. What's holding all this up now that there appears to be a viable, high-capacity battery?

[Hb]

TEN miles on battery? That's pathetic! Even the Volt is probably going to do better than that!

[robert r]

Well since Toyota just announced the plug-in hybrid today or yesterday and that it would be available in early 2009 I would say the people who put the deposit down - as opposed to people who are waiting 3 to 6 months and paying $4K over msrp - are sitting rather pretty.
Getting a plug-in will certainly be a supply/demand equation like no other.

I own diesel VWs and run them on waste oil based BioDiesel but if I could buy 2 plug-ins tomorrow ... Bye, Bye VWs . I'd keep one for those 1800 mile trips I make but for around town...

Where do I put down 2 deposits ?

[Mike P]

Toyota has always been handicapped by the greed and shenanigans of its dealers. I remember shopping for a Toyota pickup in 1993, and found that some dealers in my area did not have MSRP window stickers in their vehicles. They would give you the MSRP verbally - which was probably determined by how much of a shmuck the customer seemed to be. What a fraud. You would think Toyota would be more protective of their image, and reign in this sort of thing. Their product is absolutely the best available, and they could be even more sucessful if not for all the games being played at the retail level.

Of course, it takes a willing nitwit to make a con job work, and as long as simple minded types are willing to put up cash deposits to be on a "waiting list" for a product that may never be available, everybody loses except your local Toyota dealer. Buyer beware and try to be smart.

[Rob McMillin]

Roger -- the holdup is getting a battery that doesn't explode. Lithium-ion technology is very energy-dense, but it can catch fire or worse at times. Saying the technology has existed for 20 years ignores the critical details; those batteries have to work in cold-weather climates, hot-weather climates, have a good range, not be too expensive, and a whole host of other considerations. We're probably getting closer to something that's workable, but the fact that Toyota, a company whose reputation is all about quality and durability, is still reticent to produce a vehicle is telling.

[Darrin Spang]

Let's hope the "10 miles on electric" was a typo. If not, then this surely must be a joke on the consumer.
Rob M, you have a great point, which is that the battery must perform in many environments and be reliable.

So many people talk about battery power, but don't have a clue about how it will work in the real world. Real world means cold weather, running the heater. Hot weather running the AC. Playing a stereo. Climbing hills. Carrying loads, such as multiple people, items in the trunk, etc. Under load, a battery will have a very short useful life.

Anyone have a laptop more than 2 years old? Usually the battery fails completely, or has it's useful life reduced to about 10% of what it was originally. I'd like to see a dealer tell a customer of a 2 year old Toyota that they need to replace the battery, at a cost of $6000.

[Darrin Spang]

As for taking deposits for a car that is years away from release?? IF it is ever released? Well it shouldn't be legal. It definitely is NOT ethical. Toyota, stop the dealers from poor business practices such as this.

[Dan]

Since there are already kits for the Prius that turn it into a plug in hybrid that give you 20 miles of all electric range I wonder why the dealer just does not offer Prius's with the kit installed by their service shop.

[Martin Zimmerman]

That is not a typo. Don’t confuse plug-in hybrids – which in some cases will have fairly limited electric-only ranges – with electric cars, which will travel exclusively on electricity. Toyota has been very conservative in its projections about the electric-only range it expects to achieve with its first PHEV. That range ultimately may prove to be greater than 10 miles, but we won’t know until the cars are actually rolling off the assembly line. One hint to Toyota’s likely range target: California’s air quality regulators are proposing that vehicles that achieve the equivalent of 10 miles all-electric driving range be designated as zero-emission vehicles.

(By the way, when I was in Japan last year touring Toyota’s advanced powertrain labs, engineers there were clearly skeptical of GM’s claims that the Volt will have a 40-mile all-electric range. I saw that as an indication of what Toyota thinks is currently achievable with lithium ion batteries — at least the ones they’re developing.)

The trade-off between all-electric range and vehicle cost is one of the key questions in PHEV development. Longer ranges require bigger and/or more advanced batteries, which will cost more. How much more are consumers willing to pay for a car that delivers a short-lived buzz of all-electric driving, but operates most of the time as a “conventional” gas-electric hybrid? That’s what the automakers have to figure out.
- Martin Zimmerman

[radiocycle]

Well, I live on the central coast and I just got on the PHEV deposit list at the local dealership. Can't wait to plug in! Even though Magnussen is giving back the deposits not all dealers are.

[Krish]

Yes, the 10 miles with just the electrical power sounds low. But that needs to be looked at in proper context.

In a modern car, a fully charged battery in good condition would last just under 2 hours if it is disconnected from the alternator.

In other words, without the benefit of charging, that is the current state of the technology. And this is for a battery that is not driving the vehicle, or even anything mechanical, or even any of the high loads in the car such as seat warmers etc. This estimated 2 hour life is just for driving the spark plugs it appears.

Now, that 10 miles doesn't look too bad, does it? Also, keep in mind that although for longer trips the engine necessarily needs to kick in, it can snooze back in the all electric mode for extended periods now and then. Those periods will not count towards your mpg calculations, and in that sense they will be pollution free. That's how they are able to achieve even 100mpg ratings, of which 60miles may be combined power and 40 miles may be all electric mode.