View profile

The Age of Sustainability - Toyota’s Disastrous Political Entrepreneurship

The Age of Sustainability - Toyota’s Disastrous Political Entrepreneurship
By Denis Pombriant • Issue #17 • View online
Toyota’s best move right now is to stop some ruinous practices that are about to seriously tarnish a good brand.

There was a somewhat disturbing article in the New York Times about Toyota acting as a drag on the move to battery-powered electric cars throughout the world. Ironically, the piece also demonstrates the unstoppable force that electric driving now has, virtually assuring its success.
To put it simply, Toyota bet on the wrong horse, preferring hydrogen fuel cells as the source of electricity rather than more conventional batteries. The company now has a huge sunk investment in hydrogen and, according to the article, has only sold about 8 thousand units since 2014. 
The success of any new car technology, be it fuel cells or batteries, is completely dependent on refueling. There are roughly 160,000 gas stations in North America and a few more in Europe; the landscape is littered with them. But few of them are suitable to transforming into gas-plus-hydrogen or gas-plus-battery-charging places. However, electricity has the innate advantage of enabling every home to be its own charging station until a national network gets built. 
Against that reality it seems Toyota bet wrong. Not to worry though, when invention and entrepreneurship fail, companies fall back on the time-honored technique of legislative entrepreneurship. That’s when they engage lobbyists in selling day for night to elected officials which appears to be what Toyota is attempting.
According to the Times, 
“The recent push in Washington follows Toyota’s worldwide efforts — in markets including the United States, the United Kingdom, the European Union and Australia — to oppose stricter car emissions standards or fight electric vehicle mandates. 
Because Toyota bet wrong on fuel cells it needs time to catch-up with the battery-powered car makers but catch-up for Toyota means slow down for everyone else. All this leads back to Toyota being one of the largest donors to conservative candidates in the recent election cycle. Said the Times,
“Toyota’s lobbying also comes as the Japanese automaker’s political donations have come under scrutiny. Last month, the nonprofit watchdog Citizens for Responsibility and Ethics tallied campaign contributions and found that Toyota was the largest corporate donor by far this year to Republicans in Congress who disputed the 2020 presidential election result.
According to a New York Times analysis, at least 22 of those lawmakers have also denied the scientific consensus on human-caused climate change.
Believe it or not, that’s good news because we’ve crossed a threshold. On one side was a concern that electric cars could ever be practical but Tesla and a few others (but mostly Tesla) proved the point. The other side of the threshold deals with how we can get a lot of electric cars on the road as quickly as possible and producers like Ford, GM, Volvo, Volkswagen, and many others have taken up the challenge. 
The main issue has been car range and recharging. The carmakers have responded with batteries that will run a car for well more than 200 miles without recharging and entrepreneurs have come to market with acceptable charging stations for home use. Free charging is also springing up in parking lots. Also, the Biden administration is proposing a half-million-unit national charging station network which would need to be developed no matter what to make electric driving completely comparable to driving on dinosaurs. Some car companies (Tesla, Volkswagen and others) are also getting into the act. One can only hope there’s plug compatibility among all of them.
There’s more good news too. Not only has electric driving been proven, it’s looking to be such a big market that there are grifters lining up to sell inferior goods. The most obvious proof is the number of companies like Toyota looking to influence the rollout. That news is good because there’s a direct ratio of grifters to good guys that favors good guys until regulators catch up.
This happens all the time. Back in the 1860’s railroad owners were all over Abraham Lincoln and members of congress like flies on a meadow muffin when he had to choose a standard gauge for railroad tracks running coast to coast. As if they had nothing else to do. The railroad owners knew that the national standard would become, well, the national standard. If their preferred track gauge became the standard, it would mean a windfall because rolling stock and existing tracks would not need to be upgraded.
Toyota’s tempest-in-a-teapot has more serious ramifications. If you haven’t noticed, car exhaust is the primary cause of global warming, right behind electricity generation. The US has about 280 million cars on the road, more than enough for every driver and life expectancy for a new car can reach upwards of 20 years or longer these days thanks to optimizations like computer enhanced ignition and lead-free gas. So, there’s no time to put off electric driving especially now that the stars are aligning.
I feel bad for Toyota that they bet on hydrogen rather than batteries but in my experience, that bet was more about wishful thinking than science or economics. Ultimately this is how the free market should work, good ideas get rewarded and there is often no silver medal. Large corporations may talk a good game about free markets though they like corporate welfare better and the legislative entrepreneurship that enables it. 
Toyota’s best move right now isn’t to simply ditch hydrogen or even to adopt battery technology. Their best move is to stop the ruinous practices that are about to seriously tarnish a good brand.
Toyota Led on Clean Cars. Now Critics Say It Works to Delay Them. - The New York Times
Did you enjoy this issue?
Denis Pombriant

Starting with root causes a full discussion of what's ailing climate and what we can and are doing to fix it. There is so much news about solutions every day that this will give hope to even the most cynical.

In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue
Denis@BeagleResearch.com