Hybrid Electric Vehicles (HEV) in the US Market: Toyota and Nissan Start Production of HEVs.
GM, DCX and BMW will each launch their SUV equipped with a jointly developed hybrid system between 2007 and 2009

  The USA is expected to be the biggest market for HEVs. 210,000 HEVs were sold in the country in 2005 and the number is forecast to expand to roughly 500,000 by 2010.

  Nine full HEV models are available on the USA market in October 2006 and we will see more than 30 such models competing in the market by 2009.

  Nissan will join the HEV market in the USA in early 2007 and Mazda in spring 2007. Nissan will introduce the Altima Hybrid into the eight states which have adopted the California emissions standards. Mazda will sell the CX-5 (Tribute) Hybrid, which is based on the Ford Escape Hybrid and supplied by the American automaker.

  Toyota is currently selling five HEV models in the USA - the Prius (HEV-only model), the Camry Hybrid (medium-sized car), the Lexus GS 450h (upper-class car), and the Lexus RX 400h/Highlander Hybrid (SUV each) - and will add the Lexus LS 600h (luxury car) in 2007. Sports car models and minivan models will also have HEV versions in their lineup in the future.

  Honda, the second biggest seller of HEVs in the USA, has the Civic Hybrid and Accord Hybrid on the market. But the automaker has decided not to develop HEVs with large engine displacement and will focus on developing smaller HEVs than the Civic Hybrid

  Ford will add HEV versions to two medium-sized car models, two large car models and two crossover models, and expects the total production of the HEVs to reach 250,000 by 2010. The automaker has announced its intention to work on alternative fuel vehicles as well.

  GM has developed two-mode hybrid transmission (electronically-controlled CVT with electric motor to be used in HEVs, packaged in the same size as normal AT) jointly with DaimlerChrysler (DCX) and BMW. GM will put the transmission in SUV models and pickup models in 2007, DCX in Dodge brand SUV models in 2008 and BMW in its USA-manufactured SUV models in 2009.

  Porsche and VW are jointly developing parallel hybrid system and will put it in luxury SUV models to be released in the USA market in 2008 or 2009.

■Toyota: started to produce the Camry Hybrid in the USA. Developing plug-in HEV.

  Toyota started to produce the Camry Hybrid at Kentucky plant in the USA in October 2006. The production capacity is 48,000 a year. The Kentucky plant will get the main components of the hybrid system from Japan for its own production as well as for supply to Nissan's Smyrna plant in the USA for the Altima Hybrid, which will be produced in early 2007.

  The Camry Hybrid, before its USA production, was imported from Japan and its sales began in the USA in May 2006. The model's cumulative sales amounted to 23,000 (monthly average of 4,600) by the end of September 2006, the second biggest HEV seller after the Prius (monthly average of 8,500).

  The automaker will expand the number of models with a HEV version and plans to sell roughly one million HEVs a year in the world by 2012 by curbing the price difference between the HEV version and the base model to around 200,000 Yen.

  The successor to the current Prius, a main HEV model, will come equipped with the THS III with new lithium-ion battery and enlarged 1.8 liter engine. The new model is expected to appear in autumn 2008 at the earliest but the timing could be delayed to 2009 or 2010 if it comes out as the plug-in HEV (PHEV), which is currently under development. The new model, if it comes equipped with the plug-in system which allows the model to be charged at home, can run on motor alone in city driving like an EV (the current Japanese and European specification Prius allows the model to be switched on manually and to run like an EV but its driving range is limited. If the battery charge is low, it will further dent the range).

■Fuji Heavy Industries: its hybrid models launching plan for the USA market

(calendar year)

		2006	2007	2008	2009
sedan	Legacy Hybrid				New Model

Note:

Toyota and Fuji Heavy Industries announced in March 2006 that they had agreed to develop a Subaru brand HEV based on the Toyota's hybrid system. As a result, Fuji Heavy Industries has suspended its plan to introduce a HEV model developed on its own, and has withdrawn from the NEC Lamilion Energy, Ltd., a joint venture established with NEC in 2002 to develop, manufacture and sell lithium-ion battery for HEVs.

■Incentives, eligible up to a certain sales volume of models, were introduced for HEV purchasers. The purchasers of Toyota-made HEVs will no longer be eligible for them come September 2007.

  New incentives were introduced for HEV purchasers in the USA in 2006. The purchasers can apply for a tax deduction, whose amount is set for each HEV model, from their federal income tax. However, if the 2006 cumulative HEV sales of an automaker exceeds 60,000 vehicles, the tax deduction for the automaker's models will be decreased.

  Toyota's HEV sales went over the 60,000 mark in June 2006 and as a result the tax deduction for those who purchased them after October 2006 will be halved. It will further be halved in April 2007 and the Toyota-made HEV purchasers will no longer be able to enjoy the benefit from the beginning of October 2007.

■Nissan: introducing the USA-made Altima Hybrid in 2007. Developing its own HEV.

  In early 2007, Nissan will start selling the Altima Hybrid which combines the hybrid system based on the Toyota's THS II and Nissan's petrol engine. It is going to be produced at the Smyrna plant in the USA.

  Nissan is developing its own HEV and plans to put it on the market by 2010.

■Honda: putting the hybrid system mainly in cars with small engines

  Honda plans to improve the IMA (Integrated Motor Assist), which is parallel hybrid system. The IMA installed in the Civic Hybrid, which was put on the market in 2005, has motor assist function for the start-up and allows the car to run on motor alone like an EV at low and stable speed, by deactivating the engine in all cylinders.

  In order to reduce CO2 emissions, cars with small engines will receive the hybrid system, and cars with over 2.0 liter engines will get a diesel engine. For instance, the current Accord whose HEV version is not selling well, will no longer have a HEV version when the model is restyled, and will, instead, likely get a four cylinder 2.2 diesel engine or a V6 diesel engine, both of which are under development.

  In 2009, Honda will put on the USA market a new HEV-only model for family use, which comes between the Fit and the Civic in size, and aims to sell 100,000 a year, a similar sales volume to the Prius.

■GM, DCX and BMW: jointly developed an improved version of the two-mode hybrid system

■GM: producing two-mode hybrid transmission in early 2007

  In early 2007, GM will start to produce two-mode hybrid transmissions, a component of the two-mode hybrid system which was jointly developed with DaimlerChrysler (DCX) and BMW. The first component to be produced is for FR models and will be installed in full size SUVs, gradually spreading to other models. 40,000 a year will be produced. Some of them will be supplied to DCX and BMW as well.

■GM, DCX and BMW unveiled two-mode hybrid transmission developed between them

In April 2006, GM, DaimlerChrysler and BMW unveiled a component of the two-mode hybrid system (series/parallel) which was jointly developed between them.

It is called two-mode hybrid transmission (or two-mode transmission for short) which has completely integrated electronically-controlled CVT (ECVT) - composed of electric motor and planetary gears - and a fixed gear transmission. It was developed for FR vehicles and 4WD vehicles based on FR. It is about the same as normal AT for FR vehicles in shape and size. A similar component for FF vehicles will be developed as well in the future.

The two-mode hybrid transmission will be produced at GM's Baltimore, Maryland, transmission plant in early 2007 and will be installed in the Chevrolet Tahoe Hybrid/GMC Yukon Hybrid. GM invested 118 million dollars into the plant for the transmission.

The newly developed two-mode hybrid transmission features a combination of ECVT, which has low-speed and high-speed modes as in the conventional type, with four stage fixed gear transmission.   ECVT requires an electric motor to be bigger as engine size increases. However, with the adoption of fixed gear transmission, electric motor is no longer influenced by engine size and can be installed in a variety of models with different engine sizes.

Sources: GM/DaimlerChrysler News Release 2006.04.28, etc.

Note:

GM and DCX came to a basic agreement to jointly develop full hybrid system in December 2004 (final agreement reached in August 2005). BMW joined the two companies in September 2005 (the three way cooperation is called Global Hybrid Cooperation by the automakers). They set up GM, DaimlerChrysler and BMW Hybrid Development Center at Troy, Michigan, and are engaged in a system development based on the two-mode hybrid sytem patented by GM.

■GM: its hybrid models a launching plan for the USA market
■Cadillac	(calendar year)

		2006	2007	2008	2009
SUV	Escalade Hybrid		New Model

Note:

The Escalade Hybrid adopts a two-mode hybrid system. It is 25% more fuel efficient than the base model. The Escalade shares the platform with the Chevrolet Tahoe whose hybrid version will appear in the market at about the same time as the Escalade Hybrid.

■Chevrolet

(calendar year)

		2006	2007	2008	2009
sedan	Malibu Hybrid			New Model
SUV	Tahoe Hybrid		New Model
Pickup	Silverado Hybrid (2004)			Improved Version

Note 1:	The Malibu Hybrid is a mild hybrid vehicle with four cylinder 2.4 liter engine. Its launch was scheduled for 2007 but will now be delayed to 2008.
Note 2:	The Tahoe Hybrid combines the two-mode hybrid system and V8 5.3 liter engine. It is 25% more fuel efficient than the base model. The Suburban SUV and Avalanche Pickup, both of which share the platform with the Tahoe, will have the same type of hybrid specification.
Note 3:	The Silverado Hybrid was put in the market in 2004 and is a mild hybrid vehicle with V8 5.3 liter engine. It was intially sold only in the following states - Alaska, California, Florida, Nevada, Oregon, and Washington - until the end of 2005, and has been sold in all the states since then. It will change to the two-mode hybrid system in 2008, which is a full hybrid system.

■GMC	(calendar year)

		2006	2007	2008	2009
SUV	Yukon Hybrid		New Model
Pickup	Sierra Hybrid (2004)			Improved Version

Note 1:	The Yukon Hybrid is a sister model of the Chevrolet Tahoe Hybrid.
Note 2:	The Sierra Hybrid is a sister model of the Chevrolet Silverado Hybrid and is a mild hybrid vehicle. It was initially sold in a limited number of states like the Silverado Hybrid but is now sold all over the USA. It will change to the two-mode hybrid system in 2008, which is full hybrid system.

■Saturn

(calendar year)

		2006	2007	2008	2009
sedan	Aura Green Line		New Model
SUV	VUE Green Line	New Model

Note 1:	The Aura Green Line is a mild hybrid vehicle, which has the same system as the VUE Green Line.
Note 2:	The VUE Green Line is a mild hybrid vehicle with a four cylinder 2.4 liter engine.

■DCX: putting in the market in 2008 the Dodge Durango Hybrid with two-mode transmission

  At the end of 2007, DaimlerChrysler (DCX) will start to produce the Dodge Durango Hybrid, which combines a V8 5.7 liter gasoline engine and two-mode hybrid transmission, and put it in the market in early 2008. In addition, at about the same time, a mild hybrid version of the M-Benz S-Class is expected to arrive in the market.

■BMW: developing a high performance HEV with two-mode hybrid system

  BMW will not introduce its first HEV until 2009, because it has a policy that any of its HEVs must meet its own performance standards. The X3 will have straight six petrol engine in combination with the two-mode hybrid transmission jointly developed with GM and DCX.

■Ford: adding six HEV models by 2010. Focusing on alternative fuel vehicles as well in the mid-term

  Ford announced in September 2005 that it will add a hybrid version to the Ford Fusion/Mercury Milan and that it will produce 250,000 HEVs a year by 2010. Furthermore, it disclosed in the Way Forward - the automaker's restructuring plan for North American operation announced in January 2006 - that the Ford Five Hundred/Mercury Montego and Ford Edge/Lincoln MKX each will have a hybrid version.

  The automaker also stated in June 2006 that it will focus on the production of alternative fuel vehicles, which can hint at a lowering priority given to the production of HEVs at the automaker.

Note: GM, Ford and DCX each sent a letter to Congress in June 2006, which stated they will double the production of alternative-fuel vehicles to improve fuel efficiency. According to the letters, GM will produce 800,000 Flexible Fuel Vehicles (FFV) a year by 2010, Ford and DCX 500,000 each.

■Mazda: introducing a HEV based on the Ford Escape Hybrid in 2007

  In spring 2007, Mazda will put on the USA market the CX-5 (Tribute) Hybrid based on the Ford Escape Hybrid. The model will be produced at Ford's Kansas City plant which produces the Escape Hybrid.

  Mazda is developing a HEV which combines bi-fuel (petrol and hydrogen) rotary engine and electric motor and will launch it as the Premacy Hydrogen RE Hybrid into the Japanese market by autumn 2008 (the Mazda 5 Hydrogen Rotary Hybrid concept was displayed at the 2006 Detroit Motor Show).

■Porsche and VW will install a jointly developed hybrid system in their luxury SUVs. Hyundai's Accent will have a hybrid version.

  Porsche and VW agreed to jointly develop a hybrid system in September 2005. The jointly developed system will be installed in Porsche's Cayenne and VW's Audi Q7, both of which models will be released into the USA market sometime between 2008 and 2009. Porsche will add a hybrid version to the Panamera 4-door coupe as well.

■Porsche: its hybrid models launching plan for the USA market

(calendar year)

		2006	2007	2008	2009
coupe	Panamera Hybrid				New Model
SUV	Cayenne Hybrid				New Model

Note:

Porsche has been developing a hybrid system with VW since 2005. The system is said to enable a 15% improvement in fuel efficiency without sacrificing performance. Porsche will put the system first in the Cayenne and then in the Panamera.

  Hyundai plans to add a hybrid version to the Accent. Its prototype was displayed at the Guangzhou Motor Show in November 2005 and is now being tested in Korea. The higher cost needs to be resolved before commercialization.

■HEVs are higher priced by anything between 5,000 and 10,000 dollars, with annual fuel savings of about 500 dollars.

  There are nine full hybrid HEV models - sold as 2007 year models - in the USA in October 2006. The price difference between these nine models and their base models ranges from 5,000 to 10,000 dollars, with an annual saving of 500 dollars in fuel cost based on 15,000 miles a year travel.

■2007 year model full hybrid HEVs in the USA market

Model			Fuel efficiency City/Hwy	MSRP(dollars)	Price difference(dollars)	Fuel cost	Fuel cost saving	Monthly sales
Toyota	car	Prius	60/51	22,175	-	723	-	8,500
		Camry Hybrid	40/38	25,900	6,580	1,018	▲453	4,100
	SUV	Highlander Hybrid 4WD	31/27	33,890	6,550	1,371	▲521	2,900
Lexus	car	GS 450h	25/28	54,900	10,750	1,646	▲137	200
	SUV	RX 400h 4WD	31/27	46,060	7,260	1,475	▲560	1,700
Honda	car	Civic Hybrid	49/51	22,600	6,790	795	▲409	2,600
		Accord Hybrid	28/35	31,090	7,740	1,284	▲445	500
Ford	SUV	Escape Hybrid 4WD	32/29	27,260	5,410	1,284	▲525	2,400
Mercury		Mariner Hybrid 4WD	32/29	27,950	5,080	1,284	▲525	200

Sources: EPA 2007 Fuel Economy Guide, etc.
Note 1:	Fuel efficiency is calculated in mpg (miles per gallon), which equals 1km/L=2.35mp. MSRP represents manufacturer's suggested retail price. Price difference is between HEV and the base model in MSRP. The fuel cost is based on the EPA calculation which assumes 15,000 miles travel a year and 2.65 dollars a gallon for regular gas prices for 2007 models. Fuel cost saving is the difference in fuel cost between HEV and the base model.
Note 2:	Monthly sales represent the average monthly sales during January-July 2006; for newly released models, they are calculated using the period from the month when the models were launched up to July.
Note 3:	MSRP represents 2007 year model prices listed in catalogues on the web.
Note 4:	The base models used are the Camry 2.4 5AT, the Highlander 4WD 3.3 5AT, the GS 350 3.5 6AT, the RX 350 4WD 3.5 5AT, the Civic 1.8 5AT, the Accord 3.0 5AT, the Escape 4WD 2.3 4AT, and the Mariner 4WD 2.3 4AT.

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