Toyota begins assembling its Prius hybrid in Tupelo, MS sometime late in 2010, and you can expect this development to spawn some form of flag-waving PR from ToMoCo. After all, repositioning itself as an “American” company has been the central project of Toyota PR for a solid decade. But Automotive News (sub) reports that the Prius’s top supplier Denso has no plans to initiate production of hybrid components in the US… or anywhere else, for that matter. “Components used for hybrid vehicles are now experiencing very dramatic change and advancement,” says Denso CEO Nobuaki Katoh. “Given this timing, I still think the activities of development and production of the hybrid components should be concentrated here in Japan for the time being. After that, we may have to consider local production of components in overseas countries.” Quality, it seems, is the rallying cry keeping high-value hybrid component manufacturing jobs in Japan. With new lighter, smaller and less costly components being developed for the next-generation Prius, Katoh insists that Japanese production processes must be refined before they can be exported. Though an obsession with quality and process refinement has launched ToMoCo to its current dominant position, capitalizing on its early hybrid investments require driving costs down and production up. America has bought every available Prius for years now, and establishing top-to-bottom NA production of the Prius as soon as possible has got to be a priority for Toyota.

Since the $25b bailout is a done deal, it’s tempting to think of the “debate” as a fait accompli. Not so. The Department of Energy (DOE) still has to meet with lobbyists study the bill and write-up the regs. Although RF reckons the DOE won’t be rushed (that much), Motown’s white hot for the green, encouraging bailout backers to fire-off warning salvos even before the President’s signature clears the cash. As Green Car Congress reports, Senate Energy & Natural Resources Committee chair Jeff Bingaman (D-NM) is pre-threatening his pals at the DOE.

I have been told there may be some confusion about the terms of the loans as the provision creating the loan program references the “activities” that are the subject of a grant program also authorized in the same section of EISA. The grant program is limited to 30 percent of the costs of a facility. This is a fairly typical cost share for grant programs. Some have raised a question as to whether this 30 percent cap should also apply to the loan program. That is not the way I read the language of the law and was certainly not our intent in writing the provision.

Moreover, I would argue that it would dramatically limit the effectiveness of the program as it would require companies to go to tight credit markets for 70 percent of their financing, precisely the problem we were seeking to remedy with the creation of the loan program. While I don’t expect the Department of Energy to take this limited view of the program, I wanted to go on record here to help alleviate any confusion that may exist. I look forward to working with the Department to aid them in getting this program up and running.

Warren Buffet’s recent investment in BYD has conferred a new legitimacy on a dual parallel-serial hybrid drivetrain, which combines features from both systems. And now VW has revealed its own PHEV third way called “TwinDrive.” Ohne transmission, VW’s concept car uses a small electric engine– powered by a 350 lbs. Sanyo lithium-Ion battery pack under the trunk floor– to launch its Golf testbed to 30 mph. (At which point the gasoline engine kicks in.) Electric acceleration helps overcome the limitations of a single high gear; reverse is electric-only. And drivers can engage an EV-only mode. Motor Trend reports that VeeDub’s testing the TwinDrive system with diesel engines, but gas-powered TD’s are destined for production. Production ICE is said to be a 100hp  turbocharged 1.05-liter turbocharged triple. A smart navigation-based system will calculate energy use priorities, saving battery capacity if urban driving appears ahead on the planned driving route, thus ensuring battery depletion at the destination and keeping the TwinDrive away from gas pumps unless absolutely necessary). The basic components of plug-in hybrid systems seem to have become fairly standardized. But concepts like the TwinDrive show that there are more development options than simply parallel or serial configurations.

China’s Build Your Dreams (BYD) is something of a dark horse in the hybrid/EV game. BYD has leveraged its status as a major manufacturer of NiCad and Li-Ion batteries to create what it calls a unique hybrid drivetrain, shown in a number of derivative concept vehicles, The system purports to offer a Prius-like parallel hybrid mode, a Volt-like serial hybrid mode AND an EV-only mode. Without independent verification, the firm has invited accusations of vapor-mongering. Automotive News [sub] reports that the thinking man’s billionaire Warren Buffet has cast aside such concerns and dropped $230m on a ten percent stake in BYD. “(BYD founder) Mr. Wang Chuanfu has an extraordinary managerial record, and we welcome the opportunity to work with him,” said Buffett in a statement announcing the purchase by MidAmerican Energy Holdings, a unit of his Berkshire Hathaway financial juggernaut. This development gives BYD exactly what it needs: legitimacy. Buffett is well known for investing purely on a firms business fundamentals; his vote of confidence lifts BYD from unknown quantity to potential, yes that word again, game-changer. Meanwhile my home town of Portland, Oregon has been reaching out to BYD in hopes of landing a local production deal. Hope rain doesn’t short-out these things…

Information Week reports that GM will be relaunching GMNext as a PR brainwashing social networking site. Apparently, they think it will make a difference. “It’s hard to put a specific dollar value on this but it’s something we have to do,” GM social media manager Natalie Johnson declared, before refusing to reveal how much GM is spending on the re-hype. Johnson cited CEO Rick Wagoner’s “Don’t Worry, Be Happy” video as an example of how the internet allows executives to “answer some tough questions in a very candid and frank way.” Uh, hang on; the Wagoner clip was on GM’s FastLane blog, not the [existing] GMNext website. Anyway, here’s the CEO’s one and only reply to 73 comments…

To everyone who’s commented,

Thanks for your terrific feedback. We appreciate your passion, ideas and support. This gives us a good idea of what’s on your mind. Unfortunately, I’m unable to respond to all of your comments individually right now, but I have read them. Over the next few weeks other GM leaders will offer their perspective about different areas of the company, and you’ll continue to see GM team members respond to many of your specific questions. That said, I would like to thank Ben for his CTS-V purchase; and please tell your girlfriend that I hope she enjoys her new Sky.

It was great to see many of the comments about the Chevy Volt. Since the beginning, we’ve been open in discussing the Volt’s development, progress, and challenges. Perhaps it makes the Volt’s production date seem a long way off, but at the same time, hopefully it’s interesting to be able to look through the same microscope we are. I agree with those who say Volt isn’t the only solution — it’s clearly not, which is why we offer many hybrids today, have 18 2009 vehicles that achieve 30 mpg or higher highway fuel economy, and are doing extensive work in biofuels, including cellulosic.

I assure you that the GM team is working hard to reinvent the automobile and our company . . . and we’re doing it in the midst of a very challenging environment, but we know we can win.

Thanks again for your interest and comments, and please keep them coming.

Rick

The NY Times had a Digg-topping hit over the weekend, exposing the unwashed masses to the cosmic truth that LeMons racing is incredibly awesome. Regular readers of TTAC and other fine car blogs have adored the $500 car nut race series for some time now, but it’s good to see LeMons get the mainstream attention it so richly deserves. Besides, making an entertaining feature out of LeMons is a little like voting for Obama: if you can’t swing it, you probably shouldn’t be working at the New York Times. Wheelspin scribe Eddie Alterman hooked up with a Fiero-fielding team for LeMons South, and the event’s insane rules rich pagentry and certifiable nutcases colorful personalities shine through in his piece. LeMons is too crazy not to appreciate a tribute to the vibrancy of the American spirit, and it’s new-found popularity comes as no surprise. Just don’t go changing on us, guys.

As we reported in our last exciting episode, a big, fat EPA rating on the Volt’s hood is crucial to the project’s success. The LA Times reports that the Volt’s vehicle-line director Tony Posawatz now claims that the EPA has “agreed to a testing method that will produce a rating of at least 100 mpg.” The EPA says it still needs time to determine a fair testing method for plug-in models that burn no gas in their initial EV range. But GM wants it done soon, dammit. Posawatz says The General would share mileage data from the Volt’s onboard computers to verify real-world performance if the EPA would grant the certification now. Posawatz estimates the Volt’s theoretical EPA rating at 120 mpg to 200 mpg, “depending on assumptions about how much gasoline is consumed after the battery loses its charge on the road.” Meanwhile, Don Foley of the Automotive X-Prize would like to remind everyone that “reliance on an mpg standard alone will soon be outdated and will not accurately reflect the need for higher fuel efficiency.” Word. The X-Prize’s mpge (miles per gallon equivalent) is a far better measure of energy use. Hey! Why isn’t GM entering the Volt in the $10m competition? Maybe the EPA mpg standards are easier to game.

It’s flip-flop week over at Automotive News. While Editor David Sedgwick pulls a Volt-face, publisher Keith Crain is flopping around the bailout issue with the grace of a freshly-landed steelhead. Just a short week ago, Crain took to his keyboard to pen a paean to the Detroit bailout. “Have the auto companies made bad decisions in the past three decades that have led them to this period of peril? Of course they have, and they continue to make bad decisions. But it is in the best interest of the United States to have a strong and viable domestic automobile industry.” This week, the AN strongman has a new take on bailouts, written under the headline “Somebody Should Just Say No.” In fairness, Crain hasn’t properly flip-flopped, he’s just being hypocritical. He may be the biggest backer of Detroit’s federal teat-nuzzling (“hoon”), but when it comes to Wall Street bailouts, the man is all principle. “Those Wall Street companies bought portfolios of bad home loans to make money,” growls Crain. “The companies are at risk because of their bad judgment, and they should take their losses.” In other words, America needs an auto manufacturing industry, but the financial centers that run the world economy we can give or take. “Let’s not jump into decisions that will increase the indebtedness of the American people,” says Crain, arguing that the auto-industry loans will definitely be paid back. And if “the mess on Wall Street is only a distraction from a thorough study of our manufacturing base,” why does Crain think the Wall Street bailout is getting top billing? Because Treasury Secretary Henry Paulson “made millions” on Wall Street and is “compromised.” As opposed to Keith Crain who never made a dime off America’s auto biz, and is as neutral and incorruptible as Solomon himself? Money-grubbing is never fun to watch, but this is just getting ugly.

After tearing the Volt a new one last week for being expensive, overhyped and incapable of charging its own batteries, Automotive News Editor David Sedgwick is suffering from what we at TTAC like to call a “bile hangover.” After lunching with the suits at RenCen, Sedgwick is back-peddling furiously. And how exactly does the Volt make sense now? Change the badge to Cadillac, baby! Now, I may not get invited to the RenCen for poached salmon with Cadillac GM Jim Taylor, but I’ve already asked why the $40k-ish Volt isn’t being sold as a Caddy. Sedgwick says that the Caddy Volt concept is fueling internal debate between Cadillac’s futurists (who vote aye) and traditionalists (who want a new STS/DTS flagship). Yes, but– if Caddy it is, GM will have wasted hundreds of PR billable hours trying to convince everyone that a $40k mainstream Chevy isn’t an outlandish proposition. And the Volt’s bailout-fodder status requires some kind of volks wagen appeal; while a $40k Chevy is a tough pill to swallow, a taxpayer-funded Cadillac could create a nasty backlash. Besides, Sedgwick’s claim that the Volt would be “the world’s first green luxury car” conveniently forgets the LS600h in the room. Or am I just jealous that I don’t get invited to lunch with Cadillac honchos?

Kia’s dropped $165m to develop its funky new Soul “urban crossover” concept. In hopes of convincing the youngsters to hop on the Seoul train, the Korean brand is showing no fewer than seven versions of the Soul at the upcoming Paris Auto Show. Automotive News Europe [sub] reports that Kia is playing the Sciontology card, hoping to “drive home [sic] the message that the car is personal and customizable.” Though some may cry “gimmickry,” we say gopher it. The MINI sets the standard for small car appeal. Though pistonheads love the Anglo-German sub-compact’s handling and performance, it’s fashion statement qualities are a huge part of its appeal. If Kia can build a cheaper but equally cheerful version of the MINI, complete with the kind of OCD customization that has even non-customers “building their own” online, it will be a huge hit. It seems genuinely attractive too, showing how far the small-car styling game has come, making Chevy’s “small-big-car” approach to the Cruze look instantly dated. You also won’t have to wait until 2010; North American Soul delivery is scheduled to begin in April with hybrid and stop-start versions in the pipeline.

We pretty much knew this was coming when we heard that Michigan’s Economic Growth Authority approved state tax breaks for GM, but now it’s officially official. Insurance News Net has the full press release announcing GM’s $370m investment in a Flint plant to build small four-cylinder engines. The engines will be used in the Volt as range extender, and will power the Cruze in turbocharged form. Flint will become GM Powertrain’s “most flexible and competitive engine assembly lines in the world, with approximately 300 highly flexible stations that will allow assembly of multiple 4-cylinder engine families without retooling,” according to the General’s press release. The 552,000 square foot plan will be LEED certified and will operate as a landfill-free facility when it opens in 2010. Too bad it won’t retain more than 300 jobs, especially considering the state of Michigan will forgo $122.5m in tax revenue to attract the project. But hey, that’s a small price to pay to have blighted Flint associated with the immense Volt hype, right?

While Chrysler jumps headlong into the concept car vaporware EV game, Toyota is taking its usual evolutionary approach. Bloomberg reports that ToMoCo will stick with its Prius strategy, augmenting it only with a Compressed Natural Gas (CNG) burning hybrid version of its Camry sedan. The CNG Hybrid is a response to lower natural gas prices in the US compared to normal gasoline, and the modest success of Honda’s CNG Civic. No pricing or efficiency information is currently available for the CNG Hybrid Camry. Meanwhile, Toyota is still driving down the replacement cost of its Prius-powering NiMh battery packs, which now set first and second-gen Prius owners back $2,299. Calling the Prius “as close to a silver bullet as you’re going to get,” Bill Reinert, national manager of advanced technology for Toyota Motor Sales claims “the reason the Prius was such a successful car is that the customer didn’t have to do anything to it.” And to those who say that hybrids are a “transitional technology,” Toyota will be selling a million Priora per year by 2010, before Chrysler and GM even start selling their highly-touted EVs. Slow and steady, as they say…

There have been rumors floating around that GM approached Isuzu with an offer to sell its mid-sized truck business. Rumors being what they are, multiple sources now say that Isuzu ain’t interested. Japan’s Corporate News reports that Isuzu and Toyota (5.9 percent owners) execs “sounded negative about the possibility the firm may buy General Motors Corp.’s truck operations.” According to that report, the two sides aren’t seeing eye to eye on a price for the operations, proving once and for all what a bitch the used truck market can be. Meanwhile, The Guardian reports that Isuzu President Susumu Hosoi says his firm “will struggle to hit its full-year net profit target and has ruled out buying General Motors’ mid-sized trucks business.” Hosoi-san was unequivocal, saying Isuzu is not even planning on increasing its 40 percent stake in DMAX, a North American diesel engine joint venture with GM. The only place Isuzu is currently planning a new major site? Saudi Arabia, of course. No, seriously…

Our fearless leader has noted at least once that a RUF-fettled Porsche Boxster would always have a home in his heart. And though he’s never gone (quite) as far as calling global warming a crock of shit, we think that RUF’s latest eco-friendly offering might just be enough to make him stop worrying and love the environmental movement. Oh, did we mention that the latest Ruf Cayman offering is all-electric? That’s right, the infamous German tuning house is developing a lithium-ion powered mid-engined sportscar that has nothing to do with the Lotus Elise! With 204 hp and 480 lb-ft of zero-rpm torque, the RUF Cayman should hop from 0 – 60 in about four seconds, top out at 120 and have a range of 155-188 miles. Though carbon-neutral drag races with a Tesla might leave the RUF a little chastened (giving up 35kW of power to the Roadster as it does), RUF has an established clientele base and price-poit expectations that Tesla would kill for. Plus, with Detroit Electric, Dodge and Tesla all showing off EV variations on the Elise theme, the Cayman EV stands alone. As an everyday car, it’s also eminently more practical, useable and better looking too. Being a RUF, it will also cost several appendages and depreciate faster than the Zimbabwean dollar. Look for a concept unveiling sometime in October, with production and pricing to be announced.