Launch of Succession of Next-Generation Environment-Friendly Vehicles

In addition to its initiatives in emerging markets, TMC positioned next-generation environment-friendly vehicles as an area for business focus, and actively developed associated business strategies that included signing formal collaboration agreements.

In May 2010, TMC signed a business and capital collaboration agreement with Tesla Motors, Inc., an electric vehicle venture company in California, which was announced in California by TMC President Toyoda and Tesla CEO Elon Musk.1 Through this alliance, the two companies agreed to cooperate in the development of electric vehicles and related parts and production systems, with TMC investing a total of 50 million U.S. dollars in Tesla. Then in November of the same year, TMC exhibited the Toyota-brand concept model "RAV4 EV" SUV, developed jointly by the two companies, at the Los Angeles Auto Show, and accelerated the speed of its development toward commercial launch in the United States in 2012.

As for hybrid vehicles, the third-generation Prius launched in May 2009 was well received both inside and outside Japan. In Japan, orders for 180,000 units were received in the first month following the launch, breaking the record for TMC. At a media event on environmental technology, held in Tokyo in November 2010, TMC announced its plan to launch a succession of hybrid passenger car models, including plug-in hybrids, by the end of 2012.

TMC also unveiled an electric vehicle prototype based on its iQ small car and announced its plans to introduce a market version to the Japanese, U.S., and European markets in 2012, as well as to launch the RAV4 EV in the United States. Furthermore, TMC indicated that it was planning to commercially launch a fuel cell vehicle in areas of Japan, the United States, and Europe where a hydrogen supply infrastructure will be established beginning around 2015, expressing its commitment to realistically promote next-generation environment-friendly vehicles through various approaches.

In May 2011, TMC launched the Prius α (Prius Alpha), which became the first new model to be launched in Japan after the Great East Japan Earthquake. The Prius Alpha, while based on the third-generation Prius, has a larger cabin space. TMC developed both a five-seat, two-row model and a seven-seat, three-row model. The seven-seat model used a lithium-ion battery-a first for a Toyota hybrid vehicle. The number of orders received in Japan for the Prius Alpha reached 52,000 units within one month following its introduction, providing a post-great earthquake disaster morale boost for all Toyota-related entities, including dealers.

The Camry, a globally popular mid-size sedan, was not designed as a dedicated hybrid vehicle. However, TMC undertook its complete redesign in September 2011 as an opportunity to make all future Camrys for the Japanese market hybrids. Leading up to this, in August, TMC held simultaneous launch events in the United States, where the Camry had been the best selling vehicle since 2002. A satellite hookup was used to link Toyota Motor Manufacturing Kentucky, Inc., where the Camry is built, to Los Angeles, New York, and Detroit, in an effort to regain the sales that had been lost in North America due to inventory shortages following the great earthquake disaster.

In November 2011, TMC announced the Prius PHV, the first plug-in hybrid for Toyota (launched in January 2012), and in December, the Prius Aqua (Prius c outside Japan) as a new, more-compact-than-Prius, hybrid-only model.

The Aqua, which launched at the end of December 2011, used a new, small, light and efficient 1.5-liter hybrid system that achieved a world-leading fuel efficiency (among mass-produced passenger cars with gasoline engines) of 35.4 km/L under Japan's JC08 test cycle. The affordable base price of 1.69 million yen, which made it more possible to own a hybrid car, the extension of the tax reduction for environment-friendly cars, and a move toward the resumption of government subsidies for environment-friendly cars all helped boost the number of orders received within the first month following the launch to 120,000 units, equivalent to TMC's sales plan for 10 months. This marked an extremely positive start for the Aqua, which is built at the Iwate Plant of Kanto Auto Works. Through a satellite hookup to the announcement event held in Tokyo, Kanto Auto Works President Tetsuo Hattori and others responsible for production at the Iwate Plant expressed their aspiration to help restore the Tohoku region.

Meanwhile, as the pillar of its next-generation environment-friendly vehicles after hybrid vehicles, TMC has been developing plug-in hybrid vehicles, as they drastically improve fuel efficiency, that can be charged even using a household electrical outlet, and that can be used without worrying about remaining battery power. The Prius PHV, which had just entered full-scale mass production, was leased to more than 600 customers, mainly in Japan, the United States, and Europe starting in 2009, to collect customer feedback. Incorporating this feedback, TMC achieved the following performance metrics: 1) electric-vehicle cruising distance of 26.4 km on a fully charged battery, 2) hybrid vehicle fuel efficiency of 31.6 km/L after the battery power has been exhausted, and 3) plug-in hybrid fuel efficiency, calculated by combining electric-vehicle drive and hybrid-vehicle drive, of 61.0 km/L (all under the JC08 test cycle). For the time being, TMC will aim to annually sell 35,000 to 40,000 units in Japan and more than 60,000 units globally.

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