Online Extra: Why Hybrids "Are Here to Stay"

Toyota's Takehisa Yaegashi led the team that developed the Prius. He explains how his doubts back then have given way to certainty

Interspersed with Camry sedans in red and blue and black, some of the greenest cars ever manufactured -- fuel efficient Prius hybrids -- glide down assembly lines at Toyota Motor Corp.'s Tsutsumi plant in Toyota City, Japan. There, production hums along as workers install brakes, dashboards, and -- for the Prius models in the mix -- giant battery packs under the back seats. The smashing success of the Prius, which now boasts long waiting lists at many dealerships in the U.S., is testimony to the ingenuity of the Japanese engineers who toiled in the 1990s to make gas-electric hybrid vehicles more than a futuristic pipe dream.

At Toyota, Takehisa Yaegashi is known as "father of the hybrid" for his role as head of the Prius project. The soft-spoken 62-year old, now Toyota's senior manager of hybrid engine development, recently spoke to BusinessWeek's Chester Dawson about Toyota's effort to mass produce hybrids. Following are edited excerpts:

Q: Why was Toyota first to bring mass-produced hybrids to market?


It all started about the time there was talk of much stricter emissions regulations in California back in the early 1990s. But [what became known as] the G21 project was about much more than that. It was about developing an all new vehicle package -- a midsize compact for many markets globally, not just the U.S. Of course, the stricter environmental regulations in the U.S. were a big incentive to go ahead with the project.

We didn't think about hybrids at first because the initial goal was a 50% improvement [in fuel efficiency over an average car], but once our top executives made it clear they wanted much more than that, it became apparent that only a hybrid could achieve that type of target. At the time, the majority of our efforts and those of Detroit had been focused on electric vehicles. But we had hit a wall with electric vehicles [due to limits to existing battery technology]. Hybrids began where EVs ended.

Q: Back then, how confident were you of success producing a mass-market hybrid?


All of the senior engineers had doubts about the program, including myself. We didn't think there was zero chance of success in meeting the goals outlined for us, but the feeling was that it was somewhere less than a 5% probability of succeeding.

We didn't have any blueprints to follow. Feasibility studies and a lot of fundamental research were clearly needed, but instead we were told to jump right into mass production of a vehicle for consumers. There were no existing studies, and yet [in 1995] we were given a two-year deadline for completing a car. Is it any wonder we doubted?

Q: What was the hardest part involved in bringing a hybrid to life?


The chief challenge involved cracking a lot of tough system-integration riddles. And the size and shape of a car is fairly limited so new ways had to be found to cram a lot of equipment into a small package. Then there were safety issues involving the addition of an all-new energy source to the engine compartment in the form of the high-voltage battery.

Managing the energy flow was a major issue. How to do that safely -- and in a shape that wouldn't freak out customers -- required an advanced computer control system. We did a lot of that in the course of developing the Prius with computer simulations.

Q: As first to market, how confident were you that consumers would buy a hybrid car?


Any car has got to appeal to consumers, first and foremost. In order to bring down the cost of hybrids, they must be popular enough to produce on a mass scale. But we really didn't have enough time to finesse the [quirky] styling and driving performance of the first-generation Prius to make it attractive enough for most car buyers. Our feeling at first was that it would have a limited appeal anyway [because of the price premium]. We wondered if anybody would want one. But car buyers have embraced the technology.

Now I feel more strongly than ever that with the right package, there's plenty of demand for hybrids. They're here to stay. In principle, there's no reason why hybrids can't be offered on all models. But how much the costs come down will be the ultimate determinant of how far hybrids penetrate into mainstream vehicles.

Q: Why was the original Prius only sold in Japan for the first two years?


One key challenge was getting the car to work in all weather and under all driving conditions. It took a couple of more years [after 1997] before we felt comfortable selling the Prius overseas. In tests of prototype vehicles in Europe and the U.S. we found we couldn't cover all driving conditions. For example, the scorching temperatures of the Arizona desert and soaring altitudes of Colorado mountain passes presented a lot of challenges for the hybrid engine. We had reports of prototypes suddenly losing power in those conditions.

Frankly, we couldn't guarantee the initial Prius vehicles could be operated safely in those areas. There were a lot of "turtles" on our dashboards back then. The turtle indicator was included only in the first-generation Prius. It was mostly an issue only with some of the very first Prius vehicles ever made. By the time we released the car in the U.S., it had became something of a game to try to drive the car hard enough to get the turtle to make an appearance. By the second generation we'd worked out all the glitches, and the turtle gauge was retired.

Q: What's next for hybrids?


Improving driving performance and those intangibles involved in driving pleasure is the next frontier for hybrids. We are aiming for smoother performance by limiting power loss. We want to make hybrids run faster and smoother than gas engines alone are capable of running. If we can harness more of the power lost to inefficiencies, it will not only increase speed but also increase vehicle stability control. We aren't looking backwards. The future will bring more and more hybrid models.

Q: Aren't fuel-cell-powered vehicles the next big thing?


Fuel cell vehicles are going to be so expensive for the foreseeable future -- no matter what some auto makers may say -- that the optimistic scenario of skipping hybrids and going directly into the production of fuel-cell vehicles is completely off base. Mass production of a hybrid gas-electric vehicle alone took all sorts of new technology. Devising a control system to fit all the parts together was a major undertaking.

There is no way to succeed in fuel-cell vehicles without going through the stage of producing gas-electric hybrids. Only by achieving economies of scale with gas-electric hybrids can the mass production of fuel-cell vehicles become a real possibility one day. It's just impossible to even consider jumping over gas-electric hybrids directly into fuel cells.

It's pretty clear now the big American and European auto makers have finally had to bow to that reality with their recent moves to reverse course and fast track hybrid development.

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