Personal Log  #916

January 18, 2019  -  January 23, 2019

Last Updated:  Sun. 2/24/2019

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Basics.  Sometimes, you can actually get someone to listen: "technology. motors, batteries, chargers, software, and the most difficult; worldwide supercharger network"  Sadly, it doesn't mean they are well informed.  But at least there is an effort.  If they try, at least you stand a chance.  Unfortunately, if they overlook the basics, it can be extremely challenging to get them to notice what they haven't been aware of.  This typically comes about from not recognizing how small things can have a major impact.  That's because the influence is subtle... which is exactly what you want.  The least distruptive (noticeable) to the typical person, the better.  Fear of change makes that a necessity.  Most resist if they notice.  That's why the basics are so important.  Lots of small changes really add up.  I try to point them out:  You are overlooking the basics, which play a role in electrification... like steering.  Think about Toyota's advancement in those terms, having phased out the traditional pump by switching to electric... a feat achieved by hybrids, essential for plug-ins.  Those little steps make a big difference; yet, you don't acknowledge their importance.


Close-Minded.  Some people just plain don't care: "Toyota is late to the party..."  To such close-minded individuals, I keep my replies brief.  What's the point when they have already made up their mind?  After all, the audience they are addressing don't represent the majority of buyers anyway.  If you are a participant in an online forum during this initial stage of rollout, there's no possible way to argue otherwise.  Ordinary shoppers don't do that.  They are the ones who just go over to a dealer and walk around.  They talk to friends & family.  They do some basic internet search.  They may even go to a big autoshow.  But that's pretty much the extent of their research.  Their isn't much study or preparation.  In fact, the purchase is pretty close to spontaneous sometimes.  The vehicle is the right price.  It appeals to variety of wants & needs.  And gas is cheap.  That's why the short reply is all the more bother some should get when all they care to do is insult, rather than try to have a constructive discussion.  This was mine today:  Being late to pre-game activities really doesn't equate to much.  Only early-adopters are at the party.  That actual game doesn't start until long after the tax-credit (low-hanging fruit) stage is over.

1-22-2019 Progress & Understanding.  We have a long way to go still, but there is hope when you see this: "Finally, we want SUVs.  Why are there almost no plug in hybrid SUVs on the market?  There's the Outlander PHEV..."  It is at least a hint of market recognition.  Of course, not everyone notices the bigger picture a the same time or in the same way: "Everyone else is doomed. Uh-huh."  Those two quotes from two different people on that general blog for all plug-in vehicles, has somewhat of a diverse audience... with respect to what they'll endorse.  Sadly, most suffer from group-think and are very much in the enthusiast category.  Representation of ordinary shoppers is quite rare.  So, I have to deal with their perspective, using logic like this:

Osborne Effect alone could have such a huge impact, likely turning the already highly competitive market into a mess.  Besides that stall of current sales and potential for long delivery waits later, excitement could stir ill-informed purchases.  That risk of reputation from customers not really understanding what they buy can have serious negative consequences.  That's where the doom comes into play.  It's actually a reflection of their own support failing.

Think about how risk is perceived.  A majority of posts you'll encounter identify range as the measure of progress.  They see it as only a factor of kWh capacity.  It's sad that miles/kWh is disregarded as important.  And that's an factor of EV travel too.  It makes discussion of other risk nearly impossible to address.  Think about the risk Toyota has taken by not making safety an upgrade package option; instead, they made it standard even on their lowest priced models.

Doing more research into the electrification business, you discover battery chemistries & implementation vary dramatically.  Those fundamental choices of approach will have a major impact to outcome.  It's an exactly complicated collection of things to learn about.  That's why moving ahead cautiously will limited market rollouts isn't such a bad idea.  Some people will spin a narrative and spread FUD, but they are the ones who will face eating crow later.

I battled Volt enthusiasts for years, expressing concern about the business choices GM was making.  They mocked, belittled, and offended as much as possible to shut me up.  Now, there's a long record of my observations confirming the terrible path GM decided to take.  That type of vindication isn't rewarding though.  It's really a trail of disappointment about so much opportunity being missed.  That's why I'm thankful about Toyota's comprehensive exploration of choices and the wisdom to not rush to market.

Waiting is painful.  That's why I suggest a deep exploration into the business of electrification.  It requires quite a bit of self-educating, doing lots of searching & reading.  But if really is a rewarding way to fill the time.  You will then be able to shrug off the exclamations of doom and understand the answer why.


Saving Face.  Ugh.  How do you respond to this nonsense: "This is the Japanese way to save face."  It's ironic, so many won't recognize how well the situation applies to them.  That's why hypocricy is such a common problem.  I find it vindicating.  When you read between the lines to figure out what they actually want, you know a big automaker like Toyota striving to reach the ordinary consumer is the one to back.  As much as the long-range electric-only vehicles convey a sense of a promising future, there is the problem of cost none of the enthusiasts want to address.  Heck, even supporters trying to be constructive have become very close-minded to the reality of tax-credit expiration being a very ugly situation.  Sales with that $7,500 weren't exactly easy, despite those consumers being low hanging fruit... the easiest type.  The appeal was exclusively from those known as early-adopters.  They are the ones who are well informed and willing to pay a premium.  The loss of that $7,500 incentive makes even that audience shy away.  That means appealing to mainstream consumers is basically impossible.  With a price in the low 40's, there is simply no way to draw ordinary consumers.  Sadly, most discussions don't even get that far.  Most are much more generic, simply calling names and making excuses.  That's what you get when there is little to no substance right from the start.  It's what makes posting this response so easy:  That's better than engineering by press-release and niche rollouts.  Reality is, the propulsion tech is already developed and it is waiting for batteries to be exploited.  Meanwhile, refinements continue.  Don't pretend the PHEV and FCEV designs don't share EV components.


Inconvenient Truth.  This is another one of those bits of information that wrecks a narrative.  I have a feeling I'll be referring back to the detail I uncovered with respect to this 2 weeks ago on a regular basis:  "What an odd twist. We have been hearing all along that Toyota doesn't want to build electric vehicles now we find out the Toyota is the primary supplier of batteries for Tesla."  That message being heard is rhetoric antagonists have been spreading.  Angered by the approach Toyota is taking, which varies dramatically from most others, they portray an image of disinterest & resistance.  It is false to anyone who takes the time to study, but most don't.  The sad reality is many just listen to those stirring trouble.  I'm aware of the work Toyota has done with Panasonic.  I have watched progress over the years and the effort to always deliver an affordable, robust product.  When it comes to batteries, that means taking the time to do it right.  Trying to discuss the situation with impatient & uninformed online posters is almost a futile endeavor.  Fortunately, I stumble across a nugget of data so helpful, it speaks for itself.  The following is exactly that... which I will spread again, and again, until they finally acknowledge:  The recent Bloomberg information about Toyota investing 1.5 trillion yen ($13.9 billion) in its battery business is at odds with the "doesn't want to build" narrative.  So, many just choose to ignore that inconvenient truth.


Reviewers.  Confirmation of how poorly informed enthusiasts are on the blogging site for all type of plug-in vehicles become obvious when a review is taken at face value.  That's a sign that other connect & comments are probably not credible if there is nothing provided to support the claim.  In this case, there wasn't anything more than a vague reference.  There wasn't even a quote included.  It was just a generalized claim of the engine starting.  That turns into a belief that self-validates, simply from seeing its repetition.  Having no source is common though.  Spreading of rhetoric thrive on ignorance & complacency.  Anywho, you can only imagine how many down-votes I got from posting the following information:  Reviewers often don't notice the difference between "EV Auto" and the pure "EV" only mode. It’s easy to overlook the fact that the first allows the engine to run briefly during times of high demand and the latter to prevent running unless the speed (84 mph) or temperature (14°F) thresholds exceeded.


Timing.  We're finally getting back to basics, a simple matter of timing: "I was hoping for changes in 2019 and now I am hoping that 2020 will be the time for the Prime’s refresh."  That equates to the effort to find solid information, for an actual sales.  Those nasty days of hype & distraction are fading away.  Thank goodness!  Now, I can turn to posts like this:  It is possible the 2020 model could have a mid-cycle update and it is possible that could be released to make the 2019 a short run.  We've seen new model-year rollout take place as early as May.  That would mean paying careful attention to what happens as Earth Day approaches... which is the same timeframe when GM triggers their first major tax-credit reduction... opening up the market for a Toyota blitz.  The most recent hope for some plug-in update news was as anticipated the week prior... a silent unknown, the usual quiet from Toyota.  In this case, that was especially fitting, because Detroit's final January auto show was all about old-school speed & power... which is why attention was focused entirely on Supra.  The mindset of Earth Day is so much more fitting.  It's part of the game with Prius.  There is always waiting involved and green draws its own audience.  We know Toyota has a major battery investment underway.  We know they are pushing the spread of their technology.  We know that being both affordable & profitable remains priority.  We also know these things take time.  So, it's a guessing game.  Think about what the other automakers are struggling to deliver.

1-19-2019 The Next Stage.  We are starting to engage in a new level of discussion... finally, a serious step away from rhetoric of the past.  Though, complex risk.... like making safety standard, rather than a package option... still are not acknowledged.  It's at least some progress.  This helped that sentiment along: "Now, do you think that will actually increase the market share of hybrids in the general market?"  I had much to say about it too:

Consideration of what the computer industry did to overcome the same low-margin problem is very important at this point.  Knowing that history, you wouldn't ask the question.

Their solution was divergence.  Each manufacturer took a different direction, attempting to capture what they thought would be a large enough market for them to sustain profitable business in their new paradigm.  That's why I keep repeating KNOW YOUR AUDIENCE over and over again.

In fact, that was the very reason I kept asking "Who is the market for Volt?" on a regular basis.  I could see GM was making that fundamental mistake and kept getting personally attacked for questioning those actions.  Turns out, I was quite correct. They were pursuing sales in a market with very few potential buyers.  They didn't understand the shift. It was old-school logic failing in a changing business.

In other words, whether or not market share increases is meaningless.  GM's choice to disregard their own customers in favor of conquest proved to be a terrible decision.  Toyota observed that targeting mistake and has taken great risk to avoid it.  Which is rather ironic, since many claimed they were not taking any risk. Toyota will focus on their own customers.  That's why it doesn't matter what others do.

This is easier to see if you switch economic perspectives from micro to macro.  You'd notice that variance in battery suppliers & chemistries alone are enough to confirm each automaker will take a different path.  Then, of course, there's the reality that some automakers are abandoning cars entirely and others are transforming them.

Haven't you noticed the risk Toyota has taken by steering Prime in the direction of being a step-up vehicle, no longer favoring the Prius "family mover" image anymore?  That's why they risked elimination of the middle seat, to more closely mimic "post children" offerings.  That is also why it wasn't deemed essential to maximum cargo space.  Priorities have changed.

That spin & short-sightedness we have to deal with from people not recognizing necessary approach changes coming and how much more complex choices will become is unfortunate.  This is why I appear to get rather terse sometimes.  It needs to be stressed that reaching electrification goals won't be the same for each automaker.

To put it shortly, the formula for success in the past doesn't work anymore.  So, the measure of progress and success won't be the same either.


Growth.  It gets confusing even when attempts to be constructive take place: "As Toyota expands the number of hybrid models, we can expect these numbers to increase, which is a good thing."  This is where detail comes into play.  Vague statements kill the opportunity to continue exchanges of observation & experience... preventing any hope of providing informed predictions.  A somewhat effective means of overcoming that is to provide counts setting expectations.  Scale is often overlooked.  Stages of reach are too.  That makes the increase of sales difficult to grasp.  And that's without even taking into account that the market itself is a moving target.  With so many factors intermingling, you have to keep any numbers shared in focus.  Distractions come from too much.  Misunderstandings comes from not enough.  There's a delicate balance.  I try to walk that line:  Toyota stated they expect hybrid penetration here (North America) for their fleet to increase by 6% in the next 2 years, from 9% to 15%.  That's growth of about 150,000.  So, where the supposed "hurt" from Tesla happens is uncertain.  At a time when the EV market is still just going after low-hanging fruit, it's difficult to take the doom & gloom predictions seriously.  RAV4 hybrid looks like it will be a major contributor to that progress away from traditional vehicles, targeting their core buyers with a cleaner more efficient choice.  What other legacy automaker will be attempting something similar within the same next 2 years?  We're certainly not going to see 75,000 annual more electrified anything here from the so-called leader GM in that timespan.  In other words, reality is about to set in.


Profits.  Many who participate in the forums just want to discuss basic.  So even when a complex topic is brought up, the response is usually something of simplicity.  The knowledge & experience needed to have an exchange of critical thinking just plain isn't there.  Having some background related to accounting, marketing, or economics is absent.  Lacking those essentials for understanding business choices makes everything on the big-picture perspective a challenge.  For example: "VW spent a large amount on a BEV dedicated car platform with the first model coming out this year in Europe.  The profits can't be that tiny."  How exactly was that conclusion drawn?  So many factors influence profit, it's an equation experts struggle with for years.  Seeing someone solve word problems in just a single post is amazing!  Ugh.  I try to interject wisdom when I can.  Pointing out history to offer a parallel to compare can be helpful.  Hopefully, this was:  Just like that paradigm-shift experienced by the computer industry decades ago, the automotive industry must now adjust to low-margin sales.  Those who remember that history, it was quite significant. We saw major players leave the game.  Approach to sales and product offerings required major change.  Who would emerge as a strong player was not obvious.  People turning a blind-eye now to subsidies and pretending base-price is competitive with common choices are in for quite a reality shock.


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