There are many reasons why Toyota is a better automaker than GM, and many reasons why Toyota is now the largest automaker in the world. For starters, Toyota listens to their customers, where GM seems to ignore them. Toyota continually refines a successful formula, where GM lets it stagnate. Not to mention the fact that Toyota has been building rock solid vehicles for years, and GM has only started to do so recently.
But today we’ll look at an issue that I think really sums up the Toyota vs GM situation, and shows why Toyota is successful, and GM, not so much.
In case it isn’t obvious, this little pictures explains in beautiful simplicity why Toyota is smarter than GM. Flex-fuel ( ethanol ) vs Hybrid Synergy Drive. For years now, Toyota has been concentrating on hybrids that get fantastic gas mileage. They are spreading the technology through their lineup steadily – they currently offer 5 hybrid models by my count. In fact, Toyota plans to have a 100% hybrid penetration rate by 2020 – that means that every Toyota sold will have a hybrid powertrain.
GM, on the other hand, has decided to mostly stay out of the hybrid game, and focus on making their vehicles ethanol-ready. Ethanol ( E85 ) is a gas / corn blend that is 85% corn, and just 15% gasoline. The goal of ethanol is to reduce dependence on foreign oil, and reduce costs to consumers. A different strategy than Toyota, for sure, but is it that much worse.
The “Benefits” of Ethanol
Well, yes, absolutely, no question at all. See, there are a lot of problems with ethanol. For one, there’s no official consensus that E85 is net energy positive. That is, it’s not certain that turning corn into gasoline actually creates more usable energy than is used in the actual creation. It is very possible that we are burning more energy than is created – not exactly a step forward, is it?
Even if we make the rather lofty assumption that this is not the case, and that ethanol is energy efficient, it still doesn’t make sense. Why? Because there is no real, “right now” benefit to the consumer. Vehicles that are E85 ready, or “flex-fuel” capable, get approximately 25% worse gas mileage when running on the stuff, than when they run on regular gas. That is because there is less overall energy in E85 fuel. So instead of getting, say 14 mpg city, 20 mpg , you’ll see something closer to 10 mpg city / 15 mpg highway. This is, of course, in a large SUV – something that certain doesn’t need to get worse fuel economy.
There aren’t a whole lot of gas stations that sell E85, at least away from the Midwest. The few that are around my area, actually charge more for E85 than for regular 87 octane. So not only do you pay more at the pump, you get worse gas mileage. So, E85 costs more on two fronts – not exactly my idea of fun. Not only is there a lack of a “right now” benefit, there’s a very real penalty. I’d like to help the environment too, but at a cost of 25%+ more for fuel? I’m not interested.
The Benefits of a Hybrid
On the other side of the fence, Toyota is offering the Hybrid Synergy Drive rather than flex-fuel vehicles. For simple comparison’s sake, we’ll look at the Camry vs the Camry Hybrid. The new 2008 EPA ratings for the Camry are 21 mpg city / 30 mpg highway. The Camry Hybrid? 33 mpg city / 34 mpg highway. Once you swallow the price increase, there is a very tangible, “right now” benefit to driving a hybrid – a 30% increase in fuel economy, and a 30% smaller fuel bill. Not only that, I don’t need to pay extra for special fuel, and I don’t need to hunt around for a gas station that offers it. Ultimately, you get paid to do less damage to the environment.
At the end of the day
What it all comes down to is this. GM is asking you to spend more money to *possibly* help the environment and the country. Toyota is asking you to spend less to *definitely* help the environment and the country. Which one would you choose?