Current Issue
This Month's Print Issue

Follow Fast Company

We’ll come to you.

Toyota's Big Electric Car Blunder

Bill Reinert hates the plug-in electric car. He hates ethanol too. And what Bill Reinert hates matters to every car-buying American: he's Toyota's national sales manager and in-house energy sage, and he knows his stuff. But is he too smart for Toyota's good?

Bill ReinertAt a future-car panel in Southern California last week, he was quoted as calling ethanol "the dumbest kid in school" and saying that plug-in electrics "just aren't plausible right now" because of their wimpy 70 to 100 mile range. ("How many of your friends are going to buy that car?" he said of Shai Agassi's electric RAV4.)

Reinert's problem—and by extension, Toyota's—is that he's right. As I've written, even sustainable, power-dense biofuels that aren't corn-based can't scale anywhere near large enough to eclipse our need for fossil fuels, and 100 miles is 1/3 of the range we've come to expect from cars. The only electric cars that seem to have a fighting chance at pleasing over-expectant buyers are ultra-cheap, purpose-built city cars like the Wheego Whip (below)—and even those, as Reinert notes, still use electricity that is mostly generated with coal power. Companies like Tesla, which just opened its first East Coast dealership in New York, are much too sanguine about their Silicon Valley business models, says Reinert; in mass-market car sales, people want the most for the least.

Wheego Whip

So what's a car company to do? Toyota's mission with Reinert at the helm is to get as many people as possible into 50 mpg cars like the Prius while in the mean time developing ultra-sustainable fuel cell technology. But part of the appeal of the plug-in electric is the plug itself: we already have an electricity infrastructure that can charge cars, sustainably or not. By outsmarting the problem and working towards a fuel-cell future, Toyota and Reinert may end up outsmarting the consumer.

Don't believe me? Take the case of Japanese cell phone makers Panasonic, Sharp and NEC, the subject of an article in yesterday's The New York Times. The phones they produce for their domestic customers in Japan stream digital TV, act as RFID credit cards, surf the Internet at 4G speeds and generally behave as if they're about a decade ahead of Western cell phones, iPhone and Blackberry included. But as The Times observes, "Japanese cell-phone makers were a little too clever": by building high-end technology that required proprietary networks, they fenced out the global market that was moving more slowly. Now they're scrambling to backwards-engineer phones that can work on American and European networks. (Japanese phones, pictured below. Courtesy of

Japanese phones

Should Toyota (or other car makers) not heed the lesson, they'll find themselves in a similar position. As Kevin Czinger, CEO of Coda Automotive, another electric car company, recently explained to me, the cost of retrofitting California's rest stops to include electric car charging stations would register only in the low millions—but building safe, efficacious hydrogen filling stations in that same state would cost more by a factor of ten (or about $126 million just for California, according to one estimate). When you're dealing with states that have powerful environmental mandates but not much cash to back them up—witness the insolvency of states like California and New York—the stage is hardly set for a disruptive technology like hydrogen fuel to succeed. Should Toyota not give the electric car its due diligence, they may find themselves missing out on a very lucrative stop-gap product, and their #1 spot in jeopardy.

Related Stories:
25 Ways to Jump-Start the Auto Business
Inside Tesla's First East Coast Store
What's the Big Deal About the Wheego Whip?