For quite some time, I have been trumpeting Toyota as perhaps the best company in the world. The combination of the most successful eco-product ever (Prius), the leanest manufacturing, and top-notch marketing make the company extremely hard to beat. But now we’re seeing a disturbing trend around their new hybrids. This past weekend, The New York Times published a scathing, but fair, article about the new Lexus hybrid (cover of the Automobiles section, titled “Conspicuous Consumption with Green Illusions“- ouch).
Apparently, the hybrid gets worse mileage than the non-hybrid version (a not-that-impressive 21 mpg vs. 22 mpg in tests). The extra 700 pounds of weight from the battery and other components don’t help. So what exactly makes the car green then? It is a super ultra-low emissions vehicle (SULEV), which is a measure of air pollutants, not CO2. But there are many non-hybrids that get SULEV ratings. So the green must just be the extra $30,000 it costs over the regular Lexus. As the author cheekily points out, you can buy the regular one, then use the extra $30K to buy a Prius for around the town driving.
This kind of false greenness is bad news for a company that has so much brand value riding on its environmental image (and sadly, this isn’t the first time the company has been accused of this problem — its hybrid SUVs gain extra power, but not much extra fuel-efficiency).
From a strategic perspective, none of this makes much sense to me. A big part of Toyota’s rise to world’s #1 was what it did right on green issues — mainly the Prius. I hope this won’t happen, but Toyota may find out that brand good will can be destroyed much faster than it’s built.