As Chief Scientist for Toyota Motor Corporation, one of my most important responsibilities is to think about how to address climate change using science, data, and facts. When it comes to electrification, my role is to maximize environmental benefits with the limited number of battery cells the world can produce.
Toyota’s way of thinking about this question is strongly influenced by the Toyota Production System (TPS). It forms the basis for how we conserve resources and eliminate waste to maximize the quality, durability, reliability, and value of our products. Based on TPS, we believe that maximum net environmental benefit can be achieved by considering the most limited resource – in this case the battery cell.
Every battery cell is an investment of environmental and financial resources. Carbon is emitted for every battery cell produced. Once built, every battery cell has the potential to produce more benefit than what was invested, or what we call a positive Carbon Return on Investment (CROI). But that CROI is not guaranteed. The result depends on how the battery cell is put to use. The physics of climate change (which accumulates carbon in the atmosphere for decades) and limited battery cell production suggests that we minimize total carbon emissions from all of the world’s vehicles by maximizing the CROI of every manufactured battery cell.
Let’s consider the average U.S. commute of 32 miles roundtrip each day. In this case, a 300 mile range battery will yield a very low CROI. The reason is that the vehicle carries excessive battery capacity and excessive weight that is rarely needed or used. The bulk of the energy stored in the battery cell (and the battery cell’s weight) will be carried around most of the time for no purpose, consuming extra energy for its transport, and wasting the opportunity to use that energy for more benefit to the environment. In TPS terms, we consider this to be a waste of transport and inventory. Put another way, that same battery capacity could be spread over a handful of plug-in hybrid vehicles (PHEVs), each of which would utilize most, if not all, of the battery capacity while rarely using its internal combustion engine (ICE). In this case, the overall CROI is higher for the same number of battery cells.
As another example: If a battery cell in a battery electric vehicle (BEV) is recharged by a high-carbon intensity powerplant, the CROI of that cell will be small compared to one recharged by a renewable energy powerplant. So in this case, consider a situation of two cars – one ICE-type and one BEV, and two geographic locations – one with renewable power and the other with high-carbon intensity power. More net CROI will be derived by operating the BEV in the area with renewable power and the ICE in the geography with non-renewable power than the other way around.
Finally, if a battery cell ends up in a long-range BEV whose price puts it beyond the budget of a consumer, or in a street parked vehicle that must use high-rate chargers that lower the battery cell’s life, the CROI will again be smaller than what is possible, versus placing the battery cell into, for example, a PHEV.
BEVs are an important part of the future of electrification. But we can achieve greater carbon reductions by meeting customer needs and circumstances with a diversity of solutions. Wasted CROI harms the environment because there is a limited supply of battery cells, and the cost of production to the planet and to the producer is not zero. Given this fact, how and where battery cells are actually used and charged are critically important.
In summary, given limited battery cell production and significant environmental and financial costs, the way to maximize CROI is to target battery cells into diverse vehicle types – hybrid vehicles, plug-in hybrid vehicles, battery electric vehicles, and fuel cell vehicles that match customer needs and circumstances, and maximize the CROI for every battery cell. This strategy is similar to running a factory efficiently in the Toyota Production System, where efficiency is maximized by eliminating waste at each stage of production and maximizing the benefit derived from every resource and cost. And it forms the basis for Toyota’s belief in this result.