Monday, April 8, 2019
Toyota Motor Corp. announced a plan to start granting royalty-free licenses on the company’s closely guarded hybrid electric vehicle (HEV) patents. It will assign as many as 23,740 through 2030.
Japan’s largest car maker will also offer “fee-based” technical support to purchasers of their powertrain electrification systems, including Toyota motors, batteries, PCUs and control ECUs. Toyota is seeking to help vehicle manufacturers who are new to HEV development reach their performance goals as soon as possible.
So why is Toyota doing this? Out of generosity? Or its dogged pursuit of a reduction in CO2 emissions?
Toyota described its goal as “driving global vehicle electrification.”
There are industry observers, however, who suspect different. They note that Toyota – late to the EV market — might want to buy the time it needs to catch up with rivals and prolong the life of HEVs on the global market.
Declining HEV market
Toyota has dominated the market for non plug-in full hybrid models, with a market share of 80% or more, according to Ian Riches, vice president of global automotive practice at Strategy Analytics. “But this market is now essentially flat or falling as OEMs move to either more cost effective 48V mild hybrids, or more efficient plug-in hybrid and battery electric vehicle models.”
The auto industry is generally understood to be shifting toward fully electric cars.
Milan Rosina, principal analyst, power & wireless / batteries, Yole Développement, sees the EV/HEV industry “moving incredibly fast.” He said the split of different vehicle types (mild hybrid, full hybrid, plug-in hybrid, full electric vehicles and fuel-cell electric vehicles) is increasing in complexity. With that preface, he asked: “Full HEV is an interesting solution for car electrification. Or WAS an interesting solution?”
What’s in the released patents?
The HEV patents Toyota is making available free of charge are for parts and systems, electric motors, power control units (PCUs), and system controls. These are “core technologies that can be applied to the development of various types of electrified vehicles including HEVs, plug-in hybrid electric vehicles (PHEV), and fuel cell electric vehicles (FCEV).”
Toyota’s rationale is that the more companies that start embracing the patents and begin manufacturing HEVs, the lower the overall cost of EVs will become.
Strategy Analytics’ Riches noted, “Motors, inverters, DC/DC converters and batteries are all common components, as are regenerative braking systems and HVAC systems designed to work without power from an internal combustion engine.”
However, he said, “Hybrids typically use much lower-power motors and smaller capacity batteries than EVs, so the technology is not necessarily transferable.”
Also, Toyota has excluded from the patent release its Li-Ion battery patents (the chemistry of choice for large battery packs), Riches noted.
His conclusion? “It’s not at all clear that this will help bring down EV costs.”
Riches added that Toyota’s Hybrid strategy has been built around vehicles with relatively low-power motors and smaller battery packs, which have mainly been NiMH over the years. He observed. “It is clearly in Toyota’s interest to prolong the life of the hybrid market as long as possible, in the face of an onslaught of plug-in models where it does not currently compete.”
Rapid changes in incentives for electrification
Yole’s Rosina maintained that the EV/HEV market is driven by various incentive mechanisms that might still be subject to sudden changes. A good example is the decision by the Chinese government to cut EV/HEV subsidies and eventually abolish them completely by 2020.
For some Chinese OEMs facing such drastic changes in government incentives, HEVs with royalty-free patents from Toyota might seem attractive.
Toyota is also angling for a strong HEV foothold in emerging markets – including China and India – by offering a lot of handholding to local car OEMs with little experience in vehicle electrification.
Specifics of Toyota’s technical support include “providing overviews of vehicle electrification systems, control guides, and detailed explanations of tuning guides for vehicles that will utilize its systems,” according to Toyota. “The guidance that Toyota will provide, for example, includes helping other automakers to achieve high-level product performance in terms of fuel efficiency, output, and quietness fit for the vehicles they are working to develop. The services will be contract-based.”
With leading carmakers planning to invest more than $300 billion in EV/HEVs in the coming years, Rosina expects the biggest infusion from Europe. Rosina observed, “The ‘dieselgate’ affair over CO2 emissions measurements has further accelerated the car makers’ strategic decisions to release more electrified car models earlier.”
To reach the CO2 emission reduction targets, strengthened by Europe in 2018, carmakers must focus on increased electrification of their fleets, i.e. to full-hybrid, plug-in hybrid and full electric vehicles that emit less CO2 than mild-hybrid EVs, he explained.
Against that backdrop, Rosina said many OEMs increasingly understand that “48V mild hybrid is not enough” to reach emission targets. They are focusing more and more on “strong electrification,” he noted.
What about fuel cells?
Toyota has been a relative late comer to the mass EV market because it had pinned its hopes on a transition from hybrids to fuel-cell vehicles, explained Riches.
As of 2017, Toyota seems to be broadening its approach, according to Riches. It has often stated that the aim by 2025 is for every Toyota/Lexus to either be EV-only or have an electrified option such as a hybrid or hydrogen fuel cell.
In fact, the company’s big bet on hydrogen fuel-cell electric vehicles (FCEVs) led to a 2015 decision to allow access to its FCEV-related patents through 2020. In addition to 5,680 patents related to its FCEVs, Toyota is now “adding approximately 2,590 patents related to electric motors, 2,020 patents related to PCUs, 7,550 patents related to system controls, 1,320 engine transaxle patents, 2,200 charger patents, and 2,380 fuel cell patents, according to the company. This brings the total of fuel-cell related patents to 8,060, Toyota claimed.
Yole’s Rosina suspects that the real reason for Toyota’s decision to release its closely guarded HEV patents might be not just seeking broader support for HEVs, but also FCEVs. He noted, “Actually fuel-cell electric vehicles (FCEV) and hybrid-electric vehicles use a similar battery, both use booster to increase the battery (in full HEV) or fuel-cell stack (in FCEV) voltage to the required levels.”
Toyota has been developing FCEVs for years and commercially launched its Toyota Mirai FCEV several years ago, he noted.
Where do we go for vehicle electrification?
An auto industry looking for vehicle electrification has many options.
“Actually, if you need some electrified functions, such as braking energy recovery, you can have mild-hybrid EV (48V mild hybrid) for much lower cost of electrification,” said Rosina.
“If you would like to use clean electricity to power your car, you need plug-in hybrid (PHEV) or Battery Electric Vehicle (BEV).” The same principle applies, said Rosina, “if you want to use the energy from your car battery to power your house in emergency situation, grid failure or at isolated sites without access to the grid.”
So, the $64 billion question, said Rosina, is: “Do we really need full hybrid vehicle today, when we already know it has many drawbacks compared to both mild hybrid electric vehicles (MHEV) and BEV/PHEV?”
He called this “an open question,” but added that it is logical to assume that the full HEV share will steadily decline.
Toyota’s innovation force?
While this is Yole’s understanding today, he said, “Some strategic decisions, IP access and others might change this purely technological/economic picture.”
Although Toyota in the EV market is historically very strong based on full-hybrid, Rosina finds Toyota “losing force in innovation,” with an approach that is “too traditional.” An example is Toyota’s use of NiMH batteries, while most players now rely on Li-ion batteries. Rosina is, however, hopeful. He pointed out that the adoption of Silicon Carbide (SiC) in Toyota cars could be a sign of “innovation force.” But he wondered how fully — or hesitantly — Toyota will commit to SiC by 2020.
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