In my first column reality checking the Detroit Auto Show , some of you questioned my assertion that even Toyota’s relatively high-volume hybrids are probably not profitable. Of course, Toyota has lowered the costs of its Hybrid Synergy Drive components over many years and hundreds of thousands of units. But I believe they’re still too high for any Toyota Hybrid – even the Prius or the soon-to-come higher-priced Lexus HS 250h – to turn a profit. I can’t prove it – Toyota is not about to share its cost numbers with me or anyone else – but that’s my opinion, and these are “opinion” columns. Yours may differ, and yours may be right. But I’ll bet no one outside of Toyota knows for sure. What most folks outside the industry don’t see or comprehend are the enormous costs of designing, testing, developing and validating every one of the thousands of parts and pieces that go into every modern vehicle. Beyond the mostly expensive and relatively low-volume hybrid system components themselves are all the Prius’ specific body, chassis, electrical and comfort and convenience parts and pieces, few of which are shared with other vehicles. The addition of the new Lexus HS 250h on the same architecture will help by raising the volumes of parts that are shared, but I doubt whether even that will turn a profit at its higher prices but much lower volumes. Am I suggesting that Toyota is fibbing by claiming that Prius is profitable? It depends on how they calculate their costs. If they add up the costs of all those parts and pieces – including the still very expensive battery, EVT transmission, motors, wiring, control systems and more – and toss in the relatively minor cost of assembly, the total may indeed be less than the Prius’ average selling price. But they would have to discount all those years and huge costs of design, testing, development and validation, which must be spCar Blog Greenout (“amortized”) over hundreds of thousands, even millions, of units. Their business plan has depended on long-term profitability from growing sales of higher-priced luxury hybrids and sales of the Synergy drive system to other OEMs, neither of which has fared as well as hoped. What I don’t understand is why Prius’ profitability seems so important to some ABG readers. If each unit sold does make a buck, bully for them. If not, so what? Toyota’s whole hybrid program is still a hugely profitable investment as one of the best-ever image-building efforts any automaker has ever carried out. Whatever they have spent on it through the years is worth far more than any amount of paid advertising they could have bought for similar money. What should be important to potential owners is whether any EV’s or HEV’s selling price is worth the long-term gas savings it offers, whatever its cost to its manufacturer. That said, let’s reality check some other electrically-powered vehicles showcased at this year’s Detroit North American International Auto Show. Follow us after the jump. Continue reading At Witz’ End: Detroit Auto Show: Reality Check – Part II Auto Blog: AutoblogGreen Exclusive , Detroit Auto Show , Green Daily , At Witz End At Witz’ End: Detroit Auto Show: Reality Check – Part II originally appeared on AutoblogGreen on Tue, 03 Mar 2009 11:53:00 EST. Please see our terms for use of feeds . Car Blog Green | Car Blog Green | Car Blog Green | Car Blog Green

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At Witz’ End: Detroit Auto Show: Reality Check – Part II