About 75 percent of the hybrid cars on the road are built by Toyota, and it plans to double their production in 2010. In 2012, when it debuts its new plug-in Prius, it expects to be churning out a million of them. Just one problem: the lithium needed for its hybrid battery packs (pictured) is incredibly scarce. But today, the company took a big step toward a solution, sending subsidiary Toyota Tsusho to Argentina to secure all the lithium it needs.
A member of the Toyota Group — the umbrella corporation that also owns Toyota Motors — Toyota Tsusho sells the parts and materials used to make cars. It just struck a deal with Orocobre, an Australian lithium mining company in Argentina, boosting its own stock 10 percent. Orocobre benefited even more, watching its value almost double following the agreement. When terms are finalized, Toyota Tsusho will own a 25 percent stake in Orocobre.
This is a very strategic move for the Toyota Group. Demand for lithium is sure to skyrocket once electric cars and hybrids join the market and become more commonplace starting this year. Toyota Motors now commands both the raw materials and the manufacturing infrastructure it needs to hit the ground running when its plug-in model is released. Whether or not the corporation will sell lithium to other EV, hybrid or advanced battery makers is unknown, but it could present a lucrative opportunity.
For now, no one is questioning Toyota’s dominance in the hybrid business. If you include the Lexus brand, which Toyota owns, the company produces seven models of hybrids already available in the U.S. About 90 percent of them are built in Japan, though there are plans to expand assembly operations to both China and the U.S. The company has also tipped its hand on plans to build hybrid minivans and sportier versions of its Prius.
If Tesla Motors or General Motors, with its Chevy Volt, has anyone to fear in the advanced vehicle market, it’s Toyota. It has the brand recognition, the green stamp of approval, and now the deals to retain its crown through the upcoming melee of EV and hybrid launches. What will it take to unseat the Japanese powerhouse? Nothing we’ve seen yet.