Toyota Pulls The Plug on the All-Electric Car; Admits To Having Misread the Market: EVs Do Not Meet Society's Needs (Cost, Charging Time, Distance)

Link here to the Reuters story:

Toyota Motor Corp has scrapped plans for widespread sales of a new all-electric minicar, saying it had misread the market and the ability of still-emerging battery technology to meet consumer demands. 

Toyota, which had already taken a more conservative view of the market for battery-powered cars than rivals General Motors Co and Nissan Motor Co, said it would only sell about 100 battery-powered eQ vehicles in the United States and Japan in an extremely limited release. [That's an understatement.]

The automaker had announced plans to sell several thousand of the vehicles per year when it unveiled the eQ as an pure-electric variant of its iQ minicar in 2010. 

"Two years later, there are many difficulties," Takeshi Uchiyamada, Toyota's vice chairman and the engineer who oversees vehicle development, told reporters on Monday. 

By dropping plans for a second electric vehicle in its line-up, Toyota cast more doubt on an alternative to the combustion engine that has been both lauded for its oil-saving potential and criticized for its heavy reliance on government subsidies in key markets like the United States. 

"The current capabilities of electric vehicles do not meet society's needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge," said, Uchiyamada, who spearheaded Toyota's development of the Prius hybrid in the 1990s.

This is a huge story on so many levels.

Let's see what A123 is doing this morning: down 10% (drops another 3 cents to 30 cents/share). Down to 30 cents/share. Remember: this sold for $25/share at one time. [A123 is now B456.]

I could be wrong, but I believe Toyota was A123's most important customer. I have more than a passing interest in A123 but cannot comment further. I do not invest or trade in A123.

This should be great news for Government Motors: one less competitor. All indications are that GM will continue to develop, market, and ship its all-electric vehicle, the Volt --- once it re-opens the assembly line.

Related:

First:

Tesla's outlook dims. CEO sidesteps question --
“People that are buying this vehicle now are supporters of the company, so to some extent whether the volume is 5,000 or 4,000 or even 3,000 this year, it doesn’t really matter,” Baum said yesterday. “In the longer term, it’s more important that the product be thought of positively. The last thing the company needs is to disappoint buyers. They haven’t yet and they don’t intend to.” ["It really doesn't matter! Let the venture capitalists eat cake.]

Second:

Tax credits will have no impact on sales of electric vehicles; a waste of money. Some crackpot? Nope, the Congressional Budget Office.