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2010 Toyota Prius - Click above for a high-res image gallery

Regular AutoblogGreen readers are well aware that there are a number of wide-ranging hurdles facing eco-friendly transportation choices like electric vehicles and hybrids. With so many real honest-to-goodness issues to choose from, we wonder why anyone needs to come up with fake ones, but here we go again. Speaking on This Week with George Stephanopoulos, conservative columnist George Will said:
[The Prius is] affordable because Toyota sells it at a loss, and it can afford to sell it at a loss because it is selling twice as many gas-guzzling pickup trucks of the sort our president detests. So as an auto executive, he's off to a rocky start.
Sigh. We've been hearing the line about the Toyota Prius being a money-loser since it was first introduced. It was likely true a few years ago, but not any longer. Toyota has repeatedly denied claims that it loses money on the Prius, and the Nikkei newspaper in Japan estimated just last week that both Honda and Toyota make over $3,000 of profit on each hybrid sold. Someone needs to take George Will to school.


[Source: ABC News via Treehugger]


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    • 1 Second Ago
  • 26 Comments
      • 6 Years Ago
      It's not surprise that George F Will would downplay anything green. He is notorious for writing articles questioning man made global warming, which have absolutely no scientific truth whatsoever. His recent articles published by the Post have been roundly criticized and condemned by everyone in the climate science field. All three of his talking points in one recent article were completely false and based on sources that actually had the complete opposite conclusions to his phony claims.
      Atul
      • 6 Years Ago
      I'm a liberal so I generally don't agree with George Will, but for anybody to claim that they can prove that a company makes a profit or a loss on an individual model of vehicle is kind of useless. If any of you are familiar with managerial accounting, you know that how you spread out costs for things like engineering overhead, R&D, and other costs associated with the development of a vehicle is somewhat arbitrary. Sure, variable costs (such as the cost of purchased parts), are easier to pin down and attribute to each Prius sold, but accounting is a game, and expense numbers can be shuffled around to look better or worse for a particular product. That's also why when people say a company loses $X on every Model Q car that gets sold, it's not like they keep more money by holding onto the vehicle instead of selling it. It's often a function of accounting practices.
        • 6 Years Ago
        @Atul
        *yawn* all that typing amounted to a whole lotta nothin.
        • 6 Years Ago
        @Atul
        Polo may not have understood, but I did. Many parts that were developed for the Prius were later used on other vehicles, so the question is, do you apply all the development cost to the Prius only, or do you spread it out over all the vehicles using that particular part? The answer determines how much the :"development cost" is, thus how long it takes to pay off that development cost.
        Atul
        • 6 Years Ago
        @Atul
        Polo. I'm surprised you were able to read my whole comment. I guess you didn't understand it. I'll try to dumb it down and make it shorter next time.
      • 6 Years Ago
      If he really believed that, why doesn't he advise all those US conservatives to go out and buy a Prius and drive Toyota into bankruptcym thereby saving GM? Because he isn't really sure of that factoid, he's just repeating another standard conservative talking point, and like most conservative talking points it is based on conjecture and wishful thinking, not facts.

      Perhaps he is unaware that Toyota has been boosting Prius production and adding more hybrids to their product line - something they wouldn't do for with an unprofitable product. Also, Toyota is highly profitable, and that reflects their line of profitable products.
      • 6 Years Ago
      I think the Prius may have been profitable when gas was $4 a gallon and they had a several month waiting list of people willing to pay more than MSRP. Now that gas is cheap and they've been offering >$1500 cash incentives, I find it hard to believe they're still making a profit. Transaction prices have taken a several thousand dollar down-turn.
      • 6 Years Ago
      There is a very simple truth concerning George Will;
      http://www.dickipedia.org/dick.php?title=George_Will
      Maybe,too simple.
      • 6 Years Ago
      I took from Will's comments that he simply thinks The President is naive to suggest he can save Chrysler by having them build hybrid vehicles. It sounds cool, though.

      You can nitpick his assertions about profitability and bemoan "right wing lies" all you want. The fact is that Obama has never run a car company and there is no reason to have any confidence that he can get this right. You can hope he does, though...

      I am in the business and visit several different dealers representing a variety of manfacturers each week. If you want a hybrid today, you can have any color and option combination you want. Why? Because "nobody" is buying them.

      BT
      • 6 Years Ago
      This is where it comes from. There is an interesting radio program in the Los Angeles area called the car show. They frequently interview marketing types from car manufacturers. I have heard interviews with people from both Honda and Toyota in which they gave coy answers like, "I can't really say how much we lose on each car." The profit picture may have changed since then, but let us not pretend they do not know where this rumor came from. Straight from Honda and Toyota.
        • 6 Years Ago
        Actually this all originated from Rush Limbaugh. Prius is a SALES LEADER for Toyota, so those claiming they are selling them at a loss are either rethugs (known for lying and making up anything to justify their insane extremist beliefs) or idiots who heard it from a rethug and think its therefore true.
      • 6 Years Ago
      George Will's job is to point out as many negatives as he can dream up about the Democrats; He is a part of the paid political assassins in the media that include Rush Limbaugh and all the other talking heads on Fox TV. Remember when you read his work, and tune to Fox, the information is designed to attack the Democratic party and its leaders. After watching Fox, you owe yourself a favor to get the other side of the story by watching MSNBC and CNN.
        • 6 Years Ago
        George Will doesn't work for Fox, he works for ABC. Lay off the anti-Fox Kool-aid, they don't run the universe.
      • 6 Years Ago
      If someone can point to a Nikkei article that does expose a major Japanese exporter for dumping, I'll be more onboard with it as a source.
        • 6 Years Ago
        Since I'm not familiar at all with it, I was more concerned about whether the nikkei newspaper is a valid source. Or is it a cheerleader for Japanese business? Is it like asking Fox Business Channel if the Oil Companies engage in gouging?
        • 6 Years Ago
        You are right. That is the point. When Honda and Toyota was losing on hybrids, there were no hybrids here to compete with. Now there are domestic hybrids, and dumping(selling exports below cost to obtain a trade advantage) is a trade crime that comes into play. Strangely Will did not call for enforcement of the laws against dumping which he might have done if he even believed what he said about the pricing.
        • 6 Years Ago
        Since I'm not familiar at all with it, I was more concerned about whether the nikkei newspaper is a valid source. Or is it a cheerleader for Japanese business? Is it like asking Fox Business Channel if the Oil Companies engage in gouging?
      • 6 Years Ago
      Actually the bigger factual error from George Will is that Toyota "is selling twice as many gas-guzzling pickup trucks" as Priuses.

      The facts, from 2008:

      Prius sales: 158,884
      Tundra fullsize pickup sales: 137,249

      But if the premise is "unprofitable" hybrids versus "profitable" fullsize trucks, then add hybrid Camrys (46,272) and Highlanders (19,391): 224,567.

      Compared to fullsized pickups, you have 64% more mainline hybrid Toyota sales than Toyota fullsized pickups.

      You can of course add in the smaller, less profitable, slightly more efficient pickups (Tacomas), which put the total pickup sales to get a total of 281,904, but all pickups then outsell Hybrids not 2-to-1 but by about 25%...not a great soundbite.

      I'm not a Toyota fan, but I'm less a "let's manipulate the facts to support my argument" kinda guy.

      MB


        • 6 Years Ago
        Dataguy, you failed to include all of the truck based SUV models in your numbers.

        Toyota makes the Seqouia, the 4Runner, and the Land Cruiser, all of which are built on truck frames. You should include these models in your analysis of whether or not toyota makes twice as many trucks as hybrids.
        • 6 Years Ago
        Here is the December 2008 and Year to Date sales for 2008 for Toyota:

        http://scionnews.net/2009/01/06/toyota-reports-2008-and-december-sales/

        If you add the Total Pickup line to truck based SUV sales (4Runner, Sequoia, FJ Cruiser, and Land Cruiser) you get 392,944. Frankly, you probably should go ahead and add in car based SUV's as well because his point is they are selling twice as many SUV's as hybrids and most people consider car based SUV's to be SUV's, plus they aren't very efficient either. That would give you 634,625, although that probably included hybrid Highlanders, which you stated was 19,391. Taking those out you still end up with 615,234, considerably more than twice all hybrid sales.

        Also, the 3,100$ per car average includes luxury and SUV hybrids which are no doubt biasing the number upward. I would be interested to see a breakout of profitability by individual hybrid model, and it would be especially interesting to see the sales prices and profit margins on gas vs hybrid Camry's and Highlanders since they have traditional non-hybrid counterparts.

        My suspicion is that they are passing a good chunk of the hybrid's additional cost on to consumers and some consumers are willing to pay it for the perceived environmental image it gives them or piece of mind. However most consumers are not and will only pay the hybrid tax if the hybrids operating costs can justify it.


          GoodCheer
          • 7 Months Ago
          "his point is they are selling twice as many SUV's as hybrids" He sure made it in an odd way by specifically using the words "selling twice as many gas-guzzling pickup trucks"
        • 6 Years Ago
        GUY, I really appreciate your DATA! It's always good to see actual numbers.

        Maybe you should also send them to Rush Limbaugh, since he claims that "nobody" wants a hybrid...?

        ( http://www.autobloggreen.com/2009/04/02/rush-limbaugh-blasts-green-car-movement-because-nobody-wants-h/)
      • 6 Years Ago
      I think that problem here is the time frame. I have heard that the 1st generation Prius cars were sold at a loss. At that time Toyota probably sold more pickups than Prius.
      • 6 Years Ago
      A common trait of these windbags (Limbaugh, Hannity, Coulter ...) is to simply make up things that support their case. It makes their job easier and they realize their audience isn't actually concerned about facts.
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