Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, September 19, 2005

Toyota Going All Hybrid?

The Toyota Motor Corporation said this week that all its vehicles would eventually be run by hybrid gasoline-electric motors, as record fuel prices curb demand for conventional automobiles.

"In the future, the cars you see from Toyota will be 100 percent hybrid," Kazuo Okamoto, executive vice president, told reporters in Frankfurt Monday, without giving a specific timetable.

... The company is planning to sell 240,000 to 250,000 hybrids this year and a million a year by 2010. [This link courtesy of Jack]
But what if the price of gasoline does not stay this high in real terms? There are several good arguments for expecting world oil prices to stop rising (and probably to fall in real terms; see here and here). If that happens, there will be far less interest in hybrids, and Toyota would be unlikely to implement this plan.

For Toyota to be prepared, in case oil prices rise, is probably wise. For them not to announce a timetable, in case oil prices do not rise, is also probably wise.
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