IF AT FIRST THE TALKING POINT DOESN’T SUCCEED…. George Will just can’t seem to stay away from environmental policy, no matter how much trouble it gets him in.
On Sunday, Will argued on ABC’s “This Week” that Toyota’s Prius is only affordable because the company “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.”
The conservative pundit liked the observation so much, he repeated it in his Washington Post column today.
[Obama] says: “If the Japanese can design [an] affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same.” Yes they can — if the American manufacturer can do what Toyota does with the Prius: Sell its hybrid without significant, if any, profit and sustain this practice, as Toyota does, by selling about twice as many of the gas-thirsty pickup trucks that the president thinks are destroying the planet.
Will already seems to be backpedaling, at least a little. On Sunday, Toyota sold every Prius at a loss. On Thursday, Toyota sells every Prius “without significant, if any, profit.” What constitutes a “significant” per-sale profit? Will doesn’t say.
We talked a bit yesterday about Will’s latest error, but this item helped explain the facts in additional detail.
By George, Toyota and independent analysts say the Prius is a money maker for Toyota, and it has been since 2001.
As we noted last week, Toyota and Honda, though both struggling in the recession, are making about 300,000 yen (US$3,100) on each hybrid they sell, a number similar to what they are making on gasoline-only cars, according to Japan’s Nikkei. The Nikkei adds that “Toyota appears to have earned gross profits of around 100 billion yen (US$1 billion) on its sales of second-generation Prius hybrids last year.” And in spite of the recession, pre-orders are rolling in for the third generation, solar-roof-optional, 50-MPG 2010 Prius hybrid.
For years, the research and development costs that Toyota poured into its flagship hybrid car had kept it from earning true profits, something that it sought to quietly play down. While the company still doesn’t reveal exact figures, financial analysts have backed up the company’s claims.
But as Mike pointed out recently, “since [R&D] can be spread over many vehicles, over a long period of time, and since it can help automakers future-proof (a lot of hybrid tech will probably be useful in plug-in hybrids and electric cars), it would probably cost more not to make those investments.” […]
Ultimately, the Japanese automakers profits from hybrid cars can’t be completely verified. But that doesn’t mean they aren’t making profits — and evidence suggests they are, and increasingly so.
Maybe Will should stick to baseball?
