05/20/2008 10:14 AM

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Weekly Clean Energy Roundup May 21, 2008

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Global Sales of the Toyota Prius Hybrid Top 1 Million

Toyota Motor Corporation announced last week that its worldwide cumulative sales of the Toyota Prius have passed the 1 million mark. The Prius hybrid is now sold in more than 40 countries and regions, but the market leaders remain Japan and North America. In fact, North America has provided nearly 60% of all Prius sales, and reached 183,800 vehicles in 2007.

That sales pace has accelerated in early 2008, with 66,100 vehicles sold in North America in the first four months, a rate that would result in nearly 200,000 sales if continued through the entire year. In fact, Toyota sold 21,757 Prius hybrids in the United States in April, setting a record for April sales and making the Prius the third most popular vehicle in the Toyota line, trailing the Corolla and the Camry. See the Toyota press releases on the Prius global sales and April U.S. sales.

While Toyota is enjoying the lion's share of benefits from the hybrid vehicle market, Nissan Motor Company, Ltd. aims to profit from the next generation of plug-in hybrid and fuel cell vehicles. In April, the company launched a joint venture with NEC Corporation and its subsidiary, NEC TOKIN Corporation, to develop and mass produce advanced lithium-ion batteries.

On Monday, the new company, called Automotive Energy Supply Corporation (AESC), began full operations. The new company will invest $114.6 million over a three-year period in a manufacturing facility that will start producing 13,000 batteries per year in 2009. At full capacity, the plant will manufacture 65,000 batteries per year.

The batteries employ a compact laminated configuration with lithium-manganese electrodes, which NEC TOKIN will manufacture at a separate facility through an additional investment of $105.1 million over the next three years. AESC intends to install the batteries in electric forklifts next year, and Nissan plans to use the batteries in both a hybrid and an all-electric vehicle starting in 2010. Nissan claims that the batteries deliver twice as much power as the nickel-metal hydride batteries used in today's hybrid vehicles. In field tests exceeding 60,000 miles, the batteries have demonstrated high performance without any safety problems, according to the company. See the Nissan press release.

U.S. Experts Say Biofuels Have a Minimal Impact on Food Prices

With global food prices rising rapidly, the chairman of the President's Council of Economic Advisers and the Secretary of Agriculture have both emphasized recently that the production of ethanol from corn has had little impact on food prices.

In testimony before the Senate Foreign Relations Committee last week, Edward Lazear, the chairman of the President's Council on Economic Advisers, concluded that corn ethanol is only responsible for about 3% of the increase in food prices over the past year. Lazear noted that global food prices climbed 43% between March 2007 and March 2008, with wheat prices up 123%, corn prices up 37%, and rice prices up 36%, but he attributed most of that price increase to increasing demand and reduced global crop production due to adverse weather conditions.

The U.S. production of ethanol from corn is responsible for only about a fifth of the price increase for corn, and on a global scale, ethanol production is responsible for about a third of the price increase for corn. Because corn represents only a fraction of the global food supply, ethanol production is estimated to be responsible for only 1.2 percentage points in the 43% rise in global food prices. See Chairman Lazear's testimony on the White House Web site.

Secretary of Agriculture Ed Schafer and his staff seconded that conclusion in a briefing on Monday, and also noted the benefits of ethanol production. U.S. crop and livestock producers have seen a 43% increase in fuel costs this year and a 67% increase in fertilizer costs, both of which are driven by high fuel prices. U.S. farmers are welcoming the increased crop prices, while the impact on the U.S. consumer is tempered, because only about one-fifth of our food cost is driven by the commodity cost.

As a result, the U.S. consumer price index for food has risen only 4%, while U.S. prices are expected to rise at most 6% in 2008. At the same time, biofuels have cut the global consumption of crude oil by 1 million barrels per day, helping to relieve the stress on oil supplies. U.S. ethanol production has cut the average retail cost of gasoline by 29-40 cents per gallon, according to a new report from Iowa State University. See the USDA briefing materials and the Iowa State report (PDF 350 KB).

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