Over the past few days, as the argument between Press and Toyota has heated up, I kept asking myself why this would be a big deal? Why is Toyota pushing this so hard. Are they constrained by regulators somehow? Could they be in real legal trouble if it came to light that the Japanese government did fund their creation of the Prius?
Businessweek, the journal that started the whole controversy by publishing the comments by Press, has now addressed the issue. It's all about reputation.
Why is this question of direct investment by the Japanese government such a big issue?So, it's pride and business rep that Toyota is trying to protect. That's why they are pushing their message so hard. They developed the Prius and they did it on their own (can you see them pulling up their bootstraps/pants as I say that?)
There has been enormous tension between U.S. automakers and Toyota over gas-electric technology. The U.S. auto industry has spent billions of its own money, as well as government grants, pursuing electric cars that run on batteries, as well as those that run on hydrogen fuel cells.
U.S. automakers dismissed gas-electric hybrid systems in the 1990s, writing them off as too expensive and inefficient. Toyota, though, pressed the technology, turning the Prius into a sales and public relations phenomenon. Toyota is the world-wide leader in hybrid vehicle sales and, on the back of the Prius, is widely viewed by the public as the “greenest” car company in the industry. U.S. auto executives have long maintained the only reason Toyota was able to bring its hybrid vehicles to market without losing billions was because of government subsidies.
A large part of Toyota’s Prius narrative has been that it developed the system entirely on its own, and that it had no unfair advantage over Detroit. Press’s remarks to BusinessWeek contradicted that.
Business Week does a good job of laying out the full story, including some previous quotes by Press (in front of Congress, no less) saying Toyota had developed the Prius internally.