Toyota: A 'Smart' Housing Play for All Long-Term Investors

Stop thinking of Toyota Motor Corp. (TM) as just a car company.

Henceforth, think of Toyota as both a car manufacturer and a key supplier of what may well become THE component of the coming “smart” energy revolution.

Oh, and in case somebody in Washington is listening: unless you want billions of taxpayers’ dollars to go down the drain, you’d better get General Motors in touch with its inner HEMS. (You too, Ford Motor Co. (F)).

Typical of so much important energy and environmental news these days, there’s been almost no mention in the U.S. of Toyota’s new Home Energy Management System – HEMS for short.

But a product like Toyota’s HEMS appears likely to become the lynchpin of a “smart” energy revolution that changes everything about how energy is produced and consumed by your car or truck as well as your home.

Toyota’s HEMS will be capable of carrying out the smart energy revolution’s primary directive – namely, optimizing and minimizing energy production and consumption – by serving both as a smart meter and as an energy storage system.

As a smart meter, HEMS will serve to control the energy usage of home HVAC systems, lighting and appliances. As an energy storage system, HEMS reportedly will be capable of working in combination with an onsite solar photovoltaic system, storing that power for use on demand in either the home or – and this is where it gets really cool – in a plug-in hybrid or all-electric vehicle.

Think of the marketing advantage Toyota will enjoy when, starting probably in 2011 or 2012, it will be able to sell its plug-in vehicles together with HEMS systems that basically will enable drivers to fuel up for free while simultaneously slashing their home utility bills.

Not surprisingly, Honda Motor Co. (HMC) is working on something similar. In its own way, Best Buy Co. (BBY) is too, the electronics retailer having recently announced plans to sell electric motorbikes.

The era of crossover energy and household marketing is rapidly coming into view.

Disclosure: No Positions

Comments

[Mad Hedge F...:]

They're making a killing on cash for clunkers. Perhaps it was the newspaper gene in me that made me screech my car to a halt when I saw a near riot in progress at my local Toyota (TM) dealer. The showroom was more jammed than the unemployment office, with eager salesmen recalled from vacations, manning card tables set up in every available space. I managed to grab one peripatetic salesman by a lapel, who gushed that they sold 45 cars yesterday, compared to ten for a normal Friday, and that 35 of these were the fruit of the “Cash for Clunkers” program. Sure I could get a $4,500 credit for my 1995 BMW (17 mpg), and apply it to a new Prius (50 mpg), taking the price down to $19,500 and the monthly payment to $450/month for five years. In fact, the government stimulus program was so successful, that it ran out of money in the first four days, and congress rushed to triple it to $3 billion on Friday. It was like the survivors of a ship torpedoed at sea were swimming frantically for the only piece of wreckage that floated. Assuming that the average car drives 10,000 miles a year, and the average swap generates a mileage improvement from 15 mpg to 27 mpg, junking 750,000 clunkers will save 30 million barrels of crude a year, 1.5 days of our total annual consumption, or three days of imports. I asked to see the cars that were traded in and was told that the lots for the dealer, the used cars, and the detailer were all full, but I could see some if I went to the Target nearby where they were renting extra spaces. There I saw the fleet condemned to clunkerdom, GM Safari’s, Jeep Cherokees, Buick Regals, Dodge Ram pickup trucks and vans, and Chrysler minivans by the dozen, all with “CFC” marked on their windshields, a certain death sentence. These sorry excuses for transportation will never belch blue smoke, nor drip oil on our interstates again. I can’t imagine a sorrier commentary on the management failure of the US car industry for the last 30 years.

Aug 03 09:12 AM

[Midas1:]

Toyota is one of the smartest companies in the world. It is also the most respected company in the world (Forbes), #1 for customer loyalty and #3 for innovation (which will change to #1 rest assured). Perhaps most endearing (and refreshing) is the honesty from executives. A recent online article noted how the head of North American Operations stated Toyota had lost its vision, etc. and how more companies should admit when they make a mistake instead of making excuses. The Japanese culture could teach us much about values at this time. Another example is Japan Airlines. The company's CEO took a salary cut to about $90,000 per year, eats with employees in the cafeteria and feels management should suffer with employees in the economic downturn. I wish more companies would adopt the same thinking.

Aug 03 03:49 PM

[Midas1:]

The author did not mention that Toyota has been in the prefab housing business for years. Toyota is well-positioned to develop home systems as discussed in this piece.

Aug 03 03:51 PM

[jerrydd:]

Badly written article and doesn't mention about the 5kw battery in it. But this system for the US needs a much larger battery, at least 10kwhrs to really make a difference.


Now if it is combined with a plug in electric that's home much of the day then it could really save or make money by using cheap power when available and selling power at peak rates, 3-8x's as much as normal non timed rates.

By using the Plug in hybrid, EV's battery pack, inverter and even the engine to put power back in the grid when they need it could make money instead of paying for power. And the fuel if it's used.

I'd bet it's too expensive though for at least the next 7-10 yrs. but it how the future grid will work.

Aug 04 03:52 PM