2. The Role of Technology in Reducing Road Transport Emissions Climate Change: The Business Forecast 5 th October 2005 Graham Smith MD Toyota (GB) PLC Chairman, Low Carbon Vehicle Partnership

3. Rising transport emissions threaten the UK achieving its Kyoto and domestic CO2 targets Source Climate Change Programme Consultation

4. Toyota’s Guiding Principle ZeroniseMaximise

5. Reducing road transport emissions will require a combination of measures  Reduced vehicle emissions  Low carbon / alternative fuels  Improved driver behaviour  Reduced vehicle use  Better freight distribution

6. Estimated costs and savings of alternative technology Adapted from E4Tech – A Strategic Framework for Hydrogen Energy in the UK

7. - The Ultimate ECO-Car GTL CNG Electricity Petrol Diesel Alternative fuel Toyota D-CAT Common-rail HSD THS D4 Lean-burn VVT-i FCHV EV Hybrid Technology Toyota’s Multi Path Approach

8. Future evolution of Hybrid Technology Prius: gasoline FINE-S: hydrogen EngineFuel Cell Secondary battery Motor Power control unit Secondary battery Motor

9. Environmental concerns are a low priority for most private car buyers  Whilst mpg is reported as a key decision making factor there is little evidence to demonstrate this  Motorists have a poor understanding of vehicle running costs and will bear additional annual costs of £1-1.5k before considering downsizing their vehicles  Public understanding of vehicle emissions and new technology is very limited  Whilst motorists are concerned about climate change few understand its causes and less take personal responsibility Car-buyer reported concerns Top priorities Price Fuel consumption Size/Practicality Reliability Comfort Safety Running costs Style/Appearance Some influence Performance Image Brand Insurance Engine size Equipment levels Low priorities Depreciation Experience Sales Package Dealership Environment Vehicle Emissions Road tax Alternative fuel

10. Moving consumer attitudes in favour of low carbon vehicles is a major challenge

11. Low Carbon Vehicle Partnership Accelerating a sustainable shift to low carbon vehicles and fuels in the UK Stimulating opportunities for UK businesses

12. Summary  Technology offers the potential to significantly reduce greenhouse gas emissions from road transport – but responsible vehicle use will also be an important contributor  The range of fuel and vehicle technology options are wide – most vehicle manufacturers believe hybrid technology is an important step in the evolution of technology to zero emission vehicles  Low carbon technologies come at a financial premium and current incentives are inadequate to change the attitudes and purchasing behaviours of most consumers  The transition to a low carbon future needs a partnership approach the LowCVP is delivering.