According to reports out of Tokyo, battery bottlenecks are hurting efforts to boost output of the strong-selling 2010 Toyota Prius. Toyota officials believe that the shortages could persist into next year.
Currently, Toyota's production capacity for Prius is approximately 500,000 units, but demand is outstripping the supply. Toyota's battery supplier, Panasonic EV Energy Co. is unable to produce more of the nickel-metal hydride batteries used in the Prius, limiting Toyota's hope to capitalize on the current demand. "The new Prius model has been excessively popular, inconveniencing some of our customers, and the factories are working overtime at full capacity," Takahiko Ijichi, Toyota senior managing director, said at the company's quarterly earnings announcement.
Amid a sea of slow-selling Tundras and Sequoias, the third-generation Prius is a bright spot in an otherwise gloomy 2009 for the company that now holds the title of the world's biggest automaker. Launched at the same time as the 2010 Honda Insight, the Prius is outselling its rival. While the cars are often directly compared, the Insight is smaller and significantly less expensive than the Prius. Drawing on its large owner base, the success of the Prius in Japan is one reason Toyota says it will post its first domestic sales increase in five years.
Even with strong sales, plans for adding Prius production with a new plant in Tupelo, Mississippi are still on hold. The battery shortage is one reason behind the plant's indefinite delay. Panasonic's production capacity is reportedly increasing, and should reach 1-million units by mid-2010.
In an unrelated announcement that provides perspective on this topic, capacity for U.S. battery production received a significant boost. On August 5th, the Obama Administration moved to release $2.4 billion in grants to accelerate battery and electric vehicle development and manufacturing in the U.S. In the announcement from President Obama, details reveal that $1.5 billion of the total will go toward the battery industry.
Specific examples include the $95.5 million grant to Saft America, Inc. for construction of a new plant in Jacksonville, Fla. on the site of the former Cecil Field military base. The plant will manufacture lithium-ion cells, modules and battery packs for military, industrial, and agricultural vehicles. East Penn Manufacturing Co., in Lyon Station, Penn. is set to receive $32.5 million grant to increase production capacity for their valve regulated lead-acid batteries and the UltraBattery, a lead-acid battery combined with a carbon supercapacitor, for micro and mild hybrid applications.
It is the Obama Administration's goal to help jump-start the battery industry in the U.S. The official strategy sees these grants helping to accelerate technology development and reduce the cost of high-tech batteries, with the ultimate goal of making hybrid-electric and pure electric vehicles more affordable, thereby stimulating their demand at the retail level.