Batteries Limit Additional Production of 2010 Toyota Prius

Joshua Duval
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Although the success of the 2010 Toyota Prius has helped ease the Japanese automaker's bottom line, the hybrid's capacity to do so in the future may be limited. Despite Toyota's efforts to increase production of its popular hybrid, a battery shortage may hinder additional production.

"The new Prius model has been excessively popular, inconveniencing some of our customers, and the factories are working overtime at full capacity," said Toyota's senior managing director, Takahiko Ijichi. "Unfortunately, the batteries are not catching up with demand. Production of the batteries needs to be increased in order for our production to go up."

Panasonic EV Energy Company, which makes the nickel-metal hydride batteries for the Prius, cannot produce more than 500,000 batteries annually at this time, according to Ijichi. He said Panasonic plans to boost capacity to 1 million units by next summer.

Executives from other companies criticized Toyota's decision to lower the price of the Prius to compete with the 2010 Honda Insight hybrid because it would reduce profits, but Ijichi said the Prius still has healthy margins because production costs fell 30 percent from the last model.

"In terms of the Toyota lineup, I'd say it's probably in the midlevel of profit," says Ijichi.

The success of the 2010 Prius in Japan has Toyota predicting a domestic sales increase--the first in five years. In its home country, waiting lists at dealerships are months long. Here in the U.S., the Prius is handily beating its main competitor, the Insight.

Source: Automotive News

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