By on September 9, 2008

Hail to the king, baby

Toyota doesn’t want to gloat or anything, but it’s going to make real money on its new Prius. “We reduced costs of hybrid systems for the current Prius by 50 percent from the first generation,” ToMoCo Vice Chairman Kazuo Okamoto tells Automotive News. “For the next-generation Prius, we will be able to cut costs by another half, so I think we’ve been able to ensure profitability will be similar to regular vehicles, such as the Corolla.” And though Okamoto-san comes across as lacking empathy for the plight of the American worker in these troubled times, this isn’t the case. In fact, emotion had nothing to do with Toyota’s decision to expand battery production to the United States. “It is very difficult to make the main parts of batteries outside Japan,” says Okamoto, “but we have to have battery production in North America. We just don’t know when.” Considering that the first American-built Prius is set to roll off the lines in 2010, US battery production was only a matter of time. And the fact that it should help Toyota pull down regular-car profits on the Prius is just the icing on the cake. Oh, and what of Bob Lutz’s hating on the plug-in Prius’s (theoretical) range? Okamoto confirms that plug-in Prius prototypes currently get only 8 miles of “initial EV range,” but that chasing the Volt’s (projected) 40 mile range would compromise cargo space and price point. What, that’s it? Aren’t space and cost are mere triflings, in the face of the monumental marketing achievement it will be when someday a company finally claims to sell cars that can go 40 miles without gas. I’m sorry, did I say someday?

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14 Comments on “Prius Profit Made In America?...”

  • avatar

    Any bets that Toyota, being the typically conservative company that they are, will actually bring out a Prius plug-in which can make 10-12 miles before the gas engine lights up?

    And that the Volt (if we ever see it) will probably only run about 10-12 miles on electric only before the gas engine lights?

    Promises, promises…. I’ve been reading nothing but promises and lies from GM for 40 years.

    Sorry, I don’t believe anything they say any more.

  • avatar

    Anything can happen in that mythical year…21002010

  • avatar

    Here is a non-subscription link for a similar story:

    Reuters – Toyota Plans

  • avatar
    John Horner

    Hmmm, it sounds like the Prius’ design objectives were set by rational engineering types while the Volt’s objectives were set by pontificating politician-MBA types (cue Lutz).

    The range-on-electric question involves a direct trade-off with cost and weight. Batteries are expensive and heavy. More batteries means a longer range, a heavier vehicle and higher costs. Weight is the enemy of efficiency, so adding battery capacity is also a game of diminishing returns.

    Cell phone and laptop makers grapple with this trade-off all the time.

  • avatar

    I guess I am really uninformed but what is the selling point of being able to go 10 miles electric only, when you look at the price premium. I know the Prius is going to get great mpgs but 10 miles just doesn’t seam like much of anything except gloating rights. That would get me to the grocery store, but not back. I guess I could do a round trip to the gas station on electric only. I could make my round trip to work incuding going home for lunch, but I think I’m a rare case living 1.8 miles from work. I would rather walk or ride my morotcycle than pay a huge premium for a limited electric range.

  • avatar

    Hats off to Toyota for their efficiency. Too bad the Big 2.8 and UAW can’t compete against them.

  • avatar

    Redbarchetta-I think the point here is that there won’t be a huge premium for that eight to ten miles. I expect the next-gen Prius to be a plug-in with that sort of range, yet cost about the same as the current model.

    That’s the problem with the Volt-either it will cost a lot more than the Prius (maybe close to double), or GM will have to take a loss of thousands of dollars, possibly tens of thousands, per car sold. And GM can’t really afford many loss leaders right now.

  • avatar

    I find the Japanese companies do things in logical order, a bit at a time. The idea is not to overwhelm yourself with biting off too much of a challenge at one go. Make sure it works.

    GM in particular does things in searing technological flashes, and I can only remember one that worked well, the 1965/66 Olds Toronado, and that’s almost a lifetime ago, when I was an mechanical engineering student at university.

    The Volt is a go-for-broke product. Too much new technology all at once. Who cares if it offers a 40 mile pure electric range instead of 10 if:

    a. It costs twice as much as a new model Prius.

    b. It costs twice as much as a new Prius.

    c. It has the typical dependability of a far-out new GM product, a company where reliable intake manifolds for a 25 year old V6 are apparently beyond corporate capability. And where saying you’re sorry about screwing the customer for a fourth time for inadequate shit NEVER happens.

    Americans, hold onto your $50 billion.

  • avatar

    Well, the Volt has most of the full-size battery of a regular EV plus a regular gas engine very nearly big enough for a Volt-sized car. Esesentially, a Volt buyer is buying a regular gas-powered car and an EV.

    I think Okamoto is right… you have to look for the tradeoff and, at this time, the smaller batteries of the Prius makes much more sense economically and in the packaging. And they can sell it profitably? It’s a winner.

    I think the trunk in the Volt is going to be surprisingly small and the rear seat will be fairly cramped. The only thing the Volt will have going for it is that 40 mile range. At that price, it’s difficult to see it making a lot of sales.

    Of course, a more Prius-like profile vehicle for GM would only make sense if GM could build it and sell it for Prius-like prices. I doubt they can do that… look at the BAS system and two-mode hybrid vehicles. GM can’t seem to produce and market them economically.

  • avatar

    Rather than a plug-in Prius, I would prefer to see the next-gen Prius get even better gas mileage.

    A solid, real-world 50-55+ MPG would be nice. And it’s reasonable to hope for, too!

  • avatar

    Geotpf if that’s the case that it will be included in the next Prius than the idea is a winner, your basicly getting it for free. But to pay several thousand more like I have been hearing online doesn’t make too much sense to me. I know it would never cost the stupid price of a Volt, but even $5000 more for 8 miles of EV is a lot of money for almost nothing. If I were them I would set a 20 mile EV range as the minimum target, who cares about competing with the Volt that is going to be a sales failure if it even goes on sale.

  • avatar

    Redbarchetta, It appears the Prius will be available in both “plain” and “PHEV” editions. If the price of the optional battery increase isn’t to your liking, you should still be able to get the base car (which will almost certainly be more capable and get better fuel economy than the current Prius) for about $22K (further precipitous declines in the dollar notwithstanding).

  • avatar

    Okamoto-san speaks the truth. Panasonic will build a battery factory in the US but not for 3 to 4 years. It will need to be located somewhere between MIss. and KY.

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