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Summary:

When Toyota detailed plans this summer to lease hundreds of plug-in hybrids based on its popular Prius model by year’s end, the automaker called the program “a key first step in confirming how and when we might bring large numbers of plug-in hybrids to global markets.” Today […]

When Toyota detailed plans this summer to lease hundreds of plug-in hybrids based on its popular Prius model by year’s end, the automaker called the program “a key first step in confirming how and when we might bring large numbers of plug-in hybrids to global markets.” Today Toyota both nailed down a time frame and hinted at a price for the next step: launching the plug-in hybrid versions of the Prius in 2011, initially at a scale of several tens of thousands of vehicles per year. Toyota Executive Vice President Takeshi Uchiyamada also reiterated to Bloomberg reporters in Tokyo on Monday that the automaker plans to start selling an all-electric vehicle designed for short distances by 2012 — the year Toyota has previously said it plans to roll out an electric model based on the FT-EV for short urban commutes.

The hybrid leader’s plans to go ahead with the plug-in Prius in 2011 with a price tag that Uchiyamada suggested today could be as low as $35,000 marks a milestone for lithium-ion battery technology. Earlier this year, Toyota commented that the benefits of lithium batteries — small fuel economy gains in hybrids over nickel metal hydride (NiMH) batteries due to lighter weight — did not justify the higher cost. But for the upcoming plug-in hybrid model, Uchiyamada said today the pricing will be “affordable,” at less than $10,000 above the cost of the regular Prius in order to make the model cheaper than after-market conversion kits.

Selling at less than $35,000 (the third-generation Prius starts at $22,400), the plug-in Prius could undercut some of the highest-profile plug-in models slated to roll out in the next five years, including General Motors’ extended-range electric Volt (expected to cost around $40,000) and Fisker Automotive’s $47,400 plug-in hybrid Project Nina vehicle.

Firm details on Toyota’s plug-in model have been a long time coming: Today’s announcement comes more than three years after Toyota began working on lithium-ion batteries as an alternative to the NiMH batteries used in its Prius hybrid; nearly a year after the automaker revealed that it had engineered the third-generation Prius to package either a lithium-ion battery for plug-in capability, or an NiMH, for the current hybrid; and six months after Toyota first revealed plans to churn out at least 20,000 plug-in hybrids in 2012.

While the plug-in Prius marks Toyota’s first foray into lithium-ion batteries for propulsion in a vehicle slated for the mass market, the game plan Toyota described today highlights continuing focus on hybrid technology at a time when some competitors, including Nissan and Mitsubishi, are racing for an early lead in the market for all-electric vehicles. Uchiyamada told reporters today that sales for the 2012 electric model will likely be “a lot less” than the plug-in Prius.

The regular hybrid model, meanwhile, is hardly on the way out — which could mean continued dominance for Toyota in the green car market as it rides the momentum of its early lead and brand recognition with the Prius. According to Global Insight, hybrids are on track to account for some 5-11 percent of the U.S. market by 2015, up from 2.2 percent in 2007. And a recent Lux Research report estimates hybrids like the Prius could see sales of roughly 3 million units per year by 2020, regardless of whether oil prices spike or remain around $70 per barrel. But due to the high costs of lithium-ion battery technology, the report estimates plug-in hybrids would need oil prices to increase to $200 a barrel, “to achieve a similar level of success, and EV sales will be a factor of ten smaller, even at that price.”

But having seen the advantages first hand of getting out in front with a new vehicle technology, Toyota is putting some skin in the electric vehicle game. Starting in 2011, we’ll see how the hybrid leader fares in the plug-in market.

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  1. That’s awesome that Toyota is moving forward with plug-in hybrids for the global market. Prius sales in the US are incredible, and there’s clearly a demand for these sustainable, alternatively-powered automobiles. If you’re interested in alternative energies and green cars, check out http://www.greencollareconomy.com. It has hundreds of case studies on emerging green technology. It’s also the largest b2b green directory on the web.

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