It’s been a long time coming: Toyota (s TM) began working more than three years ago on lithium-ion batteries as an alternative to the NiMH batteries in the Prius, which can be more expensive, but store more energy with less weight. Today the company detailed plans to lease 500 plug-in hybrids with lithium-ion batteries, including 200 in Japan, 150 in the U.S., and 150 in Europe starting at the end of this year.
The upcoming lease program, mostly for government fleets, will use models based on the third-generation Prius (pictured) that can charge via standard household outlets — and will mark the first time this type of battery has been used for propulsion in a Toyota vehicle. It will also be one of the first on-road trials of this size for lithium-ion batteries in a plug-in hybrid car by a mainstream automaker — making it a major milestone for a technology that’s widely seen as the future of electric car batteries.
Toyota is hardly alone among big automakers working on models with lithium-ion batteries. General Motors (s GM) has chosen to use the chemistry for the batteries in its plug-in hybrid Chevy Volt, and Johnson Controls-Saft will use it for the batteries it’s supplying to Ford (s F). Honda (s hmc), which as recently as last year was worried about the safety, reliability and durability of lithium-ion batteries, has just launched a new joint venture with GS Yuasa to build and sell lithium-ion batteries for hybrids.
But the fact that lithium-ion batteries have made it to the demo stage in Toyota’s plug-in model represents a significant step for bringing lithium-ion on the road to mass deployment. For the raft of startups (A123Systems, Sakti3, Boston-Power) working on their own lithium-ion batteries with the idea of supplying or partnering with makers of electric and plug-in hybrid vehicles, Toyota’s progress could be a double-edged sword.
Toyota said in January that it engineered the new Prius to package either a lithium-ion battery for plug-in capability, or an NiMH for the regular hybrid versions of the vehicle, and called the plug-in Prius fleet program “a key first step in confirming how and when we might bring large numbers of plug-in hybrids to global markets.”
Depending on the timeline Toyota ends up adopting, it could spur other car companies to try to accelerate their plug-in efforts and turn to startups for a quick fix. This is part of the reason why Daimler said it decided to use Tesla Motors’ battery pack technology for its first all-electric model — it will help it get a car out sooner than if it takes the time for in-house R&D.
But as Toyota masters lithium-ion battery technology and ramps up production through its joint venture with Panasonic, it could become a behemoth battery provider. With its manufacturing expertise, a head start on hybrid technology and branding and its global reach, Toyota’s entry into the world of battery supply, if it comes quickly, could mean tough competition for smaller startups that are awaiting government funds to build their first factories or just now starting to ramp up production.
2010 Prius image credit Toyota