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All Priuses Should Be Plug-in Hybrids by 2014 -- No Matter What Toyota Says Now

According to a rather amazing story in the Nihon Keizai Shimbun (Japan's equivalent of the FT or the WSJ), all Toyota Prius cars will become plug-in hybrids -- i.e., fully electric with a backup gas motor -- by 2014. Officially, Toyota says that's bunk -- but it shouldn't be.

U.S. Toyota spokesman John Hanson called the report "categorically untrue," but it's unlikely to have sprung completely out of thin air. The Nikkei story claims that the 2014 Prius-with-a-plug would be sold at the same price as current models. That would be a huge move, since the plug-in version will definitely be more expensive to make. Toyota would have to be contemplating a temporary loss -- as it did when it launched the U.S. Prius in 2000.

A shrewd long-term play?
Losing money initially on an enhanced fourth-gen Prius could actually turn out to be a smart strategic move. With more than two million made so far, the Prius holds a commanding position as the world's leading hybrid. Adding a plug -- and 13 miles of electric-only range -- just as other electric cars are hitting the road could give the Prius some significant added value, setting the company up for an electric strategy it's so far been slow to develop. Not all buyers would use the plug-in capacity, but they're likely to appreciate that it's there.

At, say, $26,000, the very affordable plug-in hybrid Prius would certainly steal some thunder from the admittedly more sophisticated Chevrolet Volt, which costs almost twice that at $41,000. The Volt plug-in hybrid has far more battery range, but the half-price Prius would present an attractive and affordable alternative for people with fairly short commutes.

Already planning a rollout
A little background is necessary here: Plug-in hybrids, which in effect become electric cars for short-range commuting, are an interim step in the march toward electric cars. Toyota was already planning to field one. Converting all Priuses to plug-in hybrids would be a radical step, but not a totally crazy one. Toyota is currently scheduled to debut the plug-in hybrid version of the third-generation Prius next year, at a price estimated around $33,000.

That's a $10,000 hike over the 2011 model, which is in line with the added costs of the car's lithium-ion battery pack. But by 2014, the Nikkei report says that Toyota is likely to have lowered the cost of its li-ion packs -- especially at the scale of the Prius' worldwide production.

The Prius "family" is certainly growing, with both a wagon version called the V arriving this summer, and a smaller, more fuel-efficient version (the C) next year. Toyota is plainly ramping up the Prius as the centerpiece of its line-up -- and making it more enticing has to be a big priority. But the plug-in hybrid has always been controversial within Toyota, with some U.S. company executives questioning the utility of the car even as they announced plans to roll it out.

The 2012 plug-in hybrid Prius is a bit of a stealth model, which is perhaps why Reuters had to correct an early report on the Nikkei story that said Toyota would be debuting the technology in 2014. Many think that Toyota was goaded into creating its own plug-in Prius because of strong demand from environmentalists. The desire for an even greener "100 mpg" Prius created a market for conversion companies, mostly in California, which charged $10,000 to $15,000 to add on battery packs and software.

According to Felix Kramer of, a long-time crusader for plug-in hybrids (and conversions):

It's fantastic if it's true, and companies all over the world use forward pricing in this way.
But Toyota spokeswoman Jana Hartline, citing sources within Japan, described the Nikkei story as "inaccurate":
We never speculate where the Nikkei gets its stories. Our plan is still to launch the plug-in Prius in 2012, and we don't have a specific price point for it.
Hanson said Toyota is expecting that only "a small percentage of Priuses" will have the plug-in hybrid technology. So it might be untrue, or it could be a subject of ongoing debate within Toyota. Either way, it's very interesting.


Photo: Toyota
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