Toyota planning battery production in U.S.

Posted Mon Sep 8 2008 7:51 PM by Viknesh Vijayenthiran

Toyota has already confirmed plans to start building its next-generation petrol-electric Prius hybrid at its Blue Springs plant in Mississippi in 2010, as well as construction of several battery plants back in Japan to meet growing demand for its hybrid vehicles. Latest reports indicate that the carmaker will also start building batteries in North America in an effort to drive down production costs and avoid currency fluctuations.

One of Toyota’s main goals is to achieve a profit margin close to that of standard models, vice chairman Kazuo Okamoto revealed to Automotive News.

"We reduced costs of hybrid systems for the current Prius by 50% from the first generation," he told reporters. "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."

Okamoto also confirmed that Toyota will move some battery production to the U.S. but wasn’t willing to say when or what type, be it nickel-hydride or lithium-ion. "It is very difficult to make the main parts of batteries outside Japan, but we have to have battery production in North America," he explained.

Another reason Toyota is keen to drastically reduce costs for the Prius is because of the expected price of Honda’s upcoming Insight hybrid, which the rival carmaker claims will come to market at a price significantly below most hybrid vehicles on sale today. The Civic Hybrid’s base price is currently $22,600, and the Prius starts at $21,500.

Reader Comments

Tue Sep 9 2008 6:51 AM
Kamacurus says

WooHoo. The Insight is shaking things up.
Good for us consumers.
Tue Sep 9 2008 8:38 AM
Laz says

Smart move to crank out more hybrids with battery production in North America. I'm not sure if the US will allow for this type of production but Mexico is a short drive...

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