Nov 16, 2022 - Economy

Toyota Prius withers on the vine as EV strategy questions linger

Prototypes of Toyota's Prius 2.0L plug-in hybrid electric vehicle, left, and Prius 2.0L hybrid electric vehicle. Photo: Tomohiro Ohsumi/Getty Images

Toyota is debuting updated versions of the Toyota Prius hybrid car at the L.A. Auto Show amid growing speculation that the automaker — long vaunted for its sustainable vehicles — is falling behind on EVs.

Why it matters: Toyota is the world's largest automaker and one of the most efficient companies on the planet. When it takes a step, the ground rumbles.

Zoom in: Toyota has only one pure EV — and it's not doing well so far — after long insisting that hydrogen technology and hybrids like the Prius were the way to go.

  • Fellow traditional automakers like General Motors, Ford, Volkswagen, Hyundai and Kia are betting the farm on battery-only EVs that don't use a drop of gas.
  • Toyota, on the other hand, has only the bZ4X in that category — and it recently had to temporarily stop sales of the compact SUV due to a wheel defect.

The intrigue: For years the gas-sipping Prius held the undisputed crown as the hybrid car titan, with sales topping out at 236,655 in 2012, when the model represented nearly 1 in 7 of Toyota's sales.

  • At one point, there were several versions of the hybrid, including a smaller model called the Prius C and a larger one called the Prius V. Both of those are gone.
  • Through the first 10 months of 2022, Prius sales totaled only 29,944, representing less than 1 in 50 Toyota sales.

What they're saying: The automaker has done well with sales of other hybrids — such as the RAV4 SUV — but it's missing a big opportunity to get consumers to transition from the Prius to pure EVs, Edmunds analyst Ivan Drury tells Axios.

  • "It was like a gateway drug for a full EV — but there’s nothing in the lineup. They left a gaping hole there," Drury says. "They were in the driver seat for electrification, but they made a wrong turn."

The other side: Toyota says about half of its spending from 2022 through 2030 will be devoted to battery electric vehicles (BEVs), including plans to build a new $3.8 billion battery plant in North Carolina opening in 2025.

  • "We aim to offer reasonably priced mass-production BEV models in all global segments," Toyota spokesman Scott Vazin said in an email, adding that the company is targeting a zero-emissions future.
  • Part of that strategy involves a big investment in plug-in hybrids like the Prius Prime, which advocates argue are more practical than EVs because they can run on gas after the battery has run out.

Keep in mind: One reason the Prius has fallen out of favor is that it's a passenger car — and consumers have become more interested in SUVs and pickups, both of which Toyota is selling in droves.

Our thought bubble: Never underestimate Toyota. There's such a thing as being too early — so Toyota might be right on time to this party.

  • Plus, this is a company that devastated its American competition for years — and it has the engineering prowess and financial wherewithal to reinvent itself quickly.

The bottom line: "I would never count them out because they do make fantastic vehicles," Drury says. "There’s good reason for that. They’ve earned that reputation."

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