Toyota Announces Price Reduction On Prius Hybrid Batteries

September 24, 2008

September 24, 2008 - Portland, OR - Toyota Motor Sales (TMS), U.S.A., Inc., announced here today at its Sustainable Mobility Seminar that pricing for first- and second-generation NiMH Prius hybrid vehicle (HV) replacement batteries have been reduced by more than 10 percent. The price of the 2000-2003 first-generation Prius battery has been reduced to $2,299, while the 2004-2008 second-generation Prius battery is reduced to $2,588. Prior to this most recent price reduction, both batteries were priced at $2985.

"We are very pleased with the performance durability of the NiMh battery powering the Prius," said Gary Smith, TMS corporate manager for Product Quality and Service Support. "However, there will be rare cases where owners will require a hybrid battery replacement beyond the mileage limits of the 10-year 150,000-mile warranty or 8-year/100,000-mile warranty in non-California compliant states. For the most part, these high-mileage customers have a positive ownership experience and want to keep their vehicle. We've stated from the beginning that battery replacement costs would continue to decline due to technology and volume related advancements, and we believe this will continue."

Toyota also is studying the business case for remanufacturing Prius HV batteries in North America to further lower replacement costs. As the
popularity of the Prius – and units-in-operation – continues to grow, this venture is seen as a positive step in customer satisfaction with high-mileage owners who tend to keep their vehicles for an extended period of time.

Unique to the industry, Toyota is the only automaker to design, develop and manufacture its own hybrid batteries. Its Panasonic EV Energy (PEVE) Co., Ltd. (60 percent share) joint venture with Matsushita Electric produces all NiMH batteries for all Toyota and Lexus hybrids, as well as batteries for competitive hybrid models.

Last May, PEVE announced plans to establish a second battery production plant in Japan, to meet the growing global demand for HV batteries. Last month, Toyota announced that it would have a total production capacity of one million NiMH hybrid batteries per year by 2010.

Additionally, later this year, PEVE will be the first manufacturer to begin assembly-line production of lithium-ion batteries for automotive applications. These first-generation batteries will be used in a limited-volume placement program for a new lithium-battery powered PHV that will be leased beginning in late 2009 to fleet customers in Japan, Europe and North America.

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