Toyota Announces Price Reduction On Prius Hybrid Batteries

[usbseawolf2000]

Toyota/Lexus/Scion Pressroom: Toyota Announces Price Reduction On Prius Hybrid Batteries

Toyota Announces Price Reduction On Prius Hybrid Batteries

With More Than 600,000 Vehicles on the Road,Toyota Also Looking at HV Battery Remanufacturing

09/24/2008
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.

For those that needs a replacement out of warranty due to accident or whatever reason, you can get brand new one for $1,863.84 from Bob Bridge Toyota.

[Rybold]

I wonder if this means that Toyota renegotiated the wholesale of the materials that they use to make the batteries? Something happened. Interesting.

[redhandeddenial]

thats really good news for all those tolls citing the replacement cost/ rates

[Winston]

$1850 for a discount price for a battery is pretty good. That will bring the used battery prices down even lower(maybe $500). That is really insignificant when you consider that the Prius will never need an alternator, brake jobs, etc.

[usbseawolf2000]

When was the last time any manufacturer lowered the engine or transmission replacement cost?

Camry automatic transaxle costs $2,357.55 (discounted price), making it $800 more expensive.

HV battery pack is maintenance free so there is no need to change liquid and has 8-10 years / 100,000-150,000 miles warranty. Much longer than engine or transmission warranty. Why are people still concern about the HV battery replacement?

[ericbecky]

In every event or presentation that I have been a part of, there is always at least one question about battery life. This is a great article for me to have on hand for people who ask the question.

I think people ask about it since it is different than what they have in their current car.

[Celtic Blue]

Considering that $1,863.84 figure is from before the price mark down if I recall correctly, I wonder if they will be knocking some off soon? Keep in mind that Bob Bridge Toyota is still making a profit off that...so the retail list is probably twice dealer cost.

[Tideland Prius]

Well there you go, we finally have a definitive cost (or at least cost to the consumer).

[FL_Prius_Driver]

Originally Posted by Rybold

I wonder if this means that Toyota renegotiated the wholesale of the materials that they use to make the batteries? Something happened. Interesting.

What happened is what every old time manufacturing expert knows....product costs continually, steadily go down with time. (I could babble more on this, but I will restrain myself.) This is true for everyone in the entire supply chain as well as Toyota/Panasonic. This change has been happening for some time, so do not read into the above change a dramatic recent shift.

What does happen is that price does have significant jumps down. Companies keep the price steady until it the price/cost mismatch starts to adversely affect the overall car sales picture. Think of what happens to Prius sales now and in the future if they charge $3000 for a $900 battery. It comes back to haunt them if they keep it up for too long. (e.g. Honda coming out with a much less expensive hybrid? A third party supplier takes away most of the Toyota battery resale business, etc.)

[Patrick Wong]

It is interesting to see that the Classic battery containing 38 modules, now costs less than the 2G battery containing 28 modules. Hence it appears that the price was set based upon market conditions, not a fixed % markup over product cost.