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Toyota Cuts 30% of Hybrid System Cost in New Prius

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by Danny, Apr 9, 2009.

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  1. Danny

    Danny Admin/Founder Staff Member

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    According to an article over at Ward's (requires subscription, which I don't have), Toyota was able to slash its hybrid system costs an estimated 30% on the all-new 2010 Prius. The photo above shows you one reason why - smaller size.
    Sounds like potentially good news for pricing, which we hope to see on Earth Day, April 22nd.
    If anyone has a subscription to Ward's and would like to provide more details on the cost reductions, that would be awesome.
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  2. drees

    drees Senior Member

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    That's how they're able to pack more features in for the same price... Another generation or two of Toyota HSD and the "hybrid price penalty" should largely disappear.
  3. Frayadjacent

    Frayadjacent Resident Conservative

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    'Smaller' is not necessarily synonymous with 'less expensive'.
  4. jayman

    jayman Senior Member

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    That's good news. With the original development cost amortized over all those Gen II models, and with mass production experience and cost savings, the costs should decline further

    Now if only we could do something about those restrictive battery patents ...
  5. finman

    finman Active Member

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    excellent point. seems when things shrink, it adds cost due to the engineering to get things smaller. Big and clunky are cheap.
  6. usbseawolf2000

    usbseawolf2000 HSD PhD

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    30% cost reduction on top of making it more efficient and powerful! Amazing!
  7. drees

    drees Senior Member

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    In the automobile world, mass is often directly attributed to cost as raw materials account for a significant portion of cost.

    So by reducing the size of a motor by 50%, now they've significantly reduced the weight (perhaps not by 50%), but in addition, they've also likely reduced the part count and reduced manufacturing complexity at the same time.

    So a one time engineering cost has resulted in a cost reduction per part made for as long as they manufacture the part.

    The electronics world is a great example of how shrinking parts has significantly reduced costs.
  8. Frayadjacent

    Frayadjacent Resident Conservative

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    Notice, I said 'not necessarily synonymous'. It's not a universal law that smaller is cheaper. ;)

    Sure, using less copper, less steel, less aluminum will lead to cost savings.

    That, however, doesn't account for decreased production costs, distribution costs, material supply cost.... etc.

    Basically, there are more factors than reduction in size that lead to cost savings. ;)
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  9. DaveinOlyWA

    DaveinOlyWA 3rd Time was Solariffic!!

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    i think what we have here is a matter of "pre"ception.

    i found it difficult to quantify a "penalty" when i got a car that had features usually reserved for cars north of $30,000 and getting 50% better gas mileage.

    granted the adage "you get what you paid for" does not always apply, but i have to say i agree with the multitudes of surveys that year in and year out, say for the money... its hard to go wrong with a Pri
  10. usbseawolf2000

    usbseawolf2000 HSD PhD

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    A few interesting about this cost reduction and reaction from Honda.

    Norio Ano, a Honda official overseeing Insight’s development, said Wednesday that further cost-cutting and leaner production would be needed at Honda, if Prius is going to be priced close to the Insight.

    “We will have to go back to scratch and review all our procedures from step one,” he said. “It’s hats off to Toyota if they can make it work as a business at the prices being reported.”

    The revamped Prius gets 50 mpg, according to Toyota.

    “We almost gave up on reaching our goal for mileage but we stuck to it,” Otsuka said. “The Prius is the iconic hybrid.”


    http://www.flcourier.com/News/2009/0410/wheels/0002.html
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  11. a priori

    a priori Canonus Curiosus

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    :eek:

    All I have to say about the premium you pay for a hybrid when buying the Prius may be summed up with this phrase: :censored:

    I think if I read this again, I might just:boom:

    It is nothing short of fabulous that Toyota now can cut production costs on the HSD. Perhaps it should be expected things will go that way. I expect the R&D costs were not small, so I don't know that the production cost savings will be directly translated to retail pricing, but it does give Toyota many more options in selling not only the Prius but any other car utilizing the HSD.

    Yes, I know many other people talk about the "hybrid premium." It is evident in the costs of the Civic vs. Civic Hybrid and the Camry and Highlander vehicles, also. But the comparisons are never really apples to apples, because the hybrid isn't sold (on the Toyota side) in base models.

    As you were suggesting: Who knows when the HSD drivetrain will be less expensive than the ICE-only of equivalent horsepower?
  12. usbseawolf2000

    usbseawolf2000 HSD PhD

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    Most of the advancements were made from Camry hybrid to Lexus 600h. For example, the engineering cost for SRU and reduced Inverter size were done prior to the 2010 Prius.
  13. usbseawolf2000

    usbseawolf2000 HSD PhD

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    When someone mentions "hybrid premium", most people think of the extra price instead of the premium features and benefits that only hybrid can bring. We need to push into the direction where people start to associate "hybrid premium" with the cool, environmental, and luxury features.
  14. Codyroo

    Codyroo Senior Member

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    Getting a car that comes standard with a 4 cyl engine and upgrading to a 6 cyl engine costs more money, yet no one ever asks what the "horsepower premium" is, much less what the payback time is for having the larger engine (ditto that leather seats, upgraded sound system, extra air bags, HID lights, etc etc etc).

    It is a trimline. Period.
  15. usbseawolf2000

    usbseawolf2000 HSD PhD

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    Yea, those premiums are easy to understand. It is easy to associate more cost with hybrid as well.

    We need to "educate" people of other hybrid-only premium features that only an owner would know! The keyword to understand hybrid premium feature is "ownership experience" I started using it about 6 months ago and I now hear German and American car ads using this phrase.

    Most of the magazine and online car reviews don't cover them. They only cover driving experience and price.
  16. hampdenwireless

    hampdenwireless Active Member

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    We know Toyota is saving money on the motors, they are smaller and use less copper. The control electronics are also cheaper as the parts required for controlling large amounts of power have become both more efficient and lower cost.

    They also dropped a belt, bladder, thermos and other parts out of the new design. The only thing that I can think of that is going to cost Toyota more is the exhaust heat recycler.

    Toyota could sell this car at the same price as the outgoing model, before the recession I thought it would be more. With the current combination of low gas prices, recession and the Honda Insight I think Toyota will keep the price the same as before with a small chance of a price CUT.
  17. sl7vk

    sl7vk Member

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    It's hard to take into account all the factors in pricing. For sure, raw materials costs have sunk like a lead balloon. But the yen has struggled versus the dollar as well.....

    I think at the end of the day, currencies are less stable than commodity costs, and as such, the new Prius will come in cheaper than the last....
  18. Dondoh

    Dondoh Aleatory Specialist

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    "Still, there has been speculation in the Japanese media that Toyota would not only set the new Prius price lower than initially expected at about 2 million yen but that it will also continue to sell the current Prius, matching Insight’s price."

    Hmmmm.
  19. Roy2001

    Roy2001 Junior Member

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    Question: 30% cost reduction is for power train or for electronic motor ONLY?
  20. usbseawolf2000

    usbseawolf2000 HSD PhD

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    30% cost reduction to the entire hybrid system. So that includes electric motors, larger gas engine, smaller power control unit (inverter), exhaust system (heat recovery system replacing the thermo bottle). EGR is new and it was added.

    The battery pack and cooling system as well. The battery pack remains basically the same but they reduced the size of the cooling part.
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