Unfortunate XMAS Present from Toyota: Refusal to cover warrantied propulsion battery

...think we need to hear bottom line how much $labor + $battery cost is being offered, but it sounds like they are not giving in much.

 

They are more or less treating you like you are off warranty.
Can you try the Mellors? They may give you various lower cost options.

 

Does the car have full Toyota dealer service history?

If so, then here in the UK Toyota will usually offer a good will replacement on major parts in cases such as yours. Infact, last January my inverter failed 10,000 miles outside warranty and the part was replaced for free - with me picking up the labour rates for installation. A situation I was happy with considering how far out of warranty I was.

However, if a car doesn't have full Toyota service then they do draw the line on the warranty date and mileage. One would still expect them to show some good will considering your failure was over the Christmas period when most dealers would have been closed.

There definitely seems a difference between warranty payments in the UK and the US. Here, Toyota bend over backwards to help - one of the reasons we're now a two Toyota household (despite the reliability issues my Prius has suffered!).