The Toyota Prius and hybrid car cost

In 2004, Toyota sold about 135,000 hybrid cars worldwide, including 126,000 Prius models. Yesterday, Toyota announced that it would like to produce 1,000,000 hybrids in the very near future.

Some analysts think this number is obscenely high, unless Toyota can reduce costs. So, is Toyota doing anything to reduce costs?

Toyota claims that one problem with cost is limited production facilities. Prius production, for example, occurs only in Japan. According to the Japan Times, Toyota Prius production currently stands at 180,000 vehicles per year. Thus, Toyota will begin producing the Prius in China later this year, as well as in the United States soon.

Additionally, Toyota believes that spreading its hybrid technology into as many models as possible, while also licensing it to other auto manufacturers, will also drive down costs. For example, Toyota has already signed deals with Ford and Nissan, and is currently working deals with Porsche AG and Fuji Heavy Industries Ltd.

Hence, every time a Ford Escape hybrid, or Nissan Altima hybrid is sold, Toyota hybrids become a bit more cost-effective.

Moreover, some analysts believe that hybrid cars are not really tapping the potential of hybrids, arguing the hybrid SUVs and trucks offer the most to American consumers.

The pre-sales of the Lexus RX400h as well as the buzz around the Highlander hybrid definitely seem to support this belief. And if gas prices stay high, interest in hybrid vehicles will only increase.

Join the Hybrid Buyer's Club.