The Delayed Promise of Prius Production in the U.S.
Throughout 2008, Toyota said that it would start building the Prius at a brand-new plant in Blue Springs, Mississippi by the end of 2010. But by December 2008, the economic recession caught up with Toyota, which mothballed the factory. The facility is now coming back to life—to build Corollas not Priuses.
The history of the Mississippi plant, and Toyota’s shifting production plans, speaks volumes about the recent ups and downs of the auto industry, gas prices, and electric-drive cars.
When it was first announced in 2007, the Blue Springs plant was originally slated to build the Toyota Highlander SUV. As gas prices, and Toyota Prius sales, skyrocketed in late 2007 and early 2008, Toyota said that SUVs were out—and hybrids were in. With $4 gas, Toyota couldn’t keep the Prius on its lots and some dealerships were charging big premiums. So the time was apparently right to bring Prius production to the United States, as Toyota had been planning for some time.
Fast forward to 2010: consumers are pinching pennies and gas prices are well below $3 a gallon. So far this year, Prius sales are down by 31 percent compared with the first five months of 2008. As long as this pattern continues, Toyota is likely to postpone Prius production in America. But that could change.
“As soon as global supply falls short of demand, I’m sure we’ll take a look at what we can do here in the U.S.,” said Jim Lentz, president of Toyota Motor Sales U.S.A., on a media conference call last week. Mr. Lentz said the important thing for Toyota right now is to bring back North American production of the low-cost Toyota Corolla.
Toyota stopped building the Corolla in the U.S. in April, when the company closed the NUMMI plant in Fremont, Calif.— which it had shared with General Motors until bankruptcy led G.M. to shut down its operations there.
The story comes full circle with last month’s announcement that Toyota will invest $50 million in Tesla Motors—thus helping the electric carmaker take over a section of the NUMMI plant to build its upcoming Model S electric sedan. It’s too early to tell if Toyota and Tesla will co-produce an electric car together—or when the economic conditions and gas prices will swing back in favor of hybrids. But when that day comes, Toyota will already have some kind of presence at NUMMI—which could be the ideal place to roll out Priuses—with and without plugs—directly into hybrid- and EV-friendly Northern California.