May 10, 2007: Source – International Herlad Tribune

Toyota Prius

When Toyota and Honda introduced hybrids in 2000, most other carmakers scoffed at gas-electric vehicles as a money-losing proposition for the two Japanese companies. With Toyota poised to break the one-million mark for cumulative global sales of hybrids this month, the company’s hybrids are not only growing in popularity—they are becoming profitable.

International Herald Tribune is reporting that Toyota will dramatically improve the cost structure after it reaches the sales goal of one million hybrids annually in 2010 or soon after.

"By then, we expect [profit] margins to be equal to gasoline cars,” said Masatami Takimoto, Toyota executive vice president in charge of powertrain development. The company continues to aggressively cut the cost of hybrid components, such as motors, batteries, and inverters. And then there are economies of scale. Takimoto expects hybrids to account for 100 percent of Toyota’s vehicles by 2020.

Toyota will soon become the biggest automaker in the world. The product plans (and fate) of car companies are based on fundamental assumptions about fuel prices. Takimoto said that he expected energy prices to continue rising past their current high of $3.00 per gallon in the United States. Prius production will rise by 40 percent to 280,000 units this year, with total hybrid sales expected to reach 430,000 units.


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