Toyota officials say that efforts to expand Prius production to meet booming demand are being hampered by the inability of the battery supplier to quickly increase production. Yesterday at the company's quarterly earnings announcement Takahiko Ijichi, Toyota senior managing director, said "Unfortunately, the batteries are not catching up with demand. Production of the batteries needs to be increased in order for our production to go up."
Right now, according to Ijichi, Panasonic EV Energy Co. which makes the nickel-metal hydride batteries for the current generation Prius can't produce more than it's current number of 500,000 batteries per year. This matches Toyota's current production of the model, but with long waits at U.S. dealerships for most customers, is not enough to fully meet demand.
Last summer Toyota said it would begin to build the Prius at its Tupelo, Miss., factory in late 2010, but that plan is currently on indefinite hold. Ijichi says Toyota won't invest to expand Prius production until it is assured of an adequate battery supply. The supplier, Panasonic EV Energy, currently plans to increase production in gradual stages to around one million batteries annually by the summer of 2010.
Of the mass-market automakers currently producing (or about to produce) large volumes of Plug-in hybrids and/or Electric Vehicles, Nissan seems to be the only one committing large resources to directly controlling production of its own battery. In light of Toyota's current experience, this may turn out to be a strategic choice with a lot to recommend it.