Toyota confirmed Wednesday that “unforeseen battery supply constraints” may keep its RAV4 Prime plug-in hybrid in short supply through at least the end of this year. 

The automaker had stated last month that it would be targeting 20,000 RAV4 Prime sales per year in the U.S., with an initial 5,000 deliveries anticipated through the end of 2020. 

That was before our first drive of the 2021 Toyota RAV4 Prime, when we found this perky plug-in model to be everything families need to go gasoline-free most of the time.

With its confirmation of the supply pinch, Toyota said that the issue affects initially planned production volume and it aims to increase availability of the model in the near future. Yet Toyota didn't provide any information on planned production levels for 2021 at this time. 

Despite the production hitch, the RAV4 Prime will be made available nationally, not just in California ZEV states, and it will still start arriving throughout the U.S. this month but will be “limited in availability.”

“Our plan is to allocate RAV4 Prime to all states as efficiently and strategically as possible, while also meeting our regulatory ZEV requirements by prioritizing specific regions with a higher demand for plug-in vehicles,” Toyota said in a response provided to Green Car Reports. 

2021 Toyota RAV4 Prime first drive. - July 2020

2021 Toyota RAV4 Prime first drive. - July 2020

Meanwhile, as the first few RAV4 Primes are reaching dealerships, our partner site CarsDirect earlier in the week reported that some dealers are allegedly marking up prices by a few thousand dollars—up to, in at least one case, more than $10,000 above MSRP. 

“Because our dealers are independent business owners, the final transaction price will be the result of interactions between the customer and the dealer," Toyota said in response to questions about price gouging. "Our sales groups and regional offices will be aware of transaction prices and will consult with our dealers as needed.”

The RAV4 Prime starts at $39,220, including the $1,120 destination fee, and if you can claim the $7,500 EV tax credit plus a state incentive such as the additional $1,000 rebate you can get in California, the RAV4 Prime might effectively cost less than a comparably equipped RAV4 Hybrid. 

2021 Toyota RAV4 Prime first drive. - July 2020

2021 Toyota RAV4 Prime first drive. - July 2020

Lithium-ion cells for the Prime’s 18.1-kwh liquid-cooled pack are coming from a newly formed joint venture between Panasonic and Toyota, called Prime Planet Energy & Solutions, Inc. The Prime went on sale in June in Japan and it’s due for deliveries in Europe later in the year. It’s not clear how the supply issue affects that rollout. 

The Prime delivers something the market has long been asking for and none of its rivals quite deliver. It starts with the top-selling crossover SUV in the U.S., matches it with 42 all-electric, all-wheel-drive EV mode miles for the commute and a 38-mpg rating for Hybrid mode road trips—with quicker acceleration than anything in the Toyota lineup except the Supra sports car. And it carries forward Toyota’s unmatched reputation for hybrids, keeping it relevant at this time when plugging in is slowly but surely catching on. 

If Toyota can produce the Prime at a pace that meets demand, it has the potential to connect Toyota's hybrid strengths to the electric future, at scale. Without it, there's potentially much to lose.