The Rise And Fall Of The Toyota Prius

The Toyota Prius was the world’s
first mass produced hybrid car, and it still might be the
most famous of all time. But in recent years it has become
a victim of a changing market and perhaps its own success. The nameplate was once synonymous with
hybrids and a symbol of the automotive future. The Prius catapulted Toyota to the
lead of the hybrid market and showcased the innovative prowess of
a manufacturer are often reputed to be conservative, even
a bit boring. But now sales of the Prius
are falling after Prius took off, rivals took notice and
competition has grown. Gas prices have also fallen and
engines have become more efficient, making hybrids a tougher
sell for many customers. And with fully electric vehicles from
makers such as Tesla now capturing the attention of
buyers and automakers. The trailblazing Toyota Prius is no
longer the cutting edge of eco conscious driving. Hybrids are not going
away anytime soon. But the question for Toyota is does
the Prius brand still have a bright future and what
does that look like? It is important to understand how much
of a breakthrough the Prius was when it first came out. It was a totally new technology
that boasted unthinkably high gas mileage and it became more
popular as consumers increasingly worried about the price of fuel and
about the environmental impacts of gasoline emissions in the U.S.. Honda beat Toyota to market by a
few months with the insight, which also happened to beat the
Prius in fuel economy. That vehicle was a small two seat
car with only a manual transmission and air conditioning was optional. Even in the U.S., the Prius was the first hybrid
could truly compete with ordinary gasoline engine cars. Its EPA fuel efficiency rating at that
time was forty eight miles per gallon, far better than just about
anything else on the market. The second generation Prius was
particularly popular and introduced the futuristic styling that became
a signature of the line. Perhaps knowing that many of its
customers would be early adopters and well-heeled buyers looking for a
highly fuel efficient choice, Toyota also made the smart decision to
pack the Prius with technology and other features that were relatively
rare at the time. From the very beginning, the car was
something of a phenomenon in the automotive market. It was an affordable, accessible vehicle
that appealed to a wide audience, including customers who had the
money to spend on luxury vehicles or sports cars and might
not normally buy a Toyota. So when the Prius first came out
is really a very innovative product. It was not like anything. We’ve really seen a hybrid vehicle. It was a little scary for some
people, but it was really very popular because a really long waiting lists
for it really stood for really high fuel efficiency and whatnot. And it was it was
something to be seen in. The car was known for attracting
attention from Hollywood actors such as Leonardo DiCaprio
and Cameron Diaz. It was also a fixture in
popular culture, featured prominently on television shows such as Comedy
Central’s South Park and HBO show Curb Your Enthusiasm. A character on the Showtime TV
show Weeds,a drug dealer, bragged that the car’s quiet, electrified powertrain made
it good for sneaking up on people. It was almost a brand of its own. Not exactly a Toyota, just a Prius. But the Prius is time at
the top was bound to end. SALES peaked in 2012
and fell from there. And it isn’t that hybrid
sales have been falling. In 2000, the Prius had 59 percent
of the hybrid market in the United States. Its share peaked the
next year at 77 percent. But by the end of 2018, the
Prius family’s share had shrunk to 19 percent of the total. During that time, the total hybrid and
plug in share of the car market grew from zero point one percent
in 2000 to two point seven percent in 2018. There were a few factors that
contributed to the Prius is decline. Part of the trouble
was simply competition. For a time, Prius practically
owned the hybrid category. It was far ahead of competitors in
terms of technology and the company had a strong brand
in the Prius name. But over time, others caught up
and hybrid technology lost its novelty. Soon it became a feature
customers could opt for when picking out a vehicle. Now many automakers, including Toyota,
sell electrified versions of sedans, sport, utilities, crossovers
and even pickup trucks. There is also less incentive among
customers to buy any type of hybrid for a few reasons. First, internal combustion engines
have improved considerably. Automakers are squeezing more power
out of smaller, more efficient engines, often by using features
such as start stop technology, forced induction and others. Gas has also become a lot cheaper
as the Prius name has aged. And high fuel costs were one
of the major factors driving the technology behind the car. Fuel prices across the U.S. hit four dollars and ten cents
on July 16th, 2008, their highest recorded average for the
country in history. But in 2018, the price at the pump
fell as low as two dollars and 26 cents a gallon on average. Gas prices plummeted in late 2014,
and that era has really stuck around 2015 through 2018. Relative affordability. And that’s really put Americans interest
in hybrids kind of back. Certainly set them back. Americans have actually gone to
the opposite, less fuel efficient, bigger vehicles, because in the background
of all of this, cafe standards have slowly improved. Average new fuel efficiency
of even big truck. So we’ve come a long way. Toyota also no longer seems to be
positioning the vehicle as a sleek, tech, heavy car for early adopter. Current Prius is still comes stocked
with technology, but they no longer seem ahead of the
pack in what they offer. In some ways they even
seem a bit behind. This doesn’t mean the Prius is
a bad car, for example. Consumer Reports still
recommends it. Yeah, we liked it from the beginning
and we still like the Prius. I mean, the Prius is kind of
like the eat your vegetables car right now. I mean, it’s a car
that really does everything very well. It’s reliable. It’s got safety features,
the top safety features. It’s it’s got a lot of value
and it’s got great fuel efficiency. So it’s a really smart car to get. But no, it’s not as sexy
as some of the competitors. It just no longer looks like
the most revolutionary vehicle and fuel efficient driving. Perhaps that honor now goes to
Tesla, which has upset the automotive world with its boldly design pure
electric sedans, an SUV that emphasized luxury and performance. And for people who really want to
stand out and they want to have something that’s innovative and showing
that it’s about the future, they’re going to do things
like the Tesla Model 3. I mean, in cars, southern California,
that’s really the hot car. That’s the car that’s really about
the future, not the Prius anymore. The Prius was exceptional among cars in
that it was a more affordable vehicle that could still lure buyers
who might otherwise opt for a luxury sedan or high
end sports car. But now many of those early
adopters and well-heeled eco conscious drivers are flocking to Tesla’s,
say many industry observers. Furthermore, Tesla’s success has now
spurred rival automakers to play catch up with it in the
way they once did with Toyota. Now, practically every major automaker
is racing to launch pure electric vehicles of all types
and at all price points. In fact, industry observers have said
Toyota is actually a bit behind in the development of
pure electric vehicles. Toyota is determined to keep hybrid
vehicles relevant, even if it means releasing its own
intellectual property to potential challengers. In April of 2019, the automaker
said it will allow competitors royalty free access to its 24000 patents
on a hybrid vehicle technology through 2030. In a bid to encourage the wider
adoption of hybridization, I think in some ways Prius has been a
victim of its own success, right? It started that revolution that has rolled
out so that there are there are many other choices now when
it comes to alternative fuel vehicles. And it’s fascinating because
the first three generations of Prius, it was really an idea that
people bought into and wanted to associate with that by
the fourth generation. Hybrids were so more normalized in
the market that Prius became more just another vehicle. In the meantime, it continues to
release new versions of the Prius. In May of 2019, the company
unveiled the 2020 Prius prime, which starts at twenty seven
thousand six hundred dollars. It comes with some of those
key standard features missing in its predecessor, such as Apple Car Play,
Sirius XM and Amazon Alexa Compatibility. While the industry seems
to be moving toward electrics. Opinions vary as to how
long that transition will take and how smooth it will be. So hybrids are likely
not going anywhere soon. But while the Prius name may
have once been synonymous with them, could end up being
just another car.