Prius – Planning and development

• Consumers will be willing to pay a premium due to better

fuel economy (100% increase over a convention car)
• Difficult to estimate demand as it was an entirely new
category.
• Risk with reliability and new technology- can affect
Toyota’s reputation.
• Variable costs very large - $3000-4000 more over
conventional vehicles.
• Initial variable costs estimated to be higher but will fall
with increase in scale and learning.
 Technological Challenge
• Existing batteries could produce 400-500 wpk
(Watts per KG) while 600-700 wpk was required.
• Overheating of batteries affected performance
and posed safety problems.
• Manufacturing and cost challenges with the
batteries.
• Development of Regenerative Braking System
posed many technological challenges.
 Market Uncertainities
• Little information about competitor’s hybrid
efforts.
• Whether consumers value the Prius
contribution to reduced pollution remained
uncertain.
• Acceptance by consumers highly depend over
reliability.
• Mass production reliability remained an issue.