Toyota: Cost of Making Hybrids Will Fall

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Washington DC May 16, 2007; The AIADA newsletter reported that Toyota expects to cut costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, said MSNBC.

To date, the Japanese automaker has seen sales of its Prius, the world's first hybrid car, come at the expense of profitability given their high production costs. But Masatami Takimoto, executive vice president in charge of power train development, said cost-cutting efforts on the system's motor, battery, and inverter were improving the cost structure drastically. "By then, we expect margins to be equal to gasoline cars," he told Reuters in an interview at Toyota's headquarters in Toyota City, central Japan.

If it succeeds, Toyota, on its way to becoming the world's biggest carmaker, will be removing the main hurdle to cost-competitiveness for the hybrid — the expense of the power train. Toyota is also trying to improve fuel economy by reducing the weight of vehicles through increased use of high-tensile steel and resin products, Takimoto said.