Toyota Forced to Slow Prius Production as Battery Supplier Can't Keep Up With Demand

[Steve]

The 2010 Prius has been a popular car for Toyota since it first went on sale several months ago, but the pace of sales will slow considerably over the next few months. The reason for the lull is that the Prius's battery supplier, Panasonic EV, can't keep up with the demand.

The third-generation of Toyota's revolutionary hybrid has been even more popular than the Japanese automaker expected, especially in its home market where the Prius out-sold all other cars in the county in the month of May. Toyota currently has the capacity to build 500,000 Prius models a year, but Panasonic can't keep up with that pace. No doubt the electronics company never thought it would have to as sales of the new Prius have exceeded forecasts.

"The new Prius model has been excessively popular, inconveniencing some of our customers, and the factories are working overtime at full capacity," said Takahiko Ijichi, Toyota senior managing director to told Automotive News. "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."

Panasonic's supply issues come at an unfortunate time for Toyota as the automaker continues to suffer through the recession. The Prius is one of the few good news stories at Toyota with better than expected sales helping to prop up Toyota's diminished sales with other models.

Demand outstripping supply might be viewed as good problem to have, but in the mean time Toyota has been forced to slow down production until additional battery supply becomes available, something which will no doubt mean long waiting lists for those looking to buy a Prius. The shortage could also hurt Toyota in the long run as some customers will look to oher hybrids (like the Honda Insight) which have no such supply issues.

With hybrid popularity seemingly on the rise, Toyota is currently re-thinking its production of the car and hopes to double it's output capacity to one million units next year.

More: Report: Toyota Forced to Slow Prius Production as Battery Supplier Can't Keep Up With Demand on AutoGuide.com