Toyota to Unveil New Prius in Hopes of Reversing Slump

Paul Eisenstein

What goes up must come down, something even the world's most popular hybrid-electric vehicle has experienced in recent months. So, Toyota officials have reason to be excited as they prepare to reveal an all-new version of the Prius next month.

Like virtually all battery-based vehicles, sales of the Prius have been hit by low gas prices in recent months. Still, it remains the world's most popular hybrid—and one of the best sellers among all vehicles in the big California market.

The Toyota Prius hasn't had a major update in seven years, and early reports suggest the new one will grow longer, get a little more power, have better fuel economy and possible stretch its range in all-electric mode. Some reports indicate an optional lithium-ion battery may also become available on the 2016 Prius.

Toyota Motor Corp dealership in Richmond, California.
David Paul Morris | Bloomberg | Getty Images

Toyota has sent out invitations for journalists to attend a preview of the fourth-generation in Las Vegas on Sept. 8.

The Prius was the world's first mass market hybrid when it debuted in Japan on December 10, 1997. The current model has been around since 2009, an unusually long stretch for Toyota.

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It took three years for the compact vehicle to make it to the U.S. market, where it landed in showrooms shortly after the arrival of the original Honda Insight. Less radical than the competing two-seater, the Prius immediately found a much wider audience that it has maintained and built on around the world.

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At times, the Prius has become the best-selling vehicle of all types in both Japan and in the green-minded California market. And industry sales data show it snapped up 82 percent of the U.S. hybrid segment's sales during the first seven months of 2015. But demand has taken a rare dip, nonetheless, Prius sales falling 15 percent during that period, year-over-year.

Sales numbers for the Prius actually include a mix of vehicles in the so-called Prius "family," including a plug-in hybrid, the bigger Prius V and the subcompact Prius C.

As with the rest of the green car market, the Prius has been hit by cheap gasoline in recent months, as consumers shifted to larger, less fuel-efficient vehicles, especially SUVs, crossovers and pickups.

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Toyota is hoping that the new model will give the Prius nameplate a recharge, among other things by boosting fuel efficiency by as much as 10 percent, to a reported 55 miles per gallon.

The 2016 hybrid will get an updated version of the familiar Toyota Hybrid Synergy Drive system, and insiders say that is likely to include a larger, 1.8-liter gasoline engine that will bump power up from 134 to 150 horsepower. The new model will continue to link that engine and two electric motors through a CVT gearbox.

The new Prius also is expected to be slightly larger, in keeping with broader industry trends. And it will pick up on the mandate of CEO Akio Toyoda, who has called on his designers to put more "passion" in Toyota designs. New LED headlights and tail lamps are likely. To maximize range, Toyota is expected to reveal it has adopted new lightweight manufacturing techniques, including the use of more advanced steel alloys, aluminum, perhaps even some composite materials.

Meanwhile, the Prius is expected to get a more refined interior, a move meant to address one of the most frequent criticisms of the hybrid. There will almost certainly be more high-tech features, including an improved infotainment system and possibly a wireless cellphone charger.

There have been some reports suggesting Toyota may offer an optional lithium-ion battery pack as an upgrade in an effort to improve fuel economy and all-electric range. Toyota has been doggedly sticking with older nickel-metal hydride batteries, which it considers safer and more reliable, and it remains unclear if those reports are accurate.

Until now, lithium batteries have only been offered in the slow-selling Prius Plug-in Hybrid, recently pulled from U.S. showrooms. Whether that model will return with changes may be revealed in Las Vegas next month.