Toyota Unveils The Sporty New 2023 Prius, Betting On Hybrid Technology To Fill The EV Gap

Key Takeaways

• Hybrid vehicles are growing more popular every year, with more than 454,000 hitting the roads last year.
• Prius was one of the first hybrid vehicles, and one of the most popular.
• Recent years have seen Prius sales decrease, so Toyota hopes that its latest model can reverse that trend.

Toyota unveiled the 2023 Prius, the latest in its 23-year-old line of sedans. The first Prius, showcased in 1997, was one of the world’s first electric vehicles and Toyota has continued the trend, increasing the power and efficiency of its hybrids since then.

The company claims that its latest model is its most efficient hybrid yet. Investors may wonder how further advances in hybrid vehicles could impact Toyota stock and its bottom line.

The rise of electric vehicles

While electric cars and hybrids seem like a relatively new development in response to rising concerns about climate change and reliance on foreign oil, they have a much longer history than many expect.

The first electric vehicles were produced in the 1800s, largely as experiments by tinkerers and inventors. By 1900, there were about 30,000 electric vehicles in the world. They found use as taxis in the U.S. and U.K. and even set land speed records.

Internal combustion engines advanced faster, and electric vehicles fell by the wayside. In the 1960s, the U.S. passed legislation that encouraged the production of electric cars. With the oil embargo in 1973, car makers began developing hybrid engines that could use both electricity and gasoline to increase fuel efficiency without sacrificing the benefits of gas, including range and power.

Honda released the first mass-production hybrid in the US in 1999. Toyota was not far behind, releasing the Prius worldwide in 2000. Full-electric cars have also gained in popularity, with newer EVs having ranges of hundreds of miles on a single charge and fast-charging stations allowing them to have greater effective ranges.

Can hybrids bridge the gap?

Many car manufacturers expect their vehicle lines to be almost fully electric by 2030. In fact, some states have even passed laws to ban gas car sales in the 2030s. Advances in battery technology and further infrastructure investment will allow EVs to travel further and to more easily find a place to recharge. Additionally, modern EVs tend to have a lower cost of ownership compared to gas vehicles when accounting for maintenance and fuel costs.

In the meantime, many are turning to hybrids to capture some of the benefits of electric vehicles without losing the range of a gasoline-powered car. Many car manufacturers are hoping that their hybrid vehicles can bridge the gap between the gas-powered cars of yesteryear and full-electric vehicles.

Gas car sales are still far higher than hybrids or EVs, with roughly 12 million new conventional vehicles sold in 2020. It seems that many are unwilling to give up the power and range offered by gas or to pay the higher cost of hybrid or electric vehicles.

However, trends are showing positive signs for green vehicles. Hybrid sales have increased in past years, from 9,400 in 2000 to 454,900 in 2021. However, electric vehicles are already starting to catch up with hybrids. Americans purchased 240,100 full electric EVs in 2020 compared to just 104,500 in 2017 and none prior to 2010.

Hybrid cars might be just what the market wants. They give people a way to improve fuel efficiency without dealing with all of the drawbacks of full-electric cars.

Toyota’s new Prius

Toyota is banking on the continued growth in hybrid vehicle popularity with its new Prius, which it unveiled at a 2022 Los Angeles Car Show kickoff event.

The company understands that Prius has become synonymous with hybrid vehicles, and Toyota designed the car with that in mind. Vice president and general manager Dave Christ noted, “The weight of the Prius name is heavy – it carries with it the identity of an entire category of vehicle powertrain. We’re confident the all-new 2023 Prius and Prius Prime will continue this important legacy.”

The new Prius aims to be sporty, yet comfortable and functional. At the same time, it’s built with fuel economy and power in mind. With 194 horsepower, it can go from 0 to 60 in 7.0 seconds while maintaining a fuel efficiency of 57 MPG.

The car comes in three grades, luxury models include features like wireless phone charging, alloy wheels, parking assist with automatic braking, and heated seats.

The car also includes the latest in Toyota’s Safety Sense features, including lane departure alerts, a pre-collision system, automatic high beams, and proactive driving assist.

What investors need to know

While final pricing and on-sale dates have not been released yet, investors will want to know how this latest vehicle will impact Toyota’s bottom line.

Prius is one of the largest brand names in hybrid vehicles. Toyota alone has sold more than 5 million hybrid vehicles in North America and 20 million across the globe, so the company understands the market quite well, and helped create the demand.

While electric car sales are growing in the United States, hybrid cars remain more popular and sales of hybrids have also been growing at a fast rate.

Historically, interest in hybrid and electric vehicles has been closely tied to gas prices. Given recent high prices, interest in these vehicles is at an all-time high. However, as inflation begins to ease and gas prices drop, fewer people may be willing to pull the trigger on an expensive hybrid car.

As EVs become more popular and more car manufacturers make the switch to EVs, hybrids will likely fade away. And if gas continues fall again, fewer people will be interested in fuel-efficient vehicles. If you believe that gas prices will rise and remain high, investing in hybrids could be a strong choice.

You also have to consider the wider hybrid market. Prius is a strong brand, but in recent years, competition from other manufacturers has led to falling sales for Prius. Sales peaked at 236,659 in 2012, but the company sold just 59,010 Priuses last year.

Bottom Line

Hybrids and electric vehicles have gained popularity in recent years but still hold a relatively small market share compared to gas-powered vehicles. Despite this, many car manufacturers are expecting to go fully electric by the end of the decade.

With the Prius, Toyota has one of the oldest brands in the hybrid market. It hopes that the Prius can bridge the gap between gas-powered cars and the soon-to-be standard electric vehicle. Investors will need to consider whether the latest Prius can reverse the trend of falling sales for Toyota by helping it overcome its strengthening competition.

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