Toyota unveils sporty new 2023 Prius, bets on hybrid technology to fill EV gap

key points

  • Hybrid vehicles are growing in popularity every year, with more than 454,000 hit the road last year.
  • One of the first hybrid cars, the Prius is also one of the most popular.
  • Prius sales have declined in recent years, so Toyota is hoping its latest model will reverse that trend.

Toyota has unveiled the 2023 Prius, the latest in its 23-year-old lineup of sedans. The first Prius on display in 1997 was one of the first electric cars in the world, and Toyota continued the trend, increasing the power and efficiency of its hybrids since then.

The company claims its latest model is the most efficient hybrid yet. Investors may be wondering how further developments in hybrid vehicles will affect Toyota stock and its bottom line.

The Rise of Electric Vehicles

While electric and hybrid vehicles appear to be relatively recent developments in response to concerns about climate change and growing dependence on foreign oil, they have a much longer history than many expected.

The first electric cars were produced in the 1800s, mostly as experiments by tinkerers and inventors. By 1900, there were approximately 30,000 electric vehicles in the world. They found use as taxis in the US and UK, and even set land speed records.

The internal combustion engine developed faster, and electric vehicles were eliminated. In the 1960s, the United States passed legislation to encourage the production of electric vehicles. With the oil embargo in 1973, automakers began developing hybrid engines that could use both electricity and gasoline to improve fuel efficiency without sacrificing the advantages of gasoline, including range and power.

Honda released the first mass-produced hybrid in the United States in 1999. Toyota followed suit, releasing the Prius globally in 2000. All-electric vehicles are also gaining popularity, with new models capable of traveling hundreds of miles on a single charge and fast-charging stations giving them greater range.

Can hybrids bridge the gap?

Many automakers expect their vehicle lines to be almost entirely electrified by 2030. In fact, some states have even passed laws banning the sale of gasoline cars by the 2030s. Advances in battery technology and further investment in infrastructure will allow EVs to travel farther and find charging spots easier. Additionally, modern EVs tend to cost less to own than gas vehicles when maintenance and fuel costs are factored in.

At the same time, many people are turning to hybrids to reap some of the benefits of electric vehicles without losing the range of gas-powered cars. Many automakers hope their hybrids will bridge the gap between gasoline-powered cars of the past and all-electric vehicles.

Sales of gasoline vehicles are still far higher than those of hybrids or electric vehicles, with approximately 12 million neo-conventional vehicles sold in 2020. It seems that many people are reluctant to give up the power and range that a gas-powered car can provide, or pay the higher cost for a hybrid or electric vehicle.

However, trends show positive signs for green vehicles. Sales of hybrid vehicles have increased over the past few years, from 9,400 in 2000 to 454,900 in 2021. However, EVs are starting to catch up to hybrids. Americans bought 240,100 all-electric electric vehicles in 2020, up from just 104,500 in 2017 and zero before 2010.

Hybrid cars may be just what the market needs. They offer a way for people to improve fuel efficiency without dealing with all the downsides of all-electric vehicles.

Toyota’s new Prius

With its new Prius unveiled at the opening event of the 2022 Los Angeles Auto Show, Toyota is banking on continued growth in the popularity of hybrid vehicles.

The Prius has become synonymous with hybrid vehicles, and Toyota designed the car with that in mind, the company understands. Dave Crist, vice president and general manager, noted, “The Prius name carries weight—it carries the identity of an entire vehicle powertrain category. We believe the all-new 2023 Prius and Prius Prime will continue this important tradition.” “

The new Prius aims for sportiness, comfort and functionality. At the same time, it was built with fuel economy and power in mind. With 194 horsepower, it can go from 0 to 60 in 7.0 seconds while maintaining fuel efficiency of 57 MPG.

The car comes in three grades, with the Luxury model including features such as wireless phone charging, alloy wheels, park assist with automatic braking and heated seats.

The car also includes Toyota’s latest Safety Sense features, including lane departure alert, pre-collision system, automatic high beams and Active Driving Assist.

what investors need to know

While final pricing and an on-sale date have yet to be announced, investors are wondering how the latest model will affect Toyota’s bottom line.

Prius is one of the biggest names in hybrid vehicles. Toyota alone has sold more than 5 million hybrid vehicles in North America and 20 million worldwide, so the company knows the market well and has helped create demand.

While EV sales in the U.S. are growing, hybrids are still more popular and sales of hybrids are growing fast.

Historically, interest in hybrid and electric vehicles has been closely correlated with gasoline prices. Given the recent high prices, interest in these vehicles is at an all-time high. However, if inflation starts to moderate and gasoline prices fall, fewer people will be willing to buy expensive hybrid cars.

If EVs become more popular and more automakers switch to EVs, hybrids could fade away. If gasoline continues to drop, fewer people will be interested in fuel-efficient cars. If you think gas prices are going to rise and stay high, investing in a hybrid vehicle could be a good bet.

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

the bottom line

Hybrid and electric vehicles have grown in popularity in recent years, but their market share is still relatively small compared to gasoline-powered vehicles. Still, many automakers expect to go all-electric by the end of the decade.

With the Prius, Toyota has one of the oldest brands in the hybrid market. It hopes the Prius will bridge the gap between gasoline-powered cars and the soon-to-be-standard electric cars. Investors will need to consider whether the latest Prius can help Toyota overcome growing competition and thus reverse its declining sales.

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