Toyota to build hybrid batteries in North America

Even with the $5,000 difference between the Prius and non-hybrid Toyotas, there was a time when Toyota lost money on the car. Even when the car entered the black, and even though they halved the cost of the hybrid system from one generation to the next, Toyota still didn't make the margins on it that they did with their go-to sedans. Yet with plans to start making batteries for the Hybrid Synergy Drive in the U.S., Toyota says it should be able to halve costs again, and bring the next-gen Prius profit to near parity with the Corolla.

Toyota doesn't know where or when it will start building batteries in the States. The company says "it's difficult to make the main parts of batteries outside of Japan," but didn't explain why that was the case. From 2010, the Prius will be manufactured in Toyota's Mississippi plant, however, that doesn't mean the battery plant will be nearby.

Toyota moved up the date to offer the plug-in Priuses to government and fleet operators to the end of 2009. Right now, Toyota says the Prius gets 13 miles on battery power alone. If the plug-in Prius does arrive in a year or so, and with a substantially higher range -- and that is a ginormous "if" -- then it has a chance of upstaging the Chevy Volt, which appears to be what Toyota is aiming for.