There was a time when the Toyota Prius was one of the hottest cars in the market. Hollywood’s biggest stars all had one. Al Gore bought one. If you wanted to announce your commitment to saving the environment, you had to have one. California even handed out stickers giving Prius owners permission to use commuter lanes even if they only had one person aboard. Sales in the Golden State exploded. Toyota began incorporating the hybrid powertrain in the Prius into other models. Even Lexus got a few models with an “h for hybrid” in their names.


The Toyota Prius, In Better Days

Toyota Prius

Things were going so well, Toyota considered making the Prius not just a single car, but a range of vehicles designed to appeal to various audiences. First came the Prius C, a smaller version of the traditional liftback designed for young urbanites who needed a trim, agile car that could zip through traffic and fit into parking spaces that other cars couldn’t.

Next, it introduced the Prius V, a slightly larger car with almost as much room inside as a small crossover SUV. Lastly, Toyota introduced a plug-in version of the liftback that started it all. There was a time when the company thought the Prius might expand even further and account for a large portion of its US sales.

Then, gas prices took a tumble.

With low prices at the pump, Prius’ consumer sales sank 16% last year- and show no sign of recovering any time soon!

Of course, Toyota just released its all new, fourth generation Prius liftback last fall, so there may be some holdouts waiting for the new model. With that new Prius, too, there is a feeling that it might be time to update the Prius C and Prius V, but a report in Automotive News suggests the company is taking a hard look at whether it wants to continue those models at all.

As good as the wagon-y Toyota Prius V may be, it has not sold as well as expected. Only 143,212 of them have been sold since it was introduced in 2011. The plug-in hybrid has been a huge disappointment, selling only 42,293 copies in 4 years. It has since been discontinued and may or may not reappear later this year.

Prius has been very, very good for Toyota’s image. It sells almost as many large SUV’s, minivans, and pickup trucks as any other manufacturer, but it is viewed by consumers as the most fuel efficient brand in America, thanks to the Prius. “Prius has universal awareness that’s just not common in the automotive world,” said Karl Brauer, senior director of insights for Kelley Blue Book. “There’s just no denying it’s achieved that fairly unique status where everybody knows it.”

“Toyota has always demonstrated a very, very long-term attitude towards their powertrain planning,” says Ed Kim, vice president of industry analysis at AutoPacific. “They’re not doing plans based on what fuel prices will be next year.” That may be so, but declining sales are forcing Toyota executives to rethink the Prius brand today.

“Given all the changes in consumers’ preferences right now, I don’t think we’re forecasting the Prius to be our top volume seller anymore,” says Bill Fay, Toyota Division general manager. He says Toyota plans to “reinvest” in the C and V, but acknowledged it is too early to say whether the cars will continue when it is time for second generation versions to appear in a about two years.

The biggest factor for the Prius V may be how well the newly introduced Toyota RAV4 Hybrid does in the marketplace. More than just a raised Prius, the RAV4 is a true crossover SUV with all wheel drive and lists for just $700 more than the base model. If its sales numbers are strong, Toyota may find it hard to justify keeping the Prius V around.

The Prius C may fare better, even though it has sold only a few more copies than the V. That’s because it appeals strongly to younger customers, a demographic every manufacturer is desperate to connect with. The C may survive as a bridge between young customers and more traditional Toyota models as those customers get older.

Things change. The Prius has gone from hero to ho hum. Rather than having more models, the Prius family may get smaller. It all depends on oil prices. Nobody predicted two years ago the sudden collapse of the oil industry. Nobody is predicting a rebound any time soon, either. But if the market for fuel efficient cars increases suddenly, Toyota will be ready to rev up Prius production once again.