Plenty of technical wizardry went into developing the Prius, the popular gas-electric hybrid Toyota Motor Corp. (TM ) first shipped to Japanese showrooms in 1997. But the production tactics were also striking. Toyota engineers kept the assembly simple so the cars could be made on the same production lines as mainstream models such as the carmaker's popular Camry.
Toyota got the Prius to market quickly because it didn't need to build new assembly lines. And with minimal capital sunk into manufacturing, the company was hedged in case the hybrids flopped. "We wondered if anybody would want one," admits Takehisa Yaegashi, 62, a senior engineer known throughout Toyota as the father of the hybrid. Last year hybrid sales in the U.S. alone hit 83,153, with Toyota's Prius accounting for 64% of the total. And despite a hefty price premium over standard cars, Toyota expects sales to grow even faster this year with the addition of two new hybrid sport-utility vehicles.
Gas-electric hybrids have been around since the turn of the 20th century. Porsche (PSEPF ) founder Ferdinand Porsche was among the visionaries who tinkered with the technology. But few looked for ways to mass-produce them. In the 1980s environmentalists focused on 100% electric vehicles (EVS) because they promised zero tailpipe emissions and ultra-low fuel costs.
Yet by the early 1990s, hopes for a mass market in EVs were short-circuited by limited battery life. Seeing no major breakthroughs on the horizon, Toyota's engineers settled for a partial solution: integrating an electric motor with a conventional power train. The idea was a car that would start up on battery power and turn on the gasoline engine when needed -- for acceleration, say, or to recharge the batteries. "We had hit a wall with electric vehicles," says Yaegashi, who joined Toyota after graduating from Hokkaido University in 1967 and earned his spurs developing cleaner-burning gas engines in the 1970s. "Hybrids began where EVs ended."
The biggest challenge Yaegashi faced was coming up with a reliable way to handle the powerful voltage between the battery and the electric motor. The solution was a Japanese classic: Toyota modeled the semiconductor in the core inverter unit on the heavy-duty transistors used by Japan's bullet trains. Another big issue was how to fit the gas engine, the electric motor, and a jumbo battery into a compact car frame. Computer modeling yielded the basic scheme for shrinking the parts, but glitches plagued prototypes. As the deadline approached, the development team found itself in an around-the-clock frenzy of fine-tuning. The specs finally fell into place, and in December, 1997, Toyota's first Prius rolled out of its Takaoka factory in Toyota City near Nagoya. For the next two years, Toyota confined Prius sales to Japan. Yaegashi says the engineers weren't comfortable with people driving the vehicles in hotter climates or at higher altitudes. Early Prius models even sported an indicator on the instrument panel shaped like a turtle that lit up if the hybrid's engine showed signs of conking out. Yaegashi banished the turtle gauge in 1999, but recently there have been reports of stall-outs in a few dozen cars. The National Highway Traffic Safety Administration is investigating.
Toyota is also looking into the problem -- even as it lays plans for more hybrids, including a Camry to be produced at its Georgetown (Ky.) plant. "In principle there's no reason why hybrids can't be offered on all models," says Yaegashi. And this time he's not worried that no one will buy them.
By Chester Dawson in Toyota City