The Toyota Prius was the world's first mass produced hybrid car, and

it still might be the most famous of all time.

But in recent years it has become a victim of a changing market and

perhaps its own success.

The nameplate was once synonymous with hybrids and a symbol of the

automotive future.

The Prius catapulted Toyota to the lead of the hybrid market and

showcased the innovative prowess of a manufacturer are often reputed

to be conservative, even a bit boring.

But now sales of the Prius are falling after Prius took off,

rivals took notice and competition has grown.

Gas prices have also fallen and engines have become more efficient,

making hybrids a tougher sell for many customers.

And with fully electric vehicles from makers such as Tesla now

capturing the attention of buyers and automakers.

The trailblazing Toyota Prius is no longer the cutting edge of eco

conscious driving.

Hybrids are not going away anytime soon.

But the question for Toyota is does the Prius brand still have a

bright future and what does that look like?

It is important to understand how much of a breakthrough the Prius was

when it first came out.

It was a totally new technology that boasted unthinkably high gas

mileage and it became more popular as consumers increasingly worried

about the price of fuel and about the environmental impacts of

gasoline emissions in the U.S..

Honda beat Toyota to market by a few months with the insight, which

also happened to beat the Prius in fuel economy.

That vehicle was a small two seat car with only a manual transmission

and air conditioning was optional.

Even in the U.S.,

the Prius was the first hybrid could truly compete with ordinary

gasoline engine cars.

Its EPA fuel efficiency rating at that time was forty eight miles per

gallon, far better than just about anything else on the market.

The second generation Prius was particularly popular and introduced

the futuristic styling that became a signature of the line.

Perhaps knowing that many of its customers would be early adopters and

well-heeled buyers looking for a highly fuel efficient choice, Toyota

also made the smart decision to pack the Prius with technology and

other features that were relatively rare at the time.

From the very beginning, the car was something of a phenomenon in the

automotive market.

It was an affordable, accessible vehicle that appealed to a wide

audience, including customers who had the money to spend on luxury

vehicles or sports cars and might not normally buy a Toyota.

So when the Prius first came out is really a very innovative product.

It was not like anything.

We've really seen a hybrid vehicle.

It was a little scary for some people, but it was really very popular

because a really long waiting lists for it really stood for really

high fuel efficiency and whatnot.

And it was it was something to be seen in.

The car was known for attracting attention from Hollywood actors such

as Leonardo DiCaprio and Cameron Diaz.

It was also a fixture in popular culture, featured prominently on

television shows such as Comedy Central's South Park and HBO

show Curb Your Enthusiasm.

A character on the Showtime TV show Weeds,a drug dealer, bragged that

the car's quiet, electrified powertrain made it good for sneaking up

on people.

It was almost a brand of its own.

Not exactly a Toyota, just a Prius.

But the Prius is time at the top was bound to end.

SALES peaked in 2012 and fell from there.

And it isn't that hybrid sales have been falling.

In 2000, the Prius had 59 percent of the hybrid market in the United

States. Its share peaked the next year at 77 percent.

But by the end of 2018, the Prius family's share had shrunk to 19

percent of the total.

During that time, the total hybrid and plug in share of the car

market grew from zero point one percent in 2000 to two point seven

percent in 2018.

There were a few factors that contributed to the Prius is decline.

Part of the trouble was simply competition.

For a time, Prius practically owned the hybrid category.

It was far ahead of competitors in terms of technology and the company

had a strong brand in the Prius name.

But over time, others caught up and hybrid technology lost its

novelty. Soon it became a feature customers could opt for when

picking out a vehicle.

Now many automakers, including Toyota, sell electrified versions of

sedans, sport, utilities, crossovers and even pickup trucks.

There is also less incentive among customers to buy any type of

hybrid for a few reasons.

First, internal combustion engines have improved considerably.

Automakers are squeezing more power out of smaller, more efficient

engines, often by using features such as start stop technology,

forced induction and others.

Gas has also become a lot cheaper as the Prius name has aged.

And high fuel costs were one of the major factors driving the

technology behind the car.

Fuel prices across the U.S.

hit four dollars and ten cents on July 16th, 2008, their highest

recorded average for the country in history.

But in 2018, the price at the pump fell as low as two dollars and 26

cents a gallon on average.

Gas prices plummeted in late 2014, and that era has really

stuck around 2015 through 2018.

Relative affordability.

And that's really put Americans interest in hybrids kind of back.

Certainly set them back.

Americans have actually gone to the opposite, less fuel efficient,

bigger vehicles, because in the background of all of this, cafe

standards have slowly improved.

Average new fuel efficiency of even big truck.

So we've come a long way.

Toyota also no longer seems to be positioning the vehicle as a sleek,

tech, heavy car for early adopter.

Current Prius is still comes stocked with technology, but they no

longer seem ahead of the pack in what they offer.

In some ways they even seem a bit behind.

This doesn't mean the Prius is a bad car, for example.

Consumer Reports still recommends it.

Yeah, we liked it from the beginning and we still like the Prius.

I mean, the Prius is kind of like the eat your vegetables car right

now. I mean, it's a car that really does everything very well.

It's reliable.

It's got safety features, the top safety features.

It's it's got a lot of value and it's got great fuel efficiency.

So it's a really smart car to get.

But no, it's not as sexy as some of the competitors.

It just no longer looks like the most revolutionary vehicle and fuel

efficient driving.

Perhaps that honor now goes to Tesla, which has upset the automotive

world with its boldly design pure electric sedans, an SUV that

emphasized luxury and performance.

And for people who really want to stand out and they want to have

something that's innovative and showing that it's about the future,

they're going to do things like the Tesla Model 3.

I mean, in cars, southern California, that's really the hot car.

That's the car that's really about the future, not the Prius anymore.

The Prius was exceptional among cars in that it was a more affordable

vehicle that could still lure buyers who might otherwise opt for a

luxury sedan or high end sports car.

But now many of those early adopters and well-heeled eco conscious

drivers are flocking to Tesla's, say many industry observers.

Furthermore, Tesla's success has now spurred rival automakers to play

catch up with it in the way they once did with Toyota.

Now, practically every major automaker is racing to launch pure

electric vehicles of all types and at all price points.

In fact, industry observers have said Toyota is actually a bit behind

in the development of pure electric vehicles.

Toyota is determined to keep hybrid vehicles relevant, even if it

means releasing its own intellectual property to potential

challengers.

In April of 2019, the automaker said it will allow competitors royalty

free access to its 24000 patents on a hybrid vehicle technology

through 2030.

In a bid to encourage the wider adoption of hybridization, I think in

some ways Prius has been a victim of its own success, right?

It started that revolution that has rolled out so that there are there

are many other choices now when it comes to alternative fuel

vehicles. And it's fascinating because the first three generations of

Prius, it was really an idea that people bought into and wanted to

associate with that by the fourth generation.

Hybrids were so more normalized in the market that Prius became more

just another vehicle.

In the meantime, it continues to release new versions of the Prius.

In May of 2019, the company unveiled the 2020 Prius prime, which

starts at twenty seven thousand six hundred dollars.

It comes with some of those key standard features missing in its

predecessor, such as Apple Car Play, Sirius XM and Amazon Alexa

Compatibility. While the industry seems to be moving toward

electrics. Opinions vary as to how long that transition will take and

how smooth it will be.

So hybrids are likely not going anywhere soon.

But while the Prius name may have once been synonymous with them,

could end up being just another car.