Toyota (NYSE:TM) has been working on the electrification of mass produced cars through the use of hybrid power trains and the in-house development and manufacturing of batteries for at least fifteen years. Toyota adopted the nickel-metal hydride [NiMH] battery and the hybrid power train using it in the late 1990s after the NiMH battery had been in development for a decade by its original inventor, Energy Conversion Devices, Inc., and by nearly all of the Japanese battery makers, such as Panasonic (PC) and Sanyo (OTC:SANYY).
Toyota entered into a joint venture with Panasonic to manufacture and continue the development of the NiMH battery as it, Toyota, began to manufacture the Prius NiMH using hybrid and let the market beta test the power train. The Prius was so successful that Toyota bought out Panasonic's interest in the JV and took it in-house to preserve competitive advantage. GM rejected the hybrid concept and watched as Toyota swept the field to become the "green' car maker.
Toyota does not want to make the switch-over for the simple reason that NiMH battery hybrid power trains work well, are reliable, long lived, durable under extremes of weather, and can bring fuel efficiency to more than 50 miles per gallon while capable of 100 mph top speeds and ranges of 500 miles and more.
Toyota has rightly seen that the market for a golf-cart like Chevrolet Volt with a 40 mile range on a charge and costing as much as a third to a half more than a Prius is tiny and limited ultimately to those few with high discretionary incomes wanting to make a "green" statement.
Toyota estimates that the market for a plug-in hybrid with the characteristics of a Chevrolet Volt may be no more than a few thousand a year, a rate at which the car could never repay the investment made to develop and produce it.
Lithium-ion batteries are too expensive and their long term characteristics are unknown, so that Toyota foresees the high probability of a large degree of customer dissatisfaction as battery performance degrades from the original mediocre to unacceptable.
The NiMH battery, on the other hand, has proven to be durable, safe, long lived, and able to maintain acceptable performance characteristics for up to a decade.
The economics of lithium-ion batteries in plug-in hybrids are only marginally better than those of NiMH batteries in full hybrids. It would be as foolish for Toyota to give up the NiMH battery based Prius hybrid power train as it is for GM to continue to develop the Chevrolet Volt.
The test of time will soon take place. I suspect that Toyota by the end of the second decade of the twenty-first century will be a very large profitable maker of a range of passenger carrying vehicles with a variety of power trains and that GM will no longer be in business in 2020.