The Prius has been an undeniable sales success for Toyota, so much so that the Japanese automaker is finding it difficult to keep up with demand. Sales of the popular hybrid are actually down 4 percent this year — despite demand being stronger than ever – due to a shortage of the Prius’ battery pack. However, Toyota will look to remedy that problem as it will soon move some battery production for its hybrid vehicles to North America.

Currently, Toyota sources all batteries for its hybrid vehicles from Japan. Not only does this put a tremendous strain on production capacity, but it is also eating into Toyota’s profits – largely due to the poor exchange rate. To combat this, Toyota is planning to move at least some of its battery production to North America.

“It is very difficult to make the main parts of batteries outside Japan, but we have to have battery production in North America,” Toyota Vice Chairman Kazuo Okamoto told Automotive News.

It remains unclear exactly when Toyota will add a North American production facility or partner, but it will likely be right around the time the next Prius starts U.S. production in 2010. Once the new Prius and North American-sourced batteries come online, Toyota expects the Prius to generate profits similar to the Corolla, according to Automotive News.

Toyota is also planning to launch a plug-in version of the Prius hybrid by 2009 or 2010 – which requires a bigger battery pack to provide 8 miles of electric driving – making its North American battery production all that much more important for the coming years.

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