With Toyota throwing cold water on the near-term viability of lithium ion battery technology for the Prius, it looks like another brand will be the first to use the new batteries. Mercedes-Benz announced back in September at the Frankfurt Motors Show that they would be using lithium batteries in their mild hybrid vehicles beginning in 2009. Given the added costs of lithium ion batteries and Toyota's efforts to drive down the costs of the Prius, when Toyota finally does add them they will likely appear in a Lexus model first. Toyota is still skeptical of lithium technology and says no company is capable of building a 150,000-mile battery right now. Bill Reinert of Toyota also acknowledged that they have had thermal issues and fires in some test vehicles. After the batteries are established in another vehicle they will migrate to the Prius and other platforms.
[Source: Automotive News - Sub. req'd]