Here's a CNN (AP) Article on how the Prius got started.

I think the Prius is a great step in automotive innovation. It has managed to make being green stylish, and it has affected the US auto buyer and industry forever.

That having been said, the vehicle is exactly what you would expect of a first generation gamble. There are several areas of robustness/CYA where elements were added on, instead of augmented or replaced.

The description of an unimaginative design spec, no guidance, and little support explain why there are 2 engines under the hood. As a gen-1 system, this is adequate to prove that hybrid cars can be on the road.

But it doesn't sound like the next version is going to be functionally different. The use of carbon fiber is good. Going to Lithium-ion is a straight forward step. Essentially pouring money at the problem, not fundamentally changing the design.

I'm still waiting for the fuel based generator charging a battery, and having 4 motors (one for each wheel). Rather than having a drivetrain sytem with driveshafts and transmission. We know how to do this, but still feel uncomfortable with fly-by-wire control. It's coming, but not in all vehicles yet.

Why do I believe that 2nd gen will be a generator hooked to a battery hooked to a motor? Well, other folks tell me so. But why do I believe them? It keeps the infrastructure in place (still uses gas), it is more fuel efficient. It can provide the torque, power and speed desired by the consumer. It is a more elegant design than the current system, and has less stuff to go wrong.

It is also one step away from an all electric car. (remove gas tank and generator, and put in plug).

Even for an electric car, having a generator and gastank are an emergency back-up system.

Battery technology is the bottleneck right now, but I do believe there are solutions out there.