California Dealer Refuses to Sell Its $1M-Worth of Parked Prius Models, Sues Toyota

Despite a recall being issued, Toyota is placed in the hot seat due to hybrid concerns.

Toyota

One California-based Toyota dealership has been stockpiling its Prius inventory for the past few years, refusing to sell the cars because of a "safety concern." Now, there are an estimated $1 million-worth of Prius models parked on Roger Hogan's dealership roof and he's filed a lawsuit because he believes that the Japanese manufacturer is refusing to fix an inherent problem with the vehicles.

Toyota recognized an issue with its Prius model years 2010 to 2014 and issued a recall for 800,000 units in 2014. On some vehicles, despite the cars being little tanks, the hybrid's power inverter could overheat and cause power loss. This sparked a nationwide recall of the popular model to implement a software fix, which cost the automaker an estimated $80 per car rather than replacing the $3,000 inverter. In 2015, Toyota revised the design of the inverter. Hogan believes that the issue still exists. He told CBS News that he believes the problem still isn't fixed. Hogan reports that even since the recall, he sees a steady stream of Prius cars come into his dealerships that still exhibit symptoms of a problem that the recall should have taken care of.

More than 100 defective Prius models have made their way through the dealership after the recall, all which have reportedly received the fix. It was enough for the sunny Southern California dealer to stop peddling one of his top-selling hybrid sedans (something which he has never done in 40-plus years of selling cars), and instead, stockpile the cars on one of the dealership roofs to avoid pawning vehicles off to customers who he believes will potentially have their lives put in danger.

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The Drive

"A recall is supposed to prevent the incident from happening. It's not supposed to be you fix it after you've experienced the horrific event you're supposed to prevent that event from ever occurring," Hogan said in a statement to CBS, "Why should you be allowed to put someone's life in danger?"

Before filing the lawsuit, Hogan was contacted by one of Toyota's vice presidents, stating that the software fix "lessens the likelihood of a failure." The note must have not been enough, because, in December, Hogan reached out to federal regulators to petition for an investigation into the inverter problem. The NHTSA told local news that it is monitoring any complaints it receives and will "take action as appropriate."

Since then, the dealer has struck up a lawsuit with Toyota for $100 million, citing claims of breach of contract and fraud due to the manufacturer's failure to fix the problem, despite the recall. Toyota, however, believes that this lawsuit is frivilous and it has already addressed the problems with the affected cars in the voluntary recall.

“We believe Mr. Hogan’s allegations are without merit, and we intend to defend vigorously against his claims," a spokesperson for Toyota told The Drive, "The Prius inverter recall was implemented to enhance vehicle safety, and we remain committed to the safety and security of our customers. As a part of this commitment, Toyota continues to review and monitor available information on this issue. Toyota welcomes feedback from its dealers on vehicle performance and safety; however, we believe Mr. Hogan’s lawsuit is motivated primarily by a separate dispute he has with Toyota over management and succession issues involving his dealership, not the effectiveness of the Prius inverter recall.”