Nickel-Metal Hydride

Hybrid cars operate on a combination of gasoline and electricity. In the same way that gasoline can be stored, depleted and refilled, so too can the electricity in the battery with regenerative braking.

Not all batteries are created equal.

Hybrid cars use Nickel-Metal Hydride batteries (also known as Ni-MH), which are completely different from Lead-acid batteries, the kind used in conventional vehicles. While Ni-MH and Lead-acid batteries are both rechargeable, the Nickel-Metal Hydride is a much more dense battery; more energy is available for a given amount of space. Density is an important consideration, as weight is a serious obstacle to efficiency.

Hybrid cars also have a much larger reliance on battery power than do conventional vehicles. Conventional vehicles use electricity primarily for use with the starter motor, but hybrids need it for much more. With the exception of mild hybrids (which some do not consider hybrids at all), HEVs by definition rely on electricity as a form of propulsion. The incredible capacity of a Nickel-Metal Hydride battery is best suited for the needs of a hybrid car.

Nickel-Metal Hydride batteries are used in laptops and cellphones, and have largely replaced Nickel-Cadmium (Ni-Cd) batteries. Ni-Cd batteries suffer from a problem known as the 'memory effect' where a battery cell that is commonly discharged to 50% capacity becomes incapably of holding more than a 50% charge. Ni-MH batteries do not suffer from this problem.

Many people are concerned about the cost of replacing the rechargeable batteries. There are a few things to keep in mind:

The Toyota Prius's battery has an 8 year / 100,000 mile warranty
Ni-MH technology is still in the growth phase of its product life cycle. Prices will come down over time.
Toyota has tested the Prius battery to 180,000 miles in simulated tests without deterioration
Ni-MH batteries are recycled.

Some interesting battery data from Toyota:

...the second-generation model battery is 15% smaller, 25% lighter, and has 35% more specific power than the first. This is true of price as well. Between the 2003 and 2004 models, service battery costs came down 36% and we expect them to continue to drop so that by the time replacements may be needed it won't be a much of an issue