[1] In 2003, the Prius was completely redesigned as a compact liftback, with redistributed mechanical and interior space significantly increasing rear-seat legroom and luggage room.

The battery control computers keep the state of charge (SoC) between approximately 40% and 80% (shallow cycling), where the average SoC hovers around 60 percent, allowing about 400 Wh of useful energy storage to capture energy from regenerative braking and to release it back into the hybrid drive-train through Motor-generator 1 and Motor-generator 2 in the power split device.

[5] Among the Prius's options are Toyota's implementation of a Smart Key System (the feature can be user-deactivated), DVD navigation on the multi-function display, Vehicle Stability Control and Bluetooth for hands-free calling.

[14] Toyota's design and development efforts paid off during the 2005 European Car of the Year competition where the Prius won ahead of the Citroën C4 and the Ford Focus.

The Prius and the Nissan Leaf are the only cars using drivewheel electric motors to have won this competition, where the usual winners are mainstream hatchbacks and sedans/saloons from major European manufacturers.

[15] In July 2007, Toyota received both Japanese and American governmental approval to begin testing plug-in hybrid models using a modified NiMH battery on public roads.

[18][19] In late 2005 (for the 2006 model year), Toyota introduced some minor cosmetic changes for the XW20, such as a slightly updated front-end, revised instruments, and repositioned rear seats.

[20] Other changes comprised a higher-resolution liquid crystal display, as well as new optional features such as a backup camera, advanced air bags and an upgraded audio system with an auxiliary input.

The Touring Edition also comes with a firmer, European-style, tuned suspension, standard high-intensity-discharge (HID) headlights, and integrated (non-HID) fog lights.

In 2005, Toyota had to fix a software glitch that caused the Prius' engine to enter "limp" mode with electric-only operation, following 68 stall complaints in the U.S. out of 160,000 worldwide sales.

[21][22] In June 2006, Toyota also recalled about 170,000 Prius models from 2004 to 2006 due to a faulty intermediate shaft and sliding yoke in the power steering system.

In the U.S., the Environmental Protection Agency (EPA) test results must be posted on new vehicle windows, and are the only fuel consumption figures that can be advertised.

[30] In the United States the EPA measures a vehicle's air-borne pollution based on hydrocarbons, nitrogen oxides, carbon monoxide, particulate matter and formaldehyde before assigning them a score.