Every morning when I start my prius for the first time, it will display 6 bars like normal. But after driving a quarter mile, it will drop to 2 or 3 bars, then recoup back to 5 or 6 bars within a mile or two. After the battery recharges, it will NOT do this throughout the day. It does this everyday only the first time I drive it. Is this completely normal or sign of a bad traction battery?
This sounds normal. Immediately after a cold start, the gasoline engine doesn't provide much power and the traction battery therefore provides a greater proportion of the power needed to move the vehicle. Some owners have obtained better results by letting the car warm up for a few minutes, especially if uphill travel is needed initially.
I used to get the same issue. Now I just let it warm up for about 40 to 50 seconds before I drive off and there's no problem.