Rear seat area scorched on my Prius, any theories on what caused it?

I had a 2010 Prius that did somethig along these lines, though nowhere near as bad. The battery cooling intake on mine sits inside the cabin right by the rear seat, and over about a decade it had pulled in a genuinely impressive amount of dog hair and dust. When I finally popped the little vent cover off, the mat of fuzz behind it was packed tight enough that I doubt air had moved through it in years. The fan motor runs off the hybrid system, and when the airflow is choked like that the battery pack runs hot, which is exactly the kind of thing that scorches nearby trim and fabric.

My bet is the intake vent, not wiring. Wiring faults in these cars tend to show up as warning lights and trouble codes long before anything melts, while a clogged cooling path just quietly cooks things. Pull that vent cover and look behind it. If you find a felt mat of hair back there, that is your answer and the insurance guy shrugging makes more sense too, since it reads as maintenace neglect rather than a defect.

Either way I whould not put kids back in it til a hybrid shop actually inspects the pack. Mine was fine after cleaning, but heat cycling like that shortens battery cell life, and a tired pack in a car that age can throw codes and go into limp mode with people in the back.

I'd push back a little on the lint theory. Fuzz packed in a vent will smolder and stink, sure, but I've never seen it melt through a seat cushion. I watched a buddy's Camry Hybrid do something similar in his garage, and the culprit turned out to be one weak cell in the pack that started venting heat on its own. The discoloration on his seat back lined up almost exactly with where the pack sits behind it, and there was that same sharp chemical smell in the morning.

On yours I'd pull the rear seat bottom and the access panel to the pack first. Look for swelling on any of the modules, green or white crust on the bus bars, or a heat shadow on the carpet above where the fan exhausts. The pack cooling fan on these pulls air from inside the cabin, so check the filter area too, but don't stop there.

The other thing worth doing is a code scan even if no warning light came on. A failing cell often throws a P0A80 or similar well before anything dramatic happens. If the pack checks out clean, then I'd start looking at the wiring harness under the seat and the neighbor theory, but a ten year old high mileage pack is the first place my money goes.

Did a pack rebuild on an '08 a couple years back, 214k on it, and the giveaway in that car was scorch marks on the plastic module carriers right where two cells had gone high resistance. Pulled 28 modules and two of them were visibly swollen compared to the rest. Point being, if the damage pattern on your cushion lines up with where the pack sits behind the seat back, I'd lean toward the pack itself, not lint or outside heat. Worth checking wether it throws any codes at all, even without a warning light on the dash. A cheap mini VCI cable and Techstream on a laptop will read the battery ECU history, and if a module ran hot overnight it ussually leaves a trace. That record is also handy ammo if you end up fighting the insurance adjuster on it.

One thing I'd check before pointing at the pack is whether the outside of the car shows anything. If a neighbor's exhaust was hot enough to scorch the cushion through the body panel, you'd almost certainly see discoloration or soot on the quarter panel and around the rear wheel arch, and the undercarriage would smell like cooked road grime. I chased a similar mystery smell on my own car once and the exterior evidence settled it in about two minutes. Also worth sniffing up close, because a venting cell has a sharp chemical stink that's nothing like burnt fabric, and that difference tells the adjuster something too.