“We’re not thinking of a Jazz (Fit) hybrid right now,” said Takeo Fukui in December 2006. “To us, the Jazz has sufficient fuel efficiency with the current gasoline engine. Instead of coming up with a hybrid version of the Jazz, we’re coming up with a hybrid-dedicated model for 2009. The car size would be about in the same category, but a completely different model.”

Honda has been tight-lipped about the vehicle, but details about design, cost, and batteries are starting to emerge. Spy photos and unofficial renderings of the new Honda hybrid are also coming to light. The company seems to have changed design course since unveiling the Honda CR-Z concept hybrid. The CR-Z had aimed to bring broad appeal to a compact hybrid by making it sleek and sporty. In the new images, the car looks more like a Prius Junior.

Cost is perhaps the main factor. With production volume targeted at 200,000 units globally, Honda intends on cutting the cost of the hybrid system—making it more affordable compared to current hybrids on the market. Company statements have identified the price premium of the new hybrid subcompact, relative to a comparable conventional vehicle, between $1,750 and $2,000. The new hybrid will be built in Japan.

The promise of subcompact hybrids gives encouragement to environmentalists who have criticized high-performance and hybrid SUVs as a misuse of hybrid technology. They say that advances in automotive technology (including hybrid technology) over the past decades have been misplaced on larger and faster vehicles not well suited to increasingly crowded roadways—all with a big environmental cost.

The conventional Honda Fit is priced starting between $13,000 and $14,000. If Honda is able to deliver a hybrid $2,000 above that cost, its price will beat out the Civic Hybrid by approximately $5,000 and a Prius by $7,000 or more.

Hybrids for Small Cars, Diesels for Large

Honda is apparently reserving its hybrid technology specifically for small sedans. This approach separates Honda from Toyota, which plans to introduce its hybrid system on small and relative large models—and General Motors, which utilizes a mild hybrid system for smaller vehicles and a full “two-mode” hybrid for SUVs and trucks.

“At this moment, we say hybrid for small cars and diesel for large cars, but we have several other alternatives we are looking into,” said Tetsuo Iwamura, head of Honda’s sales and marketing unit. Honda plans a push into diesel technology, led by a new, 50-state legal, clean burning powertrain. But Honda has not revealed which models will feature the new diesel engine. Honda also acknowledges its interest in flex-fuel vehicles that could be powered by ethanol or natural gas, and will begin a leasing program in 2008 for 1,000 units of its FCX Clarity hydrogen-powered sedan. But mass production efforts are apparently focused on producing a highly efficient, very affordable subcompact hybrid.

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In an interview with Automotive News on Mar. 19, 2008, Honda President Takeo Fukui confirmed these plans:

• The car will have a global nameplate, like the Accord and Civic
• The engine will be based on the Civic’s, but will use a newly designed motor and engine control unit, making it lighter and more compact
• The hybrid car will be priced below the current Civic Hybrid (making it the least expensive hybrid on the U.S. market)
• The new hybrid will take its design cues from the sleek, wedge-shaped FCX Clarity fuel cell vehicle
• The new hybrid will use nickel metal hydride batteries, the current standard for production hybrids, rather than next-generation lithium ion batteries

Fukui questioned the suitability of lithium ion batteries for mass-produced vehicles. He said, “Lithium ion batteries are still not usable from our perspective.” Other automakers, most notably General Motors, Nissan, and Mitsubishi, are basing their high-profile plans for plug-in hybrids and electric vehicles on improvements in lithium ion batteries. The technology has not yet been proven as a safe, reliable and affordable in automotive applications.

Referring to lithium ion batteries, Fukui said, “”There’s a word in Japanese, soukon, for people who decide to get married too soon.”

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