Toyota Plans Affordable Hybrid to Compete with Insight

Insight and Prius

The new Honda Insight (above) is about $2,000 less than the Toyota Prius. Toyota may be planning a new hybrid model that is considerably cheaper than the current Toyota Prius (below).

“Hybrid affordability” is the catch phrase for the week.

Just days after Honda announced a base price of $19,800 for its new Insight hybrid, making it the least expensive hybrid to be sold in the US—more than $2,000 cheaper than the current Prius—Japan’s Nikkei business daily reports that Toyota plans to counter with a cheaper new hybrid model of its own. Toyota refused to comment on the report.

According to Nikkei, Toyota plans to develop a down-level model to the Prius with a US sticker price of around $20,500, in order to directly compete with the Insight. It could hit the market as early as 2011.

The third-generation 2010 Toyota Prius is due out this spring, but pricing has not yet been released. Analysts expect that it will have a base price very comparable to the outgoing model. Toyota’s relatively modest price point for the Prius, combined with the number one ranking for fuel efficiency, has been the one of the keys to the vehicle’s global success.

Even though the Insight will have the Prius beat on price, the Prius is a larger vehicle with better fuel economy. It has an EPA rating of 51 city/48 highway versus the Insight’s 40 city/43 highway. The Prius is considered a midsize sedan, while the Insight is a compact. The prospective future more affordable model from Toyota will be smaller than the current Prius, and will use a smaller engine, according to Nikkei. Although it is too early to know, this downsizing could allow Toyota to surpass all current hybrid models in terms of fuel economy.

In Japan, the Insight ranked 10th in sales volume for the month of February, while the Prius came in at 12th. The demand for the Insight in Japan was so much higher than originally expected, that Honda is ramping up production beyond the initial 200,000 units the company intended to produce.

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  • Jeeves

    Honda dealers will likely “gouge” as well:

    And the current Prius model is the second generation model. The next model will be “Prius III.”

  • Opal

    I will buy the honda insight when it comes out cause:
    1. its the cheapest hybrid on the market 19,800
    2. 40+mpg on the highway and city
    3. its environmentally friendly
    4. Honda’s are reliable cars and that’s a fact
    5. i am a college student and can not spare any more “change!”
    6. Its hard to save up money in this economic times and put it down for a car. I work two jobs “both security” 7days a week and goto school in chicago!

    So for people like me “which is a high number of americans that cant spare the extra change” the sales goal for the honda insight wont be enough for demand and thats a fact! We will see how it plays out once it hits the US market!

  • marco

    I will chose always the new Prius as it is:
    -lower consuptions
    -lower emissions
    -higher confort
    -more safe componets in case of accident
    -more advanced

    If 2000 usd makes any difference when buying a car which is 2 steps above, please buy a second-hand Prius which will be cheaper than a new insight.

  • uktiger

    I think the insight is going to be a winner. With a new lower-cost prius we are all winners.

    Now, all i want is a $3,000 modern automobile that gets 200mpg. If i can really dream I want a flying car. Come on manufacturers lets see some huge innovations not this incremental stuff.

    Somebody hurry up and adopt the Reinhardt Turbine cogeneration piston-turbine!

  • RKRB

    This development should be good for hybrid buyers, the environment, and lower oil use.
    The economics are interesting. Using the EPA highway figures (perhaps as good a figure as any, since mileage varies so much between drivers and conditions), if the Prius gets 48 mpg it will use 250 gallons in a year’s drive of 12,000 miles. If the Insight gets 43, it will use about 280 gallons in 12,000 miles, for a difference of $60 at $2/gallon.
    Now, if the Prius II’s base price is $1000 more than the Insight, and if we add in Toyota’s customary dealership price gouging (“dealer markup”) of $2000 or so, this means it will take about 50 years for the Prius II to break even with the Insight (or more accurately, 600,000 miles).

  • mdensch

    I’m enjoying the heck out of watching Honda make Toyota squirm.

  • 9691

    Au Revoir Detroit

  • Samie

    Oh snap…
    60 mpgs maybe for mini Prius? Who knows I think this is good developing new markets. I’m a bit concerned about one company trying to control most of the market share but hopefully that will end soon??? Hope Ford jumps into the Economy Hybrid mix with a Hybrid Focus.

    As for policy I wonder if we are getting to the point where the premium for hybrid technology is comparable to the jump in price of a vehicle that goes from a V6-V8 engine? Interesting if we look at this issue in the luxury vehicle sector in terms of possible future policy regulations. Maybe someone could do a story on this topic….. I have wondered why comments go from oldest to newest. Spice it up, would be nice to reverse this, post going from newest to oldest, prob easy to do and keeps conversation going on stories that are more then a day or two old.

    All car dealerships play games with Hybrids! (Maybe not in Cali or NY) Snaky and sneaking yes, at least in my experience. Look for the guy with normal hair and no sideburns or stay away from creepy looking mustaches and maybe you will not have to pay a dumb markup or not pay some stupid fee to order a hybrid, that is if you go to get a Insight, keep your fingers crossed…….

  • TXAG

    If someone would come out with a vehicle that is as useful as the Prius I’d be willing to take a look. It seats 5 with a full sized cello in the back (requirement #1 when I bought it), very tight turning radius, and can haul 8′ fence posts without sticking them out the window.

    I have almost 52000 miles on my ’05 it and it hasn’t let me down. Now, if Toyota would build a 6 passenger Prius I could get rid of my Grand Marquies.

  • SoloSoldier

    you have a Grand Marquis…eeewww

  • Lost Prius to wife

    RKRB, you are right, when comparing high mileage hybrids and trying to figure the “cross over point”, that it can be more difficult to justify spending more money on the more expensive car sometimes. But sometimes the needs exceed the smaller car’s ability to meet them. Would one buy an Insight or a Prius if they needed to haul, once a week, a half ton of rock? I know I would not. And I seriously doubt that anyone else would. For that I would have several choices of non-hybrid and hybrid trucks. “Why not choose the hybrid?” becomes the real question.

    My personal feelings on this are we should all celebrate the fact that people are buying hybrids over “standard” cars and that there is even a choice in hybrids. Whether someone buys a Prius or an Insight is immaterial to me. Their needs are not my needs. I am older and have friends that cannot easily squeeze into the back seats of some of the compacts cars out there. My six foot two best friend and his wife (and my six foot three son and his wife) can easily get into our Prius back seats and still have room to move. I do not feel I have needs that require a Lexus hybrid. But some of the features, especially dealing with safety and convenience, will be found on the new Prius. And I may choose to buy those options should my budget allow it. Should I be faulted for not buying an Insight instead of a Prius or a Volt if the Insight does not meet my needs?

    Back in 1986, I made a decision to buy a new car only if it had better gas mileage that the previous car that I owned. I have never regretted that decision. And it has always saved me money. And I turned down the chance to own some very popular cars because they did not meet that required need of mine.

    If someone buys a hybrid truck that gets 25 mpg versus 20 mpg in a regular truck, they are now using 20% less gas. That is the same as someone choosing a 51 mpg car over a 41 mpg car. And it is the same as someone choosing a 63 mpg car over a 50 mpg car. What the car is that does that is immaterial as long as it meets ones needs and is within their budgets.

  • chrsto4

    Now if Ford could get off their soap box long enough to build a realistic gas-electric competitor to the Prius or Insight, I think we’d be getting somewhere. For now conservation is key, not some pie-in-the-sky, smoke & mirrors, energy-intensive production of a wishful Hydrogen pipe dream. Good for Honda on the updated Insight but I’m still going to wait until Toyota gets the Prius just right. 🙂


    I’m very interested in the Insight and want to test drive one. I don’t need a “big” car but want one that not only is good on gas mileage but also good for the environment at an affordable cost! I have a 97 Civic that still runs well, so trusting Honda is not problem with me.

    As for Christopher’s statement about Ford. They have a Hybrid that is supposed to compete wtih the Hybrid Camry. Its the Ford Fusion and I might take a look at that one as well. The car reviewer for the Washington Post was very impressed with it!

    Of course all of this is contingent on my finding work! :<)

  • Curt Reinholz

    Honda has gave us an ETA of 3/26 for the Insigth to drop. We are not marking up the car or adding any additional costly options. We are gong to dedicate one car solely for test driving making sure that we always have one here. Please stop out to Wilde Honda in Waukesha, WI. Or check out my web page
    From the Milwaukee area…check out great site.
    Curt Reinholz

  • pete pearce

    I tend to agree with Chris. The market needs a bit of competition and Toyota needs to keep pressing to get the Prius just right.

  • tapra1

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