Hyundai is working on a new hybrid-only model to directly compete against the Toyota Prius. “We are studying a dedicated Prius-fighter vehicle, meaning a hybrid-specific nameplate that isn’t based off a Sonata or a Santa Fe,” Miles Johnson, Hyundai product public relations manager, told “It’s its own thing.”

While Johnson did not confirm a specific production date, he placed the new hybrid-only model ahead of the Hyundai Blue Will plug-in hybrid concept. “We’ve also been studying plug-in hybrid technology, which is a bit farther out for us. But the near-term would be a Prius-sized vehicle,” Johnson said. “You can look at the dimensions of the Blue Will concept and see it would be a similar package and size to a Prius.”

Automotive News last year reported that the four-door Blue Will will launch in the United States in late 2012, according to Yang Woong-Chul, president of Hyundai-Kia Motors’ R&D division. Although the date for the Blue Will plug-in hybrid could easily slip into 2013 or later, the implication is that a new Hyundai hybrid-only model could go into production in the next two years.

Moving Target for Green Top Spot

“A hybrid vehicle usually takes double the time of a standard production car, and a plug-in even more than that,” Johnson said. “Think about how long GM has been spending on the Chevy Volt. It doesn’t happen overnight, but we’ve got some good partners with LG Chem on the batteries.” Johnson downplayed the reality of the Blue Will plug-in hybrid as “just a concept car,” but pointed to a Hyundai “Prius-fighter” as more immediate and real. “We have a lot of engineers working quietly behind the scenes. We’re really moving as fast as we can.” Both projects are being developed at Hyundai’s Namyang design center in South Korea.

Honda made its own attempt at knocking the Toyota Prius off the top spot on the green mantle when it introduced the 2010 Honda Insight last year. But the company was not successful. The 2010 Insight is almost a carbon copy of the Prius—but is smaller, uses a less robust hybrid system, and is less fuel efficient and not significantly less expensive.

Hyundai will take a different approach. We can look at the shape and design of the Blue Will—which employs Hyundai’s “fluidic sculpture” concept—for cues on the shape of a new Hyundai hybrid-only model. Johnson said the Blue Will was like “fluidic sculpture on steroids.” So, tone down all the flourishes and gadgetry to predict the design direction of a new ground-up Hyundai hybrid.

Toyota sells more Priuses than all other hybrids combined. It will be difficult for any other carmaker to pass the Prius strictly in terms of sales, but by the time Hyundai introduces its Prius-fighter, the Toyota Prius might no longer be the green car to beat. The Chevy Volt plug-in hybrid and all-electric Nissan Leaf, which respectively use little or no gasoline, will be in full production next year. In addition, Toyota will be competing against itself for top green honors when it introduces the plug-in version of the Prius in 2012. The key question, of course, is price. It’s too early to tell how low Hyundai is willing to price a new hybrid-specific model—but it will have to keep the price tag at $20,000 or lower if it wants to undercut the red-hot competition for green affordability.

The Highway Hybrid

In terms of technology, a new Prius-like Hyundai likely will follow the direction of the Hyundai Sonata Hybrid, due for release in late 2010. That model uses Hyundai’s proprietary full hybrid system with lithium polymer batteries. Great pains were taken to reduce weight and improve aerodynamics in the Sonata Hybrid. An original platform should allow Hyundai to go even further. Moreover, Hyundai is emphasizing efficiency in highway driving instead of city driving.

Some hybrid drivers have been disappointed when real-world mileage does not meet the MPG numbers on the window sticker. Hyundai executives expect to earn customer loyalty by configuring and calibrating its hybrid system to emphasize faster driving, mostly on the highway. “We’re trying to delight our customers so when they see what’s on an EPA label on a Hyundai vehicle, that number is actually achievable,” said Johnson.

According to the Environmental Protection Agency’s most recent fuel economy report, Hyundai is the most fuel-efficient automaker in America. Last year, Hyundai’s leadership promised to achieve the government-mandated 2016 fuel efficient standard of 35.5 miles per gallon by 2015 or earlier. “As a company, about five years ago, the chairman came out and said we need to have laser-like focus on quality. We’ve done that,” Johnson said. “Now, you’re seeing a new focus on design and the environment.”