It was confirmed by the Japanese giant automaker Toyota that it is currently developing a smaller, more affordable hybrid for its lineup, a spin-off of the Yaris and will come with a price tag that will rival that of the Honda Insight. With a basic price of only $19,800 (excluding destination), the Insight has become a high selling hybrid in Japan.
Although it does not come with as much amenities as the Prius, its price tag undercuts the former by about $2,200.
Now, with the next generation Prius expected to be price tagged higher and with Honda intending to launch a hybrid variant of its Fit subcompact, it is clear that the hybrid war has reached a new level.
Toyota's strategy in this on-going hybrid battle is to expand its hybrid-vehicle lineup to smaller hybrids such as those in the level of the Vitz and Yaris.
Also, Toyota will bring in more core technologies in-house as part of its strategy. At present, the electric motor and inverter that powers the Prius are produced by the Japanese giant.
However, Toyota is also currently developing its own lithium ion batteries so it will not continue to rely on Panasonic for them. This coming May the 2010 Toyota Prius will go on sale.
To compete with the Insight, Toyota will continue to sell stripped down current model Prius in Japan. The next generation Prius will sell for 2 million Yen ($20,510) and might be available as early as two years from now.