Smaller Toyota Prius hybrid on the way

In our conversations about hybrids with Toyota, the company has consistently told us that the Prius might eventually spawn a whole line of Prius-branded hybrids.

As the third-generation Prius goes on sale in June, the Japanese newspaper Nikkei reports that the car's chief engineer says the next offshoot, due in 2011, will be smaller, based on the company's Yaris subcompact and with a claimed higher fuel economy than the 44-mpg overall we recorded in the second-generation Prius. This new vehicle will be better positioned to compete with the 2010 Honda Insight.

That dovetails with what Toyota has told us, that the next Prius to follow the 2010 model would be a smaller.

Toyota has also announced that it will further expand the Prius line with the addition of a plug-in model, and insiders confide that it will likely be derived from the upcoming, smaller Prius.

Following that about a year later, Toyota tells us there will be a larger, more luxurious Prius variant. We're not sure if this might closely related to the Lexus HS 250h, or possibly a new version of the Camry hybrid.

Also read: "Hybrid price war: Honda Insight vs. Toyota Prius"

—Eric Evarts

Learn about driving green in the Consumer Reports special fuel economy section.