Can the Toyota IQ hybrid challenge the Prius in terms of sales? Even if cheaper and more fuel efficient, wouldn't an IQ still be too small? What takes hybrid cars to the next level?

Just too small for America?

The perfect city car?

Some time next year Toyota will offer a new hybrid car that could be priced under $18,000. Sure, it will be smaller than the Toyota Prius, possibly significantly smaller. However, unlike it’s relatively small price tag, Toyota’s new hybrid could offer huge fuel economy numbers.

But, can such a compact hybrid challenge Prius sales?

Early reports suggest that the new hybrid could achieve up to 94 mpg. Unfortunately, that’s based upon Japanese fuel economy numbers that simply don’t translate into easy EPA numbers. So fuel economy numbers for the US will probably be much lower.

Likewise, Toyota hasn’t provided final details on the size of the new hybrid. Will it be IQ or Yaris sized? Regardless, the new hybrid will be smaller than the Prius.

Of course, it could also be priced more than $4000 less than the Prius, while achieving much better fuel economy.

Thus far, the cost-effectiveness of hybrid cars is still a major issue for most car buyers. While the Prius is by far the most successfully selling hybrid, most car consumers still believe the Prius is not worth the extra hybrid costs.

Can cheaper hybrid cars, even if smaller, change that perception?