Posted by: David Welch on March 18, 2009
In this corner, the challenger, weighing 2,700 pounds, the Honda Insight. Honda is taking aim at Toyota’s hybrid crown with its new Insight, a five-passenger gasoline-electric hybrid that will get more than 40 miles per gallon. That’s a shout less than the 50 mpg Toyota’s new Prius can get. But Honda’s boast is that the Insight will be far cheaper. You can get the joy of hybrid technology for under $20,000.
Well barely under $20,000. The Insight starts at $19,800 and tops out at $23,100. By comparison, the Prius starts around $23,000 and the touring model can sell for more than $25,000. It’s hard to say what the hybrid premium is for an Insight. There’s no gasoline-only version. It costs about $4,000 more than a Honda Fit, but it’s a little bigger than a Fit.
Honda will find buyers even with gasoline selling for less than $2 a gallon. But good luck unseating the Prius. Jim Hall, principal of 2953 Analytics, makes a great point. Toyota’s hybrid system drives only in the refined silence of electric drive when you first hit the accelerator. The gasoline engine kicks in later. There are times when a Prius driver is green as can be. Honda’s hybrid system is almost always burning gas. It can’t launch off the line in electric mode and it’s tough to drive it without burning gasoline. So the techies and green buyers will think the Prius is a better hybrid. In that sense, Hall says, Toyota has defined what a true hybrid is.
The other problem is that the Insight actually looks like a Prius. To get the aerodynamics needed to boost fuel economy, Honda created the same silhouette. So basically, it’s a budget Prius. Honda will have to sell it on price. That, too, has a booby trap. If Toyota wants to take aim at Honda, they could slap a $1,000 or $2,000 rebate on the Prius and the difference in the monthly payment would be negligible to all but the most thrifty buyers. Plenty of Hondaphiles will go for the Insight. But Prius owners will piously stick with Toyota.