Happy milestone for Prius – buy now or wait for Gen 3

The little hybrid that could has sold No. 1 million, more than half of them here in North America.

The Prius sells more U.S. vehicles than the non-hybrid Ford Fusion. Sales are up 21 percent so far this year, and rose 70 percent last year. Plus, Camry hybrids are up 36 percent this year.

But the sheer demand means you might not be able to get one soon. Surplus inventory has hit a two-year low, letting Toyota cut incentives to just $123 a car. Toyota also plans on raising the base price by $400.

Meanwhile, the third generation of Prius is on its way, coming in 2009.

And, all you can say is, once again, Toyota will have done it again.

The gas engine is supposed to get boosted to 1.8 liters from 1.5, yet fuel economy is supposed to be improved; Toyota says it will boost the efficiency of the battery system. It will also, supposedly, get about 3-4 inches longer and 1 inch wider, but without appreciable weight gain.

On the performance side, that would boost the gas engine from 75 to 100hp. A better electric motor could make the total max hp about 160, as opposed to the current 110.

Economy? Could go over 50mpg, at least in city driving, compared to the current 48/45 city/highway.

And, that ain’t all.

Listening to hybrid gearheads, Toyota will launch a plug-in version in 2010.

It will also, theoretically, use a lithium-ion battery, and raises the stakes against Chevy’s proposed Volt, which has no cachet or history behind it. But, that’s what GM gets, and deserves, for its lame-o history on hybrids. Toyota doesn’t want to launch, though, until it works all the kinks (of which many still exist) out of lithium batteries. Of course, that’s assuming the long-awaited, long-rumored Volt doesn’t continue to have no more existence than as GM greenwash.

Personally, I would like to see a tri-mode car, which has BOTH plug-in and full regenerative braking capacity, and takes advantage of that by boosting the battery pack and electric motor sizes. I would not pay, certainly not a big premium, for a plug-in as the sole source of electric power.

Finally, as the third-gen Prius nears market, Toyota is moving in the direction of establishing this as a separate brand, along with Toyota itself, Lexus and Scion.

This is a hugely smart move in my book. It gets back to Toyota’s hybrid cred on the marketing and sales side, and lets Toyota get a tighter focus on the engineering, design and development side.

Between that and Toyota selling half of its Priuses in North America, it seems obvious that it’s going to start building them here. And, given the paragraph above, I think it’s a no-brainer that Toyota looks at building a separate Prius plant.

And that idea of Prius as an entire brand? What if that included a Prius sports car? Something like this hot new hybrid of a hybrid, looking like a futuristic Prius-Lamborghini sort of offspring described here.

And yes, it’s for real, including a 4-sec 0-60 speed and a 155mph top-out.

Drivetrain is a 3.3L V6 plus two electric motors. Rooftop is a solar panel to power climate control system and such. It’s rated at an estimated 33mpg combined city and highway economy.

Additional pictures of this boxy bad boy at the story link.