Prius hybrid aims to challenge diesels; Incentives could help Toyota's sales of its gas/electric car.(News)

Byline: Wim Oude Weernink

Toyota's second-generation Prius hybrid model may be a difficult sell, despite improvements to its innovative powertrain.

The Prius, which goes on sale in Europe early next year, will be the most fuel-efficient gasoline-engine car on the market, with CO2 emissions of only 104 grams per kilometer. Its predecessor's emissions were 121 grams per kilometer.

The European auto industry has made a voluntary commitment to reduce fleet CO2 emissions from the current 165 g/km to 140 g/km by 2008.

The car, powered by a mix of gasoline and electricity, is ...