In a cost-cutting race between Honda and Toyota, the cost premium for hybrid vehicles is expected to be reduced substantially in the next three years.
The Financial Times reported that Toyota said that its new target would trim the cost premium for hybrids to about $1,900 in the next three years. The new hybrid technology, which will be used in the next-generation Prius, will be about half the size and weight of the current system.
In July, Honda said it expected to cut the cost premium of its hybrid system to about $1,700 per vehicle by 2009.
Source: Finacial Times via Inside Line.