The cost of entry to Hybrid-land (next to Fuelcellandia) just got a whole lot cheaper. Beginning March 24, the 2010 Honda Insight will be on sale, with the entry-level LX model selling for $19,800. That makes it the lowest-priced hybrid on U.S. roads.

Don’t get confused, because Honda’s first hybrid (a two-seater) was also called the Insight. This new one, with a four-cylinder engine and nickel-metal-hydride hybrid battery system generating 98 horsepower, is much more Prius-like (even the shape). And it’s clearly aimed at that Toyota’s runaway success. Although the Prius is in something of a sales slump now (along with everything else), more than 600,000 have been sold in the U.S. since 2000. Half of all the hybrids sold in 2008 were Priuses.

The entry-level Insight gets 40 mpg city/43 highway. And it's priced more than $2,000 below the cheapest 2009 Prius, whose prices range from $22,000 for the base car to $27,765 for the Touring model. But the Prius was dramatically redesigned and upgraded (it’s bigger, but with 50 mpg city/49 highway now) for 2010. The first cars will be on sale in a few months, and Toyota has projected sales of 100,000 in the remainder of 2009, followed by 180,000 in 2010.

“We don’t expect anything on prices until closer to its on-sale date, which is still a vague ‘late spring,’” says Toyota spokesman Wade Hoyt.  

Speculation is that Prius prices will rise slightly simply because the new car has so many great features. But Toyota may make some strategic decisions when it sees just how low the Insight is going. Putting downward pressure on pricing is the fact that U.S. hybrid sales fell 30 percent in the first two months of 2009, to 31,466. (Overall, auto sales are down 39 percent, so hybrids are doing better than the rest of the industry.)

I haven’t driven the Insight yet, but I did sit in one at the Detroit Auto Show. The base LX model is fairly austere — no cruise control, for example — because, as Honda’s Dave Terrebessy points out, “Our whole goal with the Insight was to … keep the price of our base model as low as possible.”

Upgrade to the EX ($21,300, or $23,100 if you want navigation) and they lard on the features, including cruise, heated door mirrors (with turn signals built in), alloy wheels and a six-speaker stereo with a really cool USB interface. Plug in your iPod, and you not only get recharged but can control song selection from the head unit. Most buyers are going to go for the EX, which makes the LX something of a loss leader.

Honda’s Chris Naughton said from behind the wheel of a pre-production Insight that he’s been able to obtain 50 mpg “and it wasn’t hard at all, even without extreme hypermiling techniques.”

I'll drive an Insight soon, but in the meantime, here's Motor Trend's drive in this 2010 eco-car:

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