Toyota's flagship gas-electric hybrid sedan Prius represents the epitome of the emerging "green car" category in the mind of the buying public. Although hybrids are still only a blip on the automobile sales charts, the market-leading model has been the most effective tool in the car industry's effort to wrap itself in an eco-friendly cloak. But even with the success of this niche market, General Motors, DaimlerChrysler and BMW have mostly remained on the sidelines, unconvinced of the hybrid's practicality and marketability. (They shied away from having to swallow the added cost of the hybrid's extra electric motors, batteries and so forth--the "hybrid premium" that has thus far failed to fully appear in sticker prices.)
But that view seems to have changed. A consortium of the three firms is working on an alternative technology called a two-mode hybrid to challenge Toyota's supremacy.