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The speculation can finally end. After weeks of hearing rumors regarding an impending low-cost hybrid from Toyota, Automotive News is reporting that the Japanese automaker is working on getting a hybrid drivetrain installed in the Yaris platform. The new car will use the same Hybrid Synergy Drive technology as the Prius but will cost considerably less when it goes on sale, which could take place as early as 2011.

This new development is a direct response to the new Honda Insight, a hybrid five-door that ostensibly competes with the Toyota Prius but costs thousands less due to its slightly smaller size, including a downsized engine and battery pack. When Toyota's Insight-fighter hits the market, we'd expect it to carry an engine that roughly matches the Insight's 1.3 liters, a full half-liter smaller than the powerplant in the 2010 Prius.

[Source: Automotive News]