• by Karl Greenberg , June 8, 2007

Toyota, which is seeking to offer hybrid versions of all of its vehicles by 2012, is marking the one millionth hybrid-vehicle sale worldwide - 541,210 of them in the U.S. - between 2000 and last April.

The company's U.S. sales arm at Torrance, Calif., expects to sell a quarter million of the vehicles in the U.S. alone this year. The company also says, in a statement, that it doesn't see sales being hampered by the phase-out of the federal tax credit offered to buyers of hybrid vehicles. Toyota buyers, like buyers of other automakers' hybrids, had enjoyed a $400 to $3,400 tax credit on the vehicles, which substantially reduced the price premium of a hybrid versus traditional car.

But in May 2006, Toyota Motor Sales reached the 60,000-unit limit for the credits, which the IRS had created to spur hybrid sales. In October, after a three-month grace period, the credit on Toyota and Lexus hybrids was cut by 50%. In March, the credit was cut by another 25% on Toyota and Lexus hybrids. By September, the credit will be phased out completely.

Toyota's bellwether hybrid car is Prius. Sales of the top-selling hybrid, accounting for 43% of hybrid sales in the U.S., dipped in October as gasoline prices dropped along with the tax credit. Prius finished the year at 107,000 units, slightly lower than 2005, although sales were up 7% in December. This year, Toyota for the first time began offering incentives packages on the car.

The spokesperson says Toyota launched various national incentive programs for Prius this year, starting with financing and leasing incentives in February and the "Eco-nomics Bonus Savings" during Earth Month, with discounts ranging from $600 to $2,000.

Honda, which has announced it will discontinue sales of its hybrid Accord because of disappointing sales, sold 31,000 hybrid Civics last year. Toyota's own hybrid, Camry, has about a third the volume of Prius. Toyota's four (soon to be five) other hybrids sell in far less volume than Prius. A company spokesperson says Toyota has sold 7,095 of its RX400h so far this year, and 22,540 hybrid Camrys. So far this year, Toyota has sold 76,747 Priuses. Toyota's calendar-year-to-date hybrid sales in the U.S., totaled 119,154 units, an increase of 75% over the same period last year.

Toyota, which claims it accounts for 66% of all hybrids sold in America since the inception of hybrid sales since 1999, will next introduce a super-premium Lexus vehicle, LS 600h, on sale this summer. The company launched the hybrid Camry and Lexus GS 450h hybrid cars last year and a hybrid version of the Highlander SUV, as well as the Lexus RX 400h hybrid SUV in 2005.