Sales of gas-electric cars jumped nearly 20 percent in May, compared to last month, outpacing the overall vehicle market that increased by 12.3 percent. Sales of the 2010 Toyota Prius, which continues to make up half of all hybrid purchases, increased by 13.5 percent to 14,248 units—despite a relatively poor showing by the entire Toyota brand. Industry observers believe that Toyota has yet to overcome negative publicity from safety recalls earlier this years, yet car shoppers are apparently excusing the Toyota Prius from those quality concerns.

2010 Toyota Prius.

Sales of the Ford Fusion Hybrid accelerated by a whopping 64 percent to 2,486 units. Ford also added nearly 25 percent more sales of the Ford Escape Hybrid. At this point, Ford has decisively leapfrogged Honda to become the number two seller of hybrid cars. Toyota owns 68 percent of the hybrid market; Ford holds 14 percent; and Honda has dropped to nearly 9 percent of hybrid car sales. The upcoming Honda CR-Z hybrid might help the company regain the second place spot—and Honda executives are promising a clean-slate approach for future hybrids.

Sales of the Altima hybrid, which is only available in eight states, soared by 253 percent. It’s unclear if publicity about the company’s all-electric Nissan Leaf helped raise the green perception of the entire Nissan brand.

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Toyota MR2 Sports Hybrid Concept

While many car companies focused on horsepower and size during the past decade, Toyota staked its reputation on dependability and eco-friendly hybrids. Toyota’s leadership is now calling for more excitement (a.k.a. speedy performance) to go with its green image.

Automotive News reported today that Toyota President Akio Toyoda is ordering engineers and designers to spice up the brand’s bland image. “I wanted a car that shows what we are aiming for, something affordable, fun to drive and good for the environment,” Toyoda said. He points to the MR2 hybrid sports concept as the kind of product he expects from a new focus on fun.

When Toyota unveiled the MR2 Sports Hybrid Concept at the Tokyo Auto Salon in January, observers gave it a zero percent chance of being produced. The 400-horsepower MR2 hybrid is based on the MR2 platform that was nixed from the U.S. market in 2005.

The MR2 Sports Hybrid Concept combines a 3.3-liter V6, used to drive the rear wheels through a continuously variable transmission, and an electric motor for the front wheels. The concept has an estimated zero-to-60 time under 4.5 seconds.

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For more than year, we’ve heard rumors and hints about a family of Priuses. But we haven’t had any details about what a Toyota Prius SUV, minivan or compact car would look like—until now. Motor Trend is reporting that a slightly stretched Prius—badged as Alpha—is in the works.

Calling the model a minivan is a slight exaggeration. The Prius Alpha is just one foot longer than the current Prius. It’s hard to imagine, but that extra foot apparently will allow for a third row of seats.

According to the report, the Prius Alpha is expected to launch in March 2011, presumably only in Japan (where hybrids are hot sellers.)

The new model would feature lithium ion batteries, marking the first Toyota production hybrid to use the lighter weight more powerful battery technology. The Prius Alpha seven-seater would use the Prius’s 1.8-litre engine and current-generation hybrid system. The maximum combined power output will be 135 horsepower—but given the extra size and weight, the new model’s fuel economy will likely fall below 50 MPG.

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