So then, will no one step up and attempt to compete with the Prius???

Honda's Prius-Fighter Is Stuck in First - BusinessWeek
So far this year, the Prius is outselling the Insight by nearly 6 to 1. Other carmakers are watching closely. General Motors, for one, is reviewing its entire hybrid strategy. In late November, GM shelved plans for a 53-mpg Prius fighter for its bread-and-butter Chevrolet brand.
With the Insight failing to compete with the Prius, will no others be able to challenge the Toyota dominance in the hybrid world?  Toyota sells 3 out of every 4 hybrids in the US.  1 of ever 2 hybrids sold is a Prius.  1 out of every 100 (or a bit more, really) cars sold in the US is a Prius.

That's a lot to overcome, but it should still be possible.  If the rest of the auto market is competitive across the various types of cars, why can't hybrids be more competitive?

The cost is a big challenge, of course.  A decade of sales gives Toyota a big advantage in technology advancements and engineering cheaper solutions.

Also GM and others may decide it just isn't worth it.  Nissan has decided to work on building all electric, while Audi has focused on diesel.  GM is hoping to beat Toyota to the plug-in market with the Volt.  Ford and Honda seem to be the only real competitors in the hybrid  world, but they're so far back that Goliath seems to be winning without even noticing he's in a fight.

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