Fourth-gen Prius: A new billboard for Toyota

For all the ink devoted to Tesla, it's the Toyota Prius that has reigned for two decades as the face and brand name of fuel-efficient transportation. It has also helped crystallize Toyota's image as a champion of the environment.

Now, as Toyota prepares to launch the fourth-generation U.S. model in an era of cheap oil and abundant hybrids, it's looking to the Prius to help round out that image.

Yes, it's still a gasoline-electric hybrid, and even more efficient and roomy than its predecessor, but the redesigned Prius unveiled last week on the glittering Las Vegas Strip also rides on Toyota's newest global car platform, which offers better handling, and features a more refined interior. It also pushes boundaries in styling, shifting from the simply odd profile of the older Priuses to an edgier look that -- for better or worse -- is bound to turn heads.

In short, the 2016 model, which goes on sale at the beginning of next year, is everything Toyota is now yearning to be known for.

"I think we've got the whole package now," Bill Fay, general manager of Toyota Division, said at the Las Vegas reveal. "We're just not going to appeal to one or two purchase considerations. I think we're really going to appeal to a much broader part of the market -- which I think will be important with fuel more affordable now."

Toyota took time to get the package right. It initially targeted a spring 2015 production launch, but pushed it off by about six months as engineers worked out kinks in the new vehicle architecture and its next-generation hybrid system. An underwhelming design also had to be tweaked in a late-stage review after Toyota's top r&d boss gave it the thumbs down.

The extra scrutiny underscores what the Prius has meant to Toyota and the industry. While it wasn't the first gasoline-electric hybrid in the U.S., it was the first to gain mainstream acceptance, and it helped prove that a market exists for practical alternative-powertrain vehicles.

Since the car was introduced in 1997 in Japan, more than 3.5 million have been sold globally, including more than a few to image-conscious Hollywood celebrities. (It was California's top-selling new car in 2012 and 2013.) It has some of the highest name recognition in the green-car world, and some of the most loyal buyers in the industry, according to Edmunds.com.

"Every Prius is a billboard for the Toyota brand," says Dave Sullivan, an analyst at AutoPacific. "It gives people a much more favorable image of Toyota, while at the same time they're pumping out Sequoias and Tundras."

Even so, competing hybrids and other green-technology vehicles from brands such as Tesla, Ford, Hyundai, Honda and Chevrolet have made the Prius less distinct, while low gasoline prices have cut deeply into one of its principal selling points.

With the redesign, Toyota is striving to craft a fresh identity for the Prius, and itself.

The new platform gives the retooled Prius a lower center of gravity for better handling, a feature Toyota executives in the U.S. and in Japan have been aggressively touting. A new double wishbone suspension in the rear will also improve agility.

Driving dynamics haven't traditionally been part of the sales pitch for a volume hybrid, but for Toyota, they are now.

"When does Tesla seem to get coverage? When they announce 'Insane' and 'Ludicrous Mode,'" said Sullivan, referring to the high-performance settings available on Tesla's newer electric cars. "That proves that ride and handling are something that still matters for buyers. For current Prius owners, it should feel like a very substantial upgrade."

Though the general hatchback shape of the earlier generation carries over, the 2016 Prius wears much more pronounced sheet metal on the front and rear, reflecting a heavy push by Toyota President Akio Toyoda for more expressive design across the company's portfolio.

It measures 2.4 inches longer, 0.6 inch wider, and 0.8 inch lower than the previous Prius. The changes mean more occupant and cargo room, Toyota said.

Toyota plans a slightly less expensive version of the new Prius, the Eco model, which is expected to use the third generation's powertrain. New versions of the C, V and plug-in Prius variants are expected, Fay said.

Toyota revealed no specifics on what makes the 2016 Prius tick; look for those ahead of the Tokyo Motor Show in October. But the automaker confirmed the new model will expand on its key strength -- efficiency -- thanks to a lighter hybrid system, denser batteries and a thriftier gasoline engine.

The 2016 model will get 10 percent better fuel economy than its predecessor, making it the most fuel-efficient car on the road that doesn't have a plug, according to Toyota. The 2015 model was rated at 51 mpg city/48 highway/50 combined.

When the redesigned Prius goes on sale, it will face a host of challenges -- key among them is the fact that U.S. consumers are leaning heavily against cars and alternative powertrains. Low gasoline prices have propelled the growth of crossovers and pickups and sent sales of alternative-power vehicles spiraling down 16 percent this year. Efficiency-minded consumers also have a far wider range of options among conventional gasoline and diesel vehicles.

"The Prius is not launching at an ideal time," said Eric Lyman, vice president of industry insights at TrueCar. "Gas prices are low and should remain low for the remainder of the year. Prius sales and gas prices have been directly related."

This year through August, U.S. volume for the Prius has dropped 17 percent to 125,830 vehicles, and incentives for the Prius family are up to about $2,600 per vehicle, according to TrueCar.com.

Part of this is due to the outgoing model's age, and a wider pool of competitors such as the Honda Accord Hybrid and Ford C-Max. This new generation of Prius will also have to stave off future challenges from unnamed dedicated hybrid models from Hyundai and Honda, plus a hybrid variant of Chevy's redesigned Malibu, Volt plug-in hybrid and upcoming Bolt EV.

Fay was unfazed.

"We're in it for the long haul," Fay said. "We've sold it with cheap gas, we've sold it with more expensive gas and I think that will probably continue over time."

Hans Greimel contributed to this report.