I heard an interview with a car salesman who talked about people coming into showrooms asking about hybrids, but leaving with a conventional vehicle when they learn about the price difference. This seems to be the conventional wisdom: consumers want to feel good about what they buy as long as it doesn't cost much extra.
I'm not disagreeing with this in general, I think it's true to some degree. But I believe it's an oversimplification and a cop out for producers. We bought 2 new cars in the last year. (I know, not very green of us.) Sure enough, both times we went in looking at hybrids.
The first time we went shopping, we were looking for a vehicle that could hold us, 1-2 kids and some number of dogs comfortably. We loved our Matrix, but we had out grown it and were about to drive across the country. We looked at the Prius, but it didn't offer much over the matrix in ability to get car seats in. We also looked at the Highlander hybrid, but it's much bigger than we needed. We settled on the mazda5. It's a cool little car. Not much bigger than the Matrix (a foot longer and an inch narrower), it has 3 rows of seats and sliding rear doors. Exactly the car we needed and nobody else makes anything close to it. Forget about finding anything that size in a hybrid.
Once we got here and settled, it became clear that we needed a commuter car. The mazda gets much better mileage than any minivan (because it's much smaller), but not what I wanted to commute in. The Prius was higher on the list this time, but still, a much bigger car than we wanted. We went to a Honda dealer to look at the civic hybrid, but this is also a large vehicle these days. We left with a Fit. This is a great little car and still gets high 30s for highway mileage. Again, show me a small hybrid hatchback and I'd have bought it.
The problem is not that people won't spend a premium to get a hybrid. The problem is that people won't spend a premium to get a car they don't like. The Prius points to this. People who really care about fuel economy tend to think it's a cool design and it flew out of the dealerships.
A lot of our peers (young folks starting families) care about the environment but also don't care for traditional concepts of what a car should do. I consider a sedan a waste of space. With a smaller foot print, a hatchback can hold more stuff. Look at the newer car models of the last decade that aren't SUVs. When we bought our toyota echo 8 years ago, the small hatchbacks for sale were: the Golf, the Focus, and maybe the PT cruiser was out already. Now VW added the Rabbit, the Echo has been replaced by the Yaris which has a 3-door model, the scion comes in 2 flavors, the Aveo, the Aero (Suzuki), Kia has one, the Fit, the versa, the Matrix, and the crossover vehicle is huge now. The only hatchback hybrid is the Prius and it's aimed at the full size market.
Make a small hybrid hatchback and it will sell. Hell, Toyota has a Mazda5 size minivan in Japan. Put synergy in there and ship them to the US. They'll sell.