The generation 2 Toyota Prius was much anticipated. Toyota made many improvements and enhancements to the car that made it worth the wait. From a size point of view, it grew about six inches longer than the vehicle it replaced, which put it more in line with the American market place. The second-generation Prius offered more interior space, as well additional body style variants, adding a hatchback to the sedan family. Even more aerodynamic and wedge-shaped than before, the Prius became easy to spot on the road. The steering and air conditioning were converted to all electric, which translated into smaller batteries, and all that extra room was converted to passenger and cargo space.
Although larger and slightly heavier than the first generation, the second-generation Prius saw its performance improve, thanks to an upgraded, more powerful Hybrid Synergy Drive. This powertrain combination was later integrated into Lexus hybrid models. Again, the Prius ran on electric power, and the gas engine assist was available when the battery ran low. The gas assist engine was made more powerful with gen two vehicles, which was a very positive step toward better customer satisfaction. Horsepower was increased by almost 15% with the new powertrain.
Despite increased weight and powertrain performance, Toyota still managed to improve fuel economy for the second generation, to 60/55 mpg. Traction control joined the standard equipment list, while new options included Toyota's Smart Key keyless entry and start system, as well as Bluetooth, a navigation system with voice control, and Vehicle Stability Control.
The second-generation Prius proved particularly popular with automotive journalists, and received a number of awards, including the Motor Trend Car of the Year, the North American Car of the Year, the International Car of the Year, and the European Car of the Year. In addition, Car and Driver named the second-generation Prius one of its 10 Best.