With Friday’s announcement of a $32,000 price tag for the plug-in version of the 2012 Toyota Prius, the market acceptance of plug-in vehicles will be tested like never before. After a federal tax credit of $2,500, the car dips down below $30,000.

It’s not that the Prius Plug-in Hybrid sells for so much less than competitors like the Chevy Volt—or that it's less expensive at all than the Nissan LEAF (after its $7,500 tax credit). It’s that it stacks up right against the top-of-line existing Prius—the established version without plug-in capability—which this year goes for $28,790. In other words, consumers wanting stellar fuel economy will soon be able to choose between a 50-MPG Prius with all the available bells and whistles—or the one that by plugging will earn an estimated MPG-equivalent of 87 miles to the gallon. What would you choose? (The cheapest no-plug Prius starts around $22k.)

The Toyota Prius Plug-in Hybrid’s 4.4 kilowatt-hour battery pack will provide up to 15 all-electric miles after a full charge. That’s a jump of 15 percent from the pre-production model. Unlike the other two plug-in hybrids already on the market—the Chevy Volt and Fisker Karma—the Prius-with-plug openly blends the use of gasoline with all-electric propulsion. Yes, if driven with a light foot, the Prius Plug-in Hybrid can stay in all-electric mode—assuming there’s still juice in the battery—up to 62 miles-per-hour. But the car will fire up its gas engine at any sign of real acceleration.

The primary benefit of plug-in hybrids is that it can travel purely on electricity for many miles—but that it eliminates any worries about EV range or the need for electric vehicle infrastructure. When the battery drains, the car becomes a conventional hybrid with range comparable or better than gas cars—and with the ability to pump in petrol when you need more.

That convenience is real and important—as is the ability for the Plug-in Prius to fully charge with a standard 110-volt outlet in 3.5 to 4 hours. (Toyota also announced a price of $999, including installation, for the official Prius 240-volt charger, supplied by Leviton, but you have to wonder who would bother to spend the money to cut charge times down to 1.5 hours.)

The Joys of Incrementalism
There’s more to celebrate. Toyota deserves kudos for offering plug-in capability without any compromise of the passenger and cargo space of the standard Prius liftback—making it the most versatile of plug-ins so far to reach the market. This car is much roomier than a LEAF or Volt. The Ford Focus Electric gives up nearly half its trunk to make room for batteries. At the same time, the efficiency of the Prius-with-plug after the battery is drained is an estimated 49 mpg—just one mpg less than the regular Prius and blowing away the Chevy Volt’s so-called “charge-sustaining” mileage of 37 mpg.

All of this bodes well for sales of the Toyota Prius Plug-in Hybrid—especially considering the strong loyalty found among the more than 1 million Prius owners in the U.S.—who have taken a first step toward electric mobility and want a bit more.

In the end, the plug-in market will be made up of vehicles with a range of electrification—including small battery plug-in hybrids, those with a range of 40 miles or more, limited range small EVs designed for urban use, expensive large electric vehicles with a range of 200 miles or more, and everything in-between. The arrival of the Prius Plug-in Hybrid at a competitive price—even if sold in low numbers for the first year or two—means more choice for drivers wanting to kick the oil habit. The emerging plug-in market is in desperate need of more choices, and the Prius Plug-in will be a compelling one for many consumers.

Toyota will also sell an “Advanced” Plug-in Hybrid with bonus features such as heads-up display, a nice audio system, and LED headlamps. That one goes for $39,525, minus the tax credit. Bob Carter, group vice president and general manager of Toyota Motor Sales, U.S.A., told me on Friday—in Richmond, Calif. where the pricing was announced—that Toyota expects 70 percent of the expected 15,000 Prius Plug-in Hybrid sold in the first year to be the lower priced version.

Ordering starts in October for sales that will occur in 14 states in 2012. Those states—all of which follow California’s stricter emissions standards—are Oregon, Washington, Arizona, Maine, Massachusetts, Vermont, New Hampshire, Rhode Island, Connecticut, New York, New Jersey, Maryland, Virginia, and of course California. A national rollout is planned for 2013.

By Brad Berman