Registrations of new hybrid vehicles in the United States continued to rise last year but the rate of increase is slowing.

Data from industry analysts RL Polk & Co. showed that sales were up 28% to 254,545 units in 2006 but the increase was the second-lowest year-over- year boost since 2000.

California continued to lead the nation in hybrid vehicle registrations with the cities of Los Angeles, San Francisco and San Diego alone accounting for 22.3% of all hybrid registrations.

"Consumers know that hybrids are important to the environment, but they are not the only option," said Lonnie Miller, director of industry analysis at RL Polk. "Automakers still have obstacles to overcome to prove the merit of owning a hybrid, including educating customers about developing hybrid technology; debunking the myth that hybrids are only needed when gas prices rise and general apathy or risk averse attitudes toward the relatively new-to-market technology.

"The challenge is for automakers to stay the course and to continue exploring fuel-efficient viable options for next-generation vehicles."

Overall, hybrids accounted for just over 1.5% of all new vehicle registrations in the US last year. For the third year in a row, the Toyota Prius led the segment with 42.8% of new registrations.

"The Prius continues to set the pace for this category. However, with several models debuting over the next two years, and many in the works for the near future, Toyota market share will be challenged. We will see if it can maintain its foothold at the top," said Miller.

Following the Toyota Prius, the Toyota Highlander was the second most- registered hybrid model, taking 12.5% of the category, followed by the Honda Civic, with 12.3% of all new hybrid registrations. Combined, Toyota and Lexus had more than 75% of all new hybrid registrations in 2006.