SAN FRANCISCO – The competition in the hybrid-electric-vehicle segment kicks up a notch with this year’s arrival of the Toyota Camry Hybrid and, in early 2007, a hybrid version of the successful Nissan Altima sedan.

The two ’07 models promise a spirited battle as new-car intenders, worried about volatile gasoline prices, weigh their vehicle options.

From a technology standpoint, the Camry and Altima HEVs will be closely aligned. The Altima Hybrid, in fact, will employ Toyota Motor Corp.’s well-regarded Hybrid Synergy Drive, which is used across Toyota’s hybrid lineup.

The Altima’s base 2.5L QR25DE 4-cyl. engine will provide most of the HEV’s propulsion, producing 158 hp at 5,200-6,000 rpm and 162 lb.-ft. (219 Nm) of torque at 2,800-4,800 rpm.

The engine will be mated to a permanent magnet AC synchronous motor that produces 40 hp, as well as a nickel-metal hydride battery. Combined, the Altima Hybrid has a net power rating of 198 hp.

The Camry Hybrid pairs an Atkinson-cycle 2.4L 4-cyl. with an electric motor for a combined 187 hp. Both vehicles use continuously variable transmissions to drive the front wheels and have regenerative braking.

Sean Blankenship, Nissan North America Inc. senior manager-model line marketing, says the Altima Hybrid will use the Hybrid Synergy Drive technology from the current-generation Prius.

Nissan has said it plans to sell an HEV developed in-house in 2010, rather than derived from Toyota technology. The two auto makers signed a technology-sharing deal in 2002.

Journalists were not allowed to drive the Altima Hybrid here at a recent Nissan unveiling of the conventional gas-powered Altima and Sentra sedans, which have been redesigned for ’07.

Nissan marketers specify the Camry Hybrid as the primary competitor for the Nissan HEV. Nissan has not yet announced pricing for the Altima Hybrid, but officials say it will be positioned competitively with the Camry Hybrid, which starts at $25,900, more expensive than the venerable Prius (base price $22,175).

Both the Camry and Altima Hybrids will come from U.S. plants: Georgetown, KY, (although early Camry Hybrids first came from Japan) and Smyrna, TN, respectively.

Nissan clearly is the underdog in this battle, as the Altima Hybrid represents the Japanese auto maker’s first production HEV. Toyota helped pioneer the market a decade ago and has several HEVs across its Toyota and Lexus brands.

Nissan says it has a slight edge in fuel economy. The auto maker expects the Altima Hybrid to achieve 41/36 mpg city/highway (5.7-6.5 L/100 km), compared with 40/38 mpg (5.5-6.4 L/100 km) for the Camry Hybrid.

And although Toyota sells its HEVs in all 50 states, Nissan will sell its Altima Hybrid only in California and seven other states that have adopted California’s strict emissions regulations: Connecticut, Maine, Vermont, Massachusetts, New Jersey, New York and Rhode Island.

Nissan says the Altima Hybrid will be rated as an Advanced Technology-Partial Zero Emissions Vehicle.

Blankenship says Nissan will consider selling the Altima Hybrid in other states if sales are brisk.

With a 20-gallon (76 L) fuel tank, Nissan says the Altima Hybrid has a driving range of up to 700 miles (1,126 km) between fill-ups.

tmurphy@wardsauto.com