A Toyota insider is countering yesterday’s report that the automaker is planning a Yaris-based hybrid to be built in France. Such a vehicle would be unnecessary, according to the unnamed source.

Today’s Toyota Yaris is already a fuel miser. The European variant is currently quipped with a 1.33-liter dual VVT-i engine with start-stop technology allowing the compact runabout to earn an impressive 55.4 mpg (European) combined fuel economy (in the States, we get a 1.5-liter Yaris that is rated at 29/36 in EPA testing). While dropping a hybrid powerplant into a larger vehicle pays back significantly, the gains realized by building a hybrid Yaris would be negligible.

Down the road, it may be a different story as battery technology (one limiting factor) is improving quickly. The advent of lithium ion batteries will boost the case for compact and subcompact hybrid vehicles as the bantam-weight cars benefit from the lighter and more compact power sources.