The new Honda CR-Z is a hybrid, Jim, but perhaps not quite as we know it.

We’re now into the third decade of hybrid vehicles, yet only now are car makers dabbling with versions that excite enthusiasts as much as environmentalists.

And, perhaps unsurprisingly, it’s the two pioneers of petrol-electric cars, Honda and Toyota, who are the brains behind the hybrids offering extra brawn.

Toyota’s luxury arm Lexus introduced the CT200h that aimed to give ‘green’ cars a tinge of red.

Now it’s Honda’s turn with the Honda CR-Z. And for those who remember the company’s CR-X hatch of the ’80s, the inspiration for the CR-Z’s exterior design is obvious.

With visual links, too, to Honda’s Insight hybrid, the CR-Z is a striking design, with its contemporary mix of sharp creases, steeply raked windscreen, angled lines that are both acute and obtuse, and of course that tapering roofline that runs into a bluff, short-overhanged rear end that looks like it’s had a chunk of metal sliced neatly off with a carving knife.

The result is a far sportier-looking car than the model with which the CR-Z shares its platform – the Honda Jazz city car.

At 4080mm, it’s even more compact than the Jazz, with a shorter wheelbase but employing a similar suspension arrangement of struts up front and a torsion-beam at the rear.

There are wider tracks, though, to give the CR-Z a more planted presence on the road.

The Lexus CT200h didn’t hit the mark when it came to offering a drivetrain that would be embraced by keen drivers, so can the Honda CR-Z step up?

On paper, it’s not promising. The petrol engine is just a single-overhead-cam 1.5-litre four-cylinder borrowed from the Jazz, and even with the integrated electric motor total power is 9kW short of the 100kW mark. The 91kW peak power is produced at 6000rpm.

The range-topping CR-Z Luxury model we’re testing comes standard with a CVT (continuously variable transmission) and costs from $40,790. Opt for the CR-Z Sport that comes with a six-speed manual (but optional CVT; $37,290) and the starting price is $34,990.

There’s slightly less torque with the auto – 167Nm versus 174Nm – though with the electric motor helping to deliver that from 1000-1500rpm, it’s easy to understand why the CR-Z feels so sprightly off the mark (providing you’re in the Sport mode of three options).

You can forget hot-hatch-style acceleration, but the CR-Z feels brisker than its official performance numbers suggest.

The CVT certainly isn’t the ideal choice of gearbox for a sporty car, not least with its uninspiring, droning soundtrack, but you can still have a degree of fun in the CR-Z luxury.

Again, it’s just important to keep the CR-Z in its Sport mode, where the steering is at its best and throttle response at its sharpest.

The steering is faithful to the driver’s inputs even if turn-in is not especially quick.

There’s a flat poise to the handling, and the CR-Z feels quite light on its feet thanks to a kerb weight of just 1190kg. There’s also good grip from the tyres, and neither the chassis nor steering are perturbed by mid-corner bumps.

The brakes retard speed with no problem, though as is typical of hybrids the pedal lacks feel and can be oversensitive.

A firm suspension set-up confirms the Honda’s sporty aspirations, yet, apart from some rear suspension thump over lateral road joins, ride comfort is quite acceptable – and much more compliant than the Insight’s.

The driving position is also worth highlighting, because it’s terrifically low and sporty.

It’s just a pity vision is so poor, especially the rear view which is badly obscured by the split-window design. In poor weather or at night, you can often only see the headlight beam/reflection on the road rather than the actual car behind.

At least the side mirrors are well sized and vision over the right shoulder is helped by the elongated door window.

You’ll notice when you select Sport mode that the Tron-like multi-coloured instrument panel in front of you will turn from blue to red (or from green to red if you were in Econ mode rather than Normal, the other two settings).

Choose the Econ mode and the arc of light around the digital speedo settles on green, but push harder on the accelerator pedal and the hue gradually changes, eventually into a blue, and then an admonishing red if you don’t back off (see images above).

As with the Honda Insight, the CR-Z also encourages you to grow ‘trees’ in a dashboard display.

Keep the instrument to a green rather than red hue and you’re likely to get close to the CR-Z’s particularly frugal official fuel consumption of 4.7L/100km.

Honda hasn’t been frugal with the CR-Z’s standard gear. The Luxury model comes with a fixed glass sunroof, satellite navigation, leather (heated) seats, Bluetooth audio streaming, DVD player and reverse-view camera.

That all comes at a cost, of course, with that starting cost of $40,790, placing the Honda CR-Z Luxury in dangerous hot-hatch territory – in with the likes of the brilliant Volkswagen Golf GTI and RenaultSport Megane reside.

The CR-Z can’t match them for performance or practicality.

Although based on the Tardis-like Jazz, there are no packaging miracles inside the CR-Z. Quite the opposite.

Honda calls the CR-Z a 2+2 coupe, but think of the “+2” more in terms of two bags rather than two people. Not only is there negligible legroom but headroom is so severely restricted that normal-sized adults are in danger of looking like Quasimodo after a long journey.

The boot is small and shallow (with a space-saver spare beneath the floor) but there’s a better attempt at practicality with the single-piece rear seatback that folds completely flat to provide more meaningly storage space.

It’s also fair to expect higher grades of plastics and materials for a car costing in excess of $40,000.

Hard, scratchy surfaces are all too common throughout the cabin and no better than those found in the sub-$30,000 Insight with which the CR-Z also shares some interior design similarities.

Limited practicality is compounded by a lack of lidded storage in areas such as the centre console, while the door pockets are also awkward to access.

So the CR-Z is a car that asks plenty of compromises from its owners.

However, it’s also a car that doesn’t ask drivers to compromise driving enjoyment for the sake of being kinder to the planet. And for that, at least, it should be applauded.