[HPsquared]

Most ICE car engines are massively oversized for highway cruising (so they have power for acceleration) and aren't running efficiently during said cruising. Huge amounts of engineering goes into trying to reduce this effect but it's always there to some extent.

Hybrids use a smaller engine that is running in a more efficient operating range during cruising (i.e. not pulling a huge vacuum and moving lots of parts the whole time). The battery/motor comes in for acceleration.

Unlike combustion engines, electric stuff isn't really inefficient at low load.

[pfdietz]

Prius uses an Atkinson cycle engine, doesn't it? Inherently more efficient than a conventional engine, albeit at the cost of lower power. You can get that effect with variable valve timing in some power ranges, at the cost of more complexity.

[kube-system]

Pretty much all mainstream hybrids run Atkinson cycle (technically not the original Atkinson design, but an otto-cycle engine that keeps the intake valve open longer, to produce the same effect)